Monday, December 9, 2013

Dec 9 Market Update and a Note on New Condos

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.


December 2013December
 2012 
Wk 1Wk 2Wk 3Wk 4
Unconditional Sales94



283
New Listings148


405
Active Listings3829


3896
Sales to New Listings
64%


70%
Sales Projection---



Months of Inventory
12.3

No point in doing a sales projection when sales drop off so quickly in the later weeks of December.  Should be between 300 and 330 according to last year's performance.

A quick note on construction.   Here are the condo starts and completions over the last 23 years.

Some periods of note:

  1. The condo boom in the early 90s, when we were building some 75 units a month.  That was when the term leaky condo still made you think of defective prophylactics rather than building envelopes.
  2. The aftermath when completions dropped down to 25-30/month for almost a decade.
  3. And the market recovery in the 2000s, leading to first a pickup in building, and then a period of over exuberance in 2007/08 when credit was flowing like water.
  4. The current levels is what I found interesting.  The price of condos have flatlined and are significantly down from their peaks in 2008.  You can likely ignore the small rebound this year, the MLS HPI shows a dead flat market amongst condos.  And yet despite this miserable market, condo building is going strong.  Some 70 units a month are sprouting up and there is no sign that builders are getting tired of it.  We've seen some evidence of older condos being hit pretty hard by all the new construction, and I think at the current rate of building we will continue to see declines.   
Developers are building at boom-time levels in a declining market.  Interesting strategy...

273 comments:

«Oldest   ‹Older   201 – 273 of 273
CS said...

Sheesh people! We are still doing better than some third and second world countries!

But getting more like the third world all the time, judging by house price to income ratios.

Income inequality, a key feature of the Third World, is increasing here. All other things being equal, this will drive up house price to income ratios for various reasons that it would be tedious to enumerate.

Introvert said...

"She believes that running a rental suite is not work."

Yes, it is pretty darn easy compared to any job I've had.


I agree with totoro. My work entails waking up at 6:30, arriving at work at 8, working 7.5 hours, and then driving home. Repeat every weekday.

Juxtapose that with my work as a landlord. A few months ago, I fixed a leaky faucet (3 hours) and fixed a loose cupboard door (2 minutes).

As you can see, the two types of work are very similar in terms of duration, frequency and effort required.

None said...

Well if you assume that people own house on average of 5 years - I think transaction costs are worth considering.

Rent 5 years assume you miss a roughly 10% transaction cost of a buy sell cycle is not insignificant

info said...

@ CS

"Real estate prices in Canada are the most overvalued in the world...

Bald statement without any evidence or reference to any evidence.

And people pay to read the Globe and Mail. LOL.

What about Georgia, price to income = 40, or China, price to income = 25, etc.

Or even many cities in Europe with price to income ratios well into double digits."

Where are you getting your information?

If you are getting your information from Numbeo, perhaps you should read the following information carefully.

First of all, CS, you don't understand what overvaluation is. Price to income ratio alone is not overvaluation. Overvaluation is when the price to income ratio and price to rent ratio of properties in a country are significantly above their long term average.

Numbeo doesn't provide this information.

You also do not understand that Numbeo's price to income ratio methodology is bizarre:

"Our formula assumes and uses:

◦net disposable family income, as defined as 1.5 * the average net salary

◦that the average apartment has 90 square meters

◦its price per square meter is the average price of square meter in city center and outside of city center"


On the other hand, The Economist is a legitimate source of information for overvaluation/undervaluation of housing markets worldwide.

The Economist compares current price to rent and price to income ratios to their long term averages for various countries.

Based on their latest study:

"Overvaluation is especially marked in Canada, particularly with respect to rents (78%) but also in relation to income (34%)."

Canada's housing market is the most overvalued of all the countries that The Economist tracks.

Victoria's housing market is the second most overvalued in Canada, not far behind Vancouver.

Canadian housing may be most overvalued in the world, says The Economist (Canadian Business)

Other legitimate studies that actually compare price to rent and price to income ratios to their long term averages for various countries also conclude that Canada's housing market is among the elite in the world in terms of overvaluation.

Marko said...

But getting more like the third world all the time, judging by house price to income ratios.

What is the home per sq/ft to income ratio?

CS said...

OK, Info, tell us this.

You've been wrong about an imminent market crash for six years. How many years/decades would the market have to remain plus or minus ten percent of where it is now before you admitted that there was no crash imminent?

As for where I got my data, I gave you the link as you very well know. Certainly they are quite adequate to identify differences in price/income ratio between, say, Canada at 5 point something, and China, the new super state, at 25.

Moreover, the Numbeo method of analysis, if somewhat rough and ready, seems quite sensible.

What you are not prepared to take into account is that some market fundamentals have changed. You should try working through the implications of the large increase in income disparity that has occurred over the last 20 years.

I, incidentally, have no prediction about the direction of the market. At one time I too thought it would crash. But that now seems unlikely to me, partly because it must be a matter of national policy to prevent it from crashing, as so much of our current prosperity, such as it is, depends on the continued vitality of the construction industry.

Moreover, the government has many tools it can use to prop the market, chief of which being to keep rates low while allowing the loonie to sink, which will drive up inflation and permit increased nominal wages.

However, if I wrong and prices crash so much the better for me, personally. I shall buy a mansion on the OB waterfront.

Oh, and I think your faith in the Economist is wildly misplaced. If you read it carefully, you'll find they often contradict themselves even within the same issue. It's just a rag written by recent Oxford and Cambridge grads. That's why nothing's signed. The authors are people you've never heard of.

patriotz said...


Income inequality, a key feature of the Third World, is increasing here. All other things being equal, this will drive up house price to income ratios for various reasons that it would be tedious to enumerate.


Income inequality has been increasing faster in the US than in any other industrial country, but it hasn't been very successful at holding up house prices beyond historical multiples of rents and incomes.

Perhaps you can explain why you think it would work here. I don't understand why rich people, who get that way by making smart investments, would want to buy RE and rent it out at a loss. We all know that the recent US bubble was the result of loose credit to the masses, not buying by the rich.

patriotz said...

Certainly they are quite adequate to identify differences in price/income ratio between, say, Canada at 5 point something, and China, the new super state, at 25.

And what does that 25 for China mean anyway? The majority of the population still lives in rural areas, and much of the urban population still lives in Communist-era housing. What housing and what incomes does this number come from?

You'd might as well look at the price/income for cars and compare that to Canada.

info said...

@ CS

"You've been wrong about an imminent market crash for six years."

That's interesting since my first post on this site was probably 3 years ago.


"How many years/decades would the market have to remain plus or minus ten percent of where it is now before you admitted that there was no crash imminent?"

Again, you are trying to convince others that Victoria's housing market has been flat for at least 6 years. That is completely incorrect (see my next post).

info said...

. . . . . . . . .Percentage Price Decline From Peak (MLS HPI). . . . . . . . .
. . . . . . . . . . . Greater Victoria - Single Family Homes. . . . . . . . . . . . .
. . . . . . . . . . . . . . . . .( 6 month high-low chart ). . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . .0%. . . . . . . . . . . . . . . . . . . . . .*. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 0.5%. . . . . . . . . . . . . . . . . . . . . .*. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 1.0%. . . . . . . . . . . . . . . . . . . . . .*. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 1.5%. . . . . . . . . . . . . . . . . . . . . .*. . .* . . . . . . . . . . . . . . . . . . . . . . . . .
- 2.0%. . . . . . . . .*. . . . . . . . . . . . .*. . .*. . .*. . . . . . . . . . . . . . . . . . . . . .
- 2.5%. . . . . . . . .*. . . . . . . . . . . . . . . .*. . .*. . . . . . . . . . . . . . . . . . . . . .
- 3.0%. . . . . . . . .*. . . .*. . . . . . . . . . . *. . .*. . . *. . . . . . . . . . . . . . . . . .
- 3.5%. . . . . . . . .*.. . . *. . . . . .*. . . . . *. . .*. . ..* . . . . . . . . . . . . . . . . . .
- 4.0%. . . . . . . . .*. . . .*. . . . . .*. . . . . *. . .*. . ..* . . . . . . . . . . . . . . . . . .
- 4.5%. . . . . . . . .*. . . .*. . . . . .*. . . . . *. . .*. . ..* . . . . . . . . . . . . . . . . . .
- 5.0%. . . . . . . . .*. . . .*. . . . . .*. . . . . . . . . . . . * . . *. . . . . . . . . . . . . . .
- 5.5%. . . . . . . . .*. . . .*. . . . . .*. . . . . . . . . . . . * . . *. . . . . . . . . . . . . . .
- 6.0%. . . . . . . . .*. . . .*. . . . . .*. . . . . . . . . . . . * . . *. . .*. . . . . . . . . . . .
- 6.5%. . . . . . . . .*. . . .*. . . . . .*. . . . . . . . . . . . . . . . . . .*. . . . . . . . . . . .
- 7.0%. . . . . . . . . . . . . *. . . . . *. . . . . . . . . . . . . . . . . . ..*. . . . . . . . . . . .
- 7.5%. . . . . .*. . . . . . .*. . . . . . . . . . . . . . . . . . . . . . . . . *. . . . . . . . . . . .
- 8.0%. . . . . .*. . . . . . .*. . . *. . . . . . . . . . . . . . . . . . . . . .*. . . .*. . . . . . . .
- 8.5%. . . . . .*. . . . . . .*. . . *. . . . . . . . . . . . . . . . . . . . . . . . . .*. . . . . . . .
- 9.0%. . . . . .* . . . . . . *. . . *. . . . . . . . . . . . . . . . . . . . . . . . . .*. . *. . . . .
- 9.5%. . . . . .*. . . . . . .*. . . *. . . . . . . . . . . . . . . . . . . . . . . . . . . . .*. . . . .
-10.0%. . . . . . . . . . . . .*. . . *. . . . . . . . . . . . . . . . . . . . . . . . . . . . *. . . . .
-10.5%. . .*. . . . . . . . . . . . . *. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-11.0%. . .*. . . . . . . . . . . . . *. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-11.5%. . .*. . . . . . . . . . . . . *. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-12.0%. . .*. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
------------------------------------------------------------------------------------------
. . . . . . . . . .07. . . .08. . . . .09. . . . 10. . . . .11. . . . 12. . . . .13. . . . . . .

Unknown said...

Oh how I've missed these stars and dots. Very decorative. Good effort, almost Christmas-tree-like!

info said...

@ CS

The chart I posted is a 6-month high-low chart using MLS HPI (realtor) data for Greater Victoria single family homes.

Clearly, single family home prices across Greater Victoria peaked in 2010.

The total decline from peak so far has been 10%.

Since 2010, there have been 7 consecutive (6-month) price bars with lower highs. This signals that SFH prices have been in a downtrend since 2010.

Nothing flat about that.

You may not understand what 6-month price bars are. Basically, each bar represents the high and low price points reached within its 6 month time period.

I used the MLS home price index data for SFHs and converted it to percentage below peak.

We know that some Canadian real estate boards have recently manipulated housing market data to make that data look stronger. Therefore, we can safely assume that SFH prices across Greater Victoria have declined at least 10% from peak so far.

3-month SFH median price data for Oak Bay, Saanich East and North Saanich shows a 10.5% decline from peak.

3-month SFH median price data for Sidney, Esquimalt, Colwood, Langford and Sooke shows a 14% decline from peak.

There has been nothing flat about house prices in Victoria since 2010.

info said...

@ CS

"As for where I got my data, I gave you the link as you very well know. Certainly they are quite adequate to identify differences in price/income ratio between, say, Canada at 5 point something, and China, the new super state, at 25."

You missed it again, CS.

A country's price to income ratio alone does not measure overvaluation. That ratio must be compared to the country's long-term historical average of the ratio in order to determine whether or not overvaluation is present.

Numbeo does not compare the current price to income ratio to the long-term historical average of the ratio. It simply states its (bizarre) version of price to income ratio for various countries.

The numbers that Numbeo presents are completely useless in terms of talking about RE overvaluation.

The Economist does compare price to income and price to rent ratios to their long-term averages. This is what overvaluation/undervaluation is all about.



info said...

@ CS

"Moreover, the Numbeo method of analysis, if somewhat rough and ready, seems quite sensible."

Explain.

Numbeo limits the data they use to calculate price to income ratio to apartments only, and a particular size of apartment at that.

What about houses?

It doesn't matter anyway since price to income ratio alone gives no indication of overvaluation of a housing market.

info said...

@ CS

"At one time I too thought it would crash. But that now seems unlikely to me, partly because it must be a matter of national policy to prevent it from crashing"

You are implying that governments in the US, Ireland, Spain, Japan, etc. chose to let their housing markets crash.

The Canadian government has no more control over an impending housing market crash than any of those governments did.

info said...

@ CS

"Oh, and I think your faith in the Economist is wildly misplaced. If you read it carefully, you'll find they often contradict themselves even within the same issue. It's just a rag written by recent Oxford and Cambridge grads. That's why nothing's signed. The authors are people you've never heard of."

Enlighten us. Give details and quotes.

Unknown said...

Boo. Text to stars and dots ratio is all off now.

CS said...

you are trying to convince others that Victoria's housing market has been flat for at least 6 years. That is completely incorrect (see my next post).

According to the graph that Leo S presented in his last post, the median Victoria SFH price has been within 8% of it current value for the last six years. If that's wrong, blame Leo.

The problem with youy position, Info, is that you are playing with tautologies. You define a bubble as a market that rises sharply and then collapses back to where it started. You then say, Victoria's RE is in a bubble, therefore, by definition, the price of Victoria RE is certain to collapse.

This is obviously invalid reasoning.

You could argue that markets with certain clearly defined characteristics, such as a doubling in price within 5 to 10 years always crash or they crash x percent of the time. But you have not said that. And in any case, it is not true of Canadian RE. The graph I linked to above shows that Canadian RE doubled between 1985 and 1990 but then held more or less steady until 2000 when it doubled again.

vawr said...

@totoro

"Oh how I've missed these stars and dots". Just another of your many digs @Info.

Well, we know of your distaste for Info. This is nothing new.
You appear quite capable of making a thoughtful reply rather than resorting to sarcasm and so it is mystifying why Info has
has you so flummoxed. Present the evidence that counters Info's
main points.

Otherwise this kind of post does you little credit.

CS said...

Income inequality has been increasing faster in the US than in any other industrial country, but it hasn't been very successful at holding up house prices ...

Incorrect, according to this page, for the validity of which I cannot speak.

It indicates that:

the ratio of the cost of a typical upscale housing unit of 100 square metres, compared to the countrys GDP per capita

Is 32 in the US, 16 in Canada.

Makes sense. Very many US house are 700 or 800 square feet on a slab, much inferior to the majority of Canadian houses.

Introvert said...

I don't know what the hell I'm looking at when it comes to info's stars and dots diagrams. I'm pretty sure they don't mean anything.

Unknown said...

Actually, info is probably quite nice in person. I have not distaste for info personally. There is no doubt that s/he is a speedy typist and quite focussed.

I'm also not flummoxed, although I really like that word. It is underused imo.

I am really tired/bored with the endless presentation of future "facts" that have not materialized in three (?) years.

Info has consistently and constantly predicted a doomsday US-style crash as imminent. Three years ago this was going to happen right away.

I tend to lose the will to spend the time to apply reason to repetitious statements after a while.

This website also doesn't offer the ability to quote past statements or search for them easily and that hampers things too.

So, in real life I do wish everyone success in their endeavours, real estate or otherwise.

I do also appreciate the defence mounted, but I think info has proved s/he is tenacious enough to continue through rain, sleet, wind and some sarcasm.

Unknown said...

"I don't know what the hell I'm looking at when it comes to info's stars and dots diagrams. I'm pretty sure they don't mean anything."

That made me laugh out loud.

Introvert said...

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Introvert said...

Dammit, I can only get half the tree to appear! Teach me your ways, info!

CS said...

Hey, don't tease Info.

There's nothing wrong with her chart. Well it may not be right, but it is readable. And it seems to be right.

It shows, for anyone worried about prices declining, a slide, gentle but ominous, since 2010. If this trend accelerates, I shall cheer — with apologies to those hoping for a rise.

Still if you invested in property not for a quick capital gain but for the benefit of ownership, and if your financial position is secure, it does not matter so much what happens to prices in the short run. What matters is whether, at the price you paid, you got benefits that justified that cost: a place to live, freedom to paint the dining room walls oxblood red if you so choose, to divide one room in two, combine two rooms in one, or plant a tree under who's shade you may one day sit.

Unknown said...

I can't understand it. There might be nothing wrong with it but it appears like jibber-jabber to me too - or a Christmas tree. Might need some explanatory notes for those of us with no special chart training.

Introvert said...

info, there's a program called Excel. It's handy, and it will make your graphs look a little more professional and be comprehensible.

Unknown said...

To be fair, he did explain the chart in the next post:

Basically, each bar represents the high and low price points reached within its 6 month time period.

I used the MLS home price index data for SFHs and converted it to percentage below peak.

Unknown said...

You're right. That does help.

One of the dangers of posting large blocks of text with similar messaging is that you might lose readership.

Of course, I still don't understand why, for example, 2008.5 has 15 stars and 2011.75 has only 3. I'm sure there is a reason, just not an obvious one unless info has also worked in a rating of how much fun each year was or something...

If so, 2012 was not very fun.

Introvert said...

Of course, I still don't understand why, for example, 2008.5 has 15 stars and 2011.75 has only 3. I'm sure there is a reason, just not an obvious one unless info has also worked in a rating of how much fun each year was or something...

I nearly power-washed my computer screen with tea when I read this! Thanks for the laugh.

Leo S said...

That event aside, I spend very little time on this. I'd bet a fair bit that the ROI per hour is much more than the consulting per hour.

All depends on your perspective or renting out part of your house. Having a stranger in the house would be loss of value of having the house in the first place. Might as well buy a townhouse or condo. But clearly it works for you, that's great.

Leo S said...

According to the graph that Leo S presented in his last post, the median Victoria SFH price has been within 8% of it current value for the last six years. If that's wrong, blame Leo.

You guys are arguing semantics. Info is saying we're down 10% which is not flat. You're saying we're within 8% of levels within the last 6 years which you say is flat.

So define flat. At what point is the market no longer flat? down 10%? Down 15%? Down 20%?

Bonus question: At what % decline can we say we were in a bubble?

Leo S said...

Dammit, I can only get half the tree to appear! Teach me your ways, info!

Seems like a monospace font would help.. But I don't think that's possible here. I suspect info is using some ascii chart generating software (at least I hope so).

Leo S said...

Of course, I still don't understand why, for example, 2008.5 has 15 stars and 2011.75 has only 3. I'm sure there is a reason, just not an obvious one

Stars represent the range of values that were touched in that period. Hence lots of stars (larger range) in 2008 during market volatility, and few stars lately when prices have just been sliding gently.

Unknown said...

"All depends on your perspective or renting out part of your house. Having a stranger in the house would be loss of value of having the house in the first place. Might as well buy a townhouse or condo. But clearly it works for you, that's great."

There is also the option to rent to family/friends. I do have two sets of friends who have one parent living in a suite.

I don't agree that having a suite that you own is the same as having other owners next to you. You get to choose who moves in, you set the rules, and you can get rid of them if necessary.

Leo S said...

There is also the option to rent to family/friends. I do have two sets of friends who have one parent living in a suite.

Sure. Mom in law is living in our suite. Works great. We have family nearby, she gets a cheap place to live, and we have a resident babysitter. To me that's totally different than renting out the suite to a random. Just wouldn't feel like a house to me if I had to think about the random person downstairs anytime we made some noise up here.

Johnny-Dollar said...

Judging the man by the price of his castle.


How well you're doing in the homeownership game depends largely on where you live.

Oak Bay is a small community of around 10,000 people, yet it comprises about one-third of all the most costly home purchases for the Greater Victoria area.

And in this feat of mental masturbation I am going to assume that everyone wants to live in Oak Bay. In that way I can separate the "rich" from the "poor".

For the last 500 home sales in Oak Bay the median price paid for a home rang in at $753,000 for a 2,354 square foot home on an 8,000 square foot lot. In the world of Oak Bay, this is middle class. Mom works for the government and Dad is self-employed. One of their 2.5 kids will have a drinking and/or drug problem, two unplanned pregnancies and mom is spending a lot more time at the office these days.

The bottom 10 percent own a home worth between $442,000 to $512,000. Dad and mom are stoners, Little Suzy is doing tricks, Bobby is withdrawn and plays with matches, and the dog is constantly pregnant as Dad sells the puppies for dope money.

Then there is me. The top 10 percent. Us overachievers own a home worth between 1.9 million to 6.5 million. Our spouses are trophies. We volunteer serving dinners at the Upper House. We're always tanned and have nice teeth. Litte Buffy is in pre-med and Biff may be on the PGA tour this year. We are always buying puppies from our neighbours.

Johnny-Dollar said...
This comment has been removed by the author.
CS said...


So define flat.


Well how do you want it defined?

I say within 8% of a horizontal line for six years is flat.

But if you want a stricter definition, say plus or minus 1%, that's fine with me. But in that case we have no trend or much chance of spotting a trend. We just have a random walk, up some, down some, down some more, then up again, etc.

None said...

@info

If you would like to give a link to the data I'll shoot you some R - code to auto generate plots.

Excel is for amateurs.

CS said...

Or you could define flat as a non statistical deviation of a linear regression from the null hypothesis, i.e., a horizontal line. Since 2008, I'm pretty sure the result would be flat, though None may be able to give a definitive answer.

From 2010, as noted, there is a slight downtrend (much emphasized in Info's graph, which plots differences from peak, not total values).

Whether a linear regression of the data differs significantly from the horizontal, I'm not sure. But if it continued for another three years, then pretty certainly we could say that there had been a statistically significant downtrend.

But still we'd not know where things were going next!

Leo S said...

I say within 8% of a horizontal line for six years is flat.

So in a decline we could be down 16% from peak and you'd still think it's flat. By factoring in inflation that's probably over 25%.

That's a pretty loose definition of flat. I hope you're not a carpenter.

CS said...

"factoring in inflation"

Come on. Your changing the question. Info's data are nominal. You didn't ask my definition of flat in constant dollars.

But it seems there is no definition of flat that you would accept. Or if there is, why not state it? Or better still, give us a definition of real decline, as opposed to statistical noise, and also your definition of crash, since that term is bandied about so freely.

Then we might begin to know what we're talking about.

CS said...

Should be you're, as will be obvious except to those of too literal mind.

But further, you may ridicule a statistical definition of flat, but if so, what test would you apply to establish whether a data series shoes a real trend or merely random variation?

CS said...

And since you think the market has not been level the last six years, tell us: is it tilted downward from the peak of 2010, from which it has fallen 8%, or is it tilted upward from the trough of 2008/9 from which it has risen 8%?

Leo S said...

Come on. Your changing the question.

No, that was additional information. Fact remains, you think a nominal decline of 16% is flat. Not going to find many people that will agree with that. When that unlucky owner has to sell and face a loss of almost $100,000 I don't think they're going to be too happy about your flat market.

But it seems there is no definition of flat that you would accept.

Well I don't think many people agree that -16% is flat.

Or if there is, why not state it?

Somewhere around within 5% of peak is flat.

Or better still, give us a definition of real decline

Well there has been real decline since 2010. So somewhere around 10% is where that would start.

your definition of crash

~25% or more.

koozdra said...

In this situation ones definition of "flat" becomes subjective. If you bought at the peak, the market has declined. If you bought before the peak and you are in a positive or neutral position then the market is flat.

Leo S said...

In fact if you ask the hometowner they will probably be quite strict in their definition of flat and not care a bit about percentages but rather dollars.
5% of an average home in Victoria is $30,000. Would someone that is facing the prospect of losing $30,000 (+ realtor fees, so more like $50,000) on their home believe the market is flat? Likely not.
I'd say you could sell the flat market theory to people if they can sell their home for +- $15,000 of the purchase price, or more like no less than -2%.

koozdra said...

A crash is when the media starts to notice that foreclosure rates are getting to an "uncomfortable" level.

That's when the ageing demographic of Victoria will experience their "holy shit" moment.

"Those youngens ruined our economy!!"

"Who allowed them to take on some much debt?!?!"

"What do you mean the housing market isn't about to ramp up again? Didn't you see that TV commercial? Everybody's coming here soon!"

Leo S said...

you may ridicule a statistical definition of flat

What statistical definition? I don't recall that "within 8% of a horizontal line" is a statistical definition of flat.

Trends are tricky, and the hard and fast definition you are seeking does not exist.
What we know is more data is better, but more data also hides small variations. Whether those small variations are legitimate trends or noise depends on the scale.
We can use yearly data for 50 years and conclude the trend is strongly up. Does that help us much going forward? Not really.
We know that seasonality is strong in real estate, so we can be pretty certain that any trends using less than a year's worth of data are suspect. The reason we talk about shorter intervals is because yearly data changes slowly so there has to be something to talk about in the meantime, but I wouldn't put too much stock in it.

Johnny-Dollar said...

The best I can do to track distress sales is to follow the percentage of sales available for immediate occupancy.

In the core districts, for houses, that's up from the more common 10% to 16% today.

Not all of these homes are distress sales and I would expect that vacant homes would be a higher percentage of the total in the Winter months. But it likely shows the direction the market is trending.

For condos in the core, that rate is now 31%.

Oddly the western communities is only showing 12% for houses.

Condos in the W.C. have about 35% of the listings available for immediate occupancy.

A far from perfect measure of distress sales - but what else ya got!

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

Monday, December 16, 2013 8:15am

MTD December
2013 2012
Net Unconditional Sales: 195 283
New Listings: 282 405
Active Listings: 3,709 3,896

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

Johnny-Dollar said...

Property Assessments will be delivered to some of our doors soon. Maybe it's time to see how well our current market has performed since the assessment date of July 1, 2013.

The median price of a condo in the city districts has dropped from $283,500 and 95.4% of its assessed value to $275,000 with the typical condo now selling at 88.5 percent of assessed value.

My guess is that you'll see this years assessment lower than your previous one. That doesn't necessarily mean you'll pay less taxes. As the Fortin Team will just increase property taxes or more likely invent new taxes and raise garbage/water rates.

Johnny-Dollar said...
This comment has been removed by the author.
Johnny-Dollar said...

For those that "own" a house the market has been stable with the median price as at July 1, 2013 clocking in at $572,500 and selling at 100.5 percent of its assessed value.

Very little change when compared with today. As the median home price is now hovering around $570,000 and the typical home selling at 99.3% of assessed value.

No shocks coming in the mail next month for urban house owners.

And while the home ATM machine is still working it does look like it isn't going to be filled up anymore. That doesn't look good for consumer sales for next year.

The good news is your morning Corn Flakes are still made in Canada and not downstream from a battery plant in China.

CS said...

Well there has been real decline since 2010. So somewhere around 10% is where that would start.

But we're off only 8% from the tippy top. So no decline yet, which means we're still flat.

Or if you call 8% from the tippy top a decline, then at plus 8% from the trough of 08/09, we're rising at the same time.


Johnny-Dollar said...

I understand the fixation people have with price. But it's like counting your chips while still playing poker.

What I find most important is sale volumes. You don't go out of business by selling beans at $500 a can. You go out of business because you're only selling one can of beans at $500.

Total home sales in all of Sooke for all of November was 12

For Metchosin was 1
Highlands was 4
Langford was 22
Colwood was 5

Our market place is shriveling up and being concentrated into a smaller and smaller geographical area. By simply looking at prices you risk lulling yourself into the believe that if prices are not falling everything is fine.

reasonfirst said...

Or if you call 8% from the tippy top a decline, then at plus 8% from the trough of 08/09, we're rising at the same time.

You can only make that statement if you ignore the major economic events that took place at that time.

info said...

@ CS

"But we're off only 8% from the tippy top. So no decline yet, which means we're still flat.

Or if you call 8% from the tippy top a decline, then at plus 8% from the trough of 08/09, we're rising at the same time."

SFH prices in Greater Victoria have been declining since 2010 (see my next posts). SFH prices have declined 10% from peak (MLS HPI).


info said...

. . . . . . . . .Percentage Price Decline From Peak (MLS HPI). . . . . . . . .
. . . . . . . . . . . Greater Victoria - Single Family Homes. . . . . . . . . . . . .
. . . . . . . . . . . . . . . . .( 6 month high-low chart ). . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . .0%. . . . . . . . . . . . . . . . . . . . . .*. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 0.5%. . . . . . . . . . . . . . . . . . . . . .*. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 1.0%. . . . . . . . . . . . . . . . . . . . . .*. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 1.5%. . . . . . . . . . . . . . . . . . . . . .*. . .* . . . . . . . . . . . . . . . . . . . . . . . . .
- 2.0%. . . . . . . . .*. . . . . . . . . . . . .*. . .*. . .*. . . . . . . . . . . . . . . . . . . . . .
- 2.5%. . . . . . . . .*. . . . . . . . . . . . . . . .*. . .*. . . . . . . . . . . . . . . . . . . . . .
- 3.0%. . . . . . . . .*. . . .*. . . . . . . . . . . *. . .*. . . *. . . . . . . . . . . . . . . . . .
- 3.5%. . . . . . . . .*.. . . *. . . . . .*. . . . . *. . .*. . ..* . . . . . . . . . . . . . . . . . .
- 4.0%. . . . . . . . .*. . . .*. . . . . .*. . . . . *. . .*. . ..* . . . . . . . . . . . . . . . . . .
- 4.5%. . . . . . . . .*. . . .*. . . . . .*. . . . . *. . .*. . ..* . . . . . . . . . . . . . . . . . .
- 5.0%. . . . . . . . .*. . . .*. . . . . .*. . . . . . . . . . . . * . . *. . . . . . . . . . . . . . .
- 5.5%. . . . . . . . .*. . . .*. . . . . .*. . . . . . . . . . . . * . . *. . . . . . . . . . . . . . .
- 6.0%. . . . . . . . .*. . . .*. . . . . .*. . . . . . . . . . . . * . . *. . .*. . . . . . . . . . . .
- 6.5%. . . . . . . . .*. . . .*. . . . . .*. . . . . . . . . . . . . . . . . . .*. . . . . . . . . . . .
- 7.0%. . . . . . . . . . . . . *. . . . . *. . . . . . . . . . . . . . . . . . ..*. . . . . . . . . . . .
- 7.5%. . . . . .*. . . . . . .*. . . . . . . . . . . . . . . . . . . . . . . . . *. . . . . . . . . . . .
- 8.0%. . . . . .*. . . . . . .*. . . *. . . . . . . . . . . . . . . . . . . . . .*. . . .*. . . . . . . .
- 8.5%. . . . . .*. . . . . . .*. . . *. . . . . . . . . . . . . . . . . . . . . . . . . .*. . . . . . . .
- 9.0%. . . . . .* . . . . . . *. . . *. . . . . . . . . . . . . . . . . . . . . . . . . .*. . *. . . . .
- 9.5%. . . . . .*. . . . . . .*. . . *. . . . . . . . . . . . . . . . . . . . . . . . . . . . .*. . . . .
-10.0%. . . . . . . . . . . . .*. . . *. . . . . . . . . . . . . . . . . . . . . . . . . . . . *. . . . .
-10.5%. . .*. . . . . . . . . . . . . *. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-11.0%. . .*. . . . . . . . . . . . . *. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-11.5%. . .*. . . . . . . . . . . . . *. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-12.0%. . .*. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
------------------------------------------------------------------------------------------
. . . . . . . . . .07. . . .08. . . . .09. . . . 10. . . . .11. . . . 12. . . . .13. . . . . . .


Each vertical bar represents 6 months worth of price data. There are two 6-month bars for each year. SFH prices have declined since 2010 and are currently 10% below peak.

There is nothing flat about that.

info said...

. . .SFH Percentage Price Decline From Peak. . . . .
. . . . . . . . . . . .( 3-month median ). . . . . . . . . . . . . . .
(Esquimalt, Sidney, Colwood, Langford and Sooke)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-5.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-5.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-6.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-6.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-7.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-7.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-8.0% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-8.5% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-9.0% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-9.5%. . . . . . . . . . . .* . . . . . . . . . . . . . . . . . . . . . . . .
-10.0%. . . . . . . . *. . . . . . . . . . . . . . . . . . . . . . . . . . .
-10.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-11.0%. . . . . . . . . . . . . *. . . . . . . . . . . . . . . . . . . . . .
-11.5%. . *. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-12.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-12.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-13.0%. . . . . . * . . . . . . . . . . . . . . .*. . . . . . . . . . . . .
-13.5%. . . . . . . . . . . . . . . . . *. .*. . . . . . . . . . .* . . . . .
-14.0%. . . . *. . . . . . . . . . . . . . . . . . .*. .*. .*. . . . *. . .
-14.5%. . . . . . . . . . . . . . . * . . . . . . . . . . . . . . . . . . . .
-------------------------------------------------------------------
. . . . . . . S. O. N. D. J. F. M. A. M. J. J. A. S. O. N . .
. . . . . . . . .2012. . . /. . . . . . . . 2013. . . . . . . . . . . . . .


As this chart shows, prices at the lower end of the SFH market have declined 14% from peak (2010).

info said...

. . Percentage Price Decline From Peak (3-month median) . .
. . . . . . .(Oak Bay, Saanich East and North Saanich) . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 2.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 2.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 3.5%. . .*. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 4.0%. . . . . * . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 4.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 5.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 5.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 6.0%. . . . . . . . . . . . . . . . . . . . . . * . . . . . . . . . . . . . . . . . . . .
- 6.5%. .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 7.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . .*. . . . . . . . . . . . . . .
- 7.5%. . . . . . . . . . . . . . . . . . . . . . . . .* . . . . . . . . . . . . . . . . .
- 8.0% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 8.5% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 9.0% . . . . . . .* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 9.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .*. .* . . . . . . . . . .
- 10.0%. . . . . . . . . . . . . . . . . . . * . . . . . . . . . . . . . . . . . . . . .
- 10.5%. . . . . . . . . . . . . * . . . . . . . . . . . . . . . . . . .*. . *. . * . .
- 11.0%. . . . . . . . . . . * . . .* . . . . . . . . . . . . . . . . . . . . . . . . . .
- 11.5%. . . . . . . . .* . . . . . . . * . . . . . . . . . . . . . . . . . . . . . . . .
- 12.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-----------------------------------------------------------------------------
. . . . . . . .J. A. S. O. N. D. J. F. M. A. M. J. J. A. S. O. N. . .
. . . . . . . . . . . . .2012. . . /. . . . . . . . 2013. . . . . . . . . . . . . . .


As this chart shows, prices at the upper end of the SFH market have declined 10.5% from peak (2010).

info said...

"For those that "own" a house the market has been stable with the median price as at July 1, 2013 clocking in at $572,500 and selling at 100.5 percent of its assessed value."

SFH MLS HPI data shows a 2.2% price decline since July 1, 2013.

info said...

Total SFH sales across Greater Victoria have been weak since 2010 (yearly totals have been about 25% below the 25 year average). 2013's total will be no different.

Leo S said...

Or if you call 8% from the tippy top a decline, then at plus 8% from the trough of 08/09, we're rising at the same time.

And since 1974 we're up 400% so we're on a huge upward swing!

Johnny-Dollar said...

The HPI numbers are for all of Greater Victoria which includes the western communities and Saanich Peninsula. My data is just for homes in the core districts of Victoria.

Having said that, I would also like to say that the data I am using is for a block of 500 sales.

How many are being used to determine the HPI index? Until the board is more transparent on how the HPI index is calculated, I'll stick with the HPI being usefull as a cross check only.

LeoM said...

All this debate about whether or not Victoria's housing market will crash is getting too complex and microeconomic. Think macroeconomic.

Currently annual inflation is about 1% per YEAR.

Currently Victoria's SFH, 3 bedroom, 2 bath, in good condition, in good neighbourhoods, on similar streets and with similar lot sizes, have prices deflating at 0.7% per MONTH. (SFH with excellent excellent renos are not included.)

When mortgage interest rates increase above 5% for a five year mortgage, the SFH deflation rate will accelerate, probably up to 1.2% per month; or about $7,000 per month.

In other words, a SFH curently valued at $600,000 will deflate by about $86,000 per year when 5 year mortgage rates exceed 5%.

TJ said...

I am a long time lurker Leo,I had to chime in though when I saw you fit that power function to house prices.

Do me a favor - take that same function and tell me what it predicts for home prices in 2030 or even 2050. Does anybody really think we'll be paying $93 million for a bungalow in Oak Bay in 2050?

If anything the slope on the line is skewed by the price bubble we are in. Fit the data through 2000 and put that line on there. House prices aren't increasing due to a power function. We are in a bubble.

TJ said...

I am a long time lurker Leo,I had to chime in though when I saw you fit that power function to house prices.

Do me a favor - take that same function and tell me what it predicts for home prices in 2030 or even 2050. Does anybody really think we'll be paying $93 million for a bungalow in Oak Bay in 2050?

If anything the slope on the line is skewed by the price bubble we are in. Fit the data through 2000 and put that line on there. House prices aren't increasing due to a power function. We are in a bubble.

Johnny-Dollar said...

I wonder how the graphs relate to actual performance in the marketplace.

36 years ago in April of 1978 a home on Linden Avenue was purchased at $55,800. The home has had only minor updating over the years and is in pretty much original condition.

Could you project a current value for the property just by the graphs?

The property has just resold at $620,000

Real estate said...

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