Thursday, March 20, 2014

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.


March 2014March
 2013
Wk 1Wk 2Wk 3Wk 4
Unconditional Sales132
259


483
New Listings361664

1231
Active Listings38263927

4333
Sales to New Listings
37%
39%

39%
Sales Projection---543


Months of Inventory
9.0


Despite all appearances, House Hunt Florida continues.
And it seems so does the Victoria market.   Sales seem to be off to a strong start here, a bit of a surge unlike last year.  Do people buy houses during spring break?   If this pace continues we will eclipse last March in sales by quite a bit, and even post a somewhat respectable number.    Wonder how our new finance minister will react to his predecessor's failed efforts to tame the housing market?


Update thanks to poobserv:  Looks like I'm dyslexic and wrote 295 rather than 259.  Sales are ahead of last year's pace but not nearly as much as previously stated.


91 comments:

caveat emptor said...

I'm correct. You are incorrect.

Another devastating rebuttal from info.

Small net migration to CRD from other provinces has to be a positive for RE here whether those people rent or buy. Certainly if it was the other way around - net out-migration from CRD you would be using that data to say how weak the Victoria market is.

The increased talk on this blog about Alberta sales is a sure sign that Victoria's housing market is in serious trouble.

Is that like the "chatter" a couple years back that was supposed to foretell a crash?

Can you enlighten us on the meaning of "the increased talk on this blog about Florida"?

David said...

@ Info
"The increased talk on this blog about Alberta sales is a sure sign that Victoria's housing market is in serious trouble."

Except that sales are "off to a strong start here, a bit of a surge unlike last year." Look at the numbers and comment in the post above.

David said...

@LeoM

Canadian February CPI Rises More than Expected
http://www.actionforex.com/analysis/daily-forex-fundamentals/canadian-february-cpi-rises-more-than-expected-20140321211502/

The explanation of why the BoC got it wrong.

"Because of the large monthly increases in both the overall and core CPI in February 2013, there has been widespread speculation, confirmed with today's release, that the February 2014 year-over-year rates would drop markedly lower as the so called ‘base effect' dropped out of the annual calculation. This was likely the factor prompting the Bank of Canada to project in its January 2014 forecast very low annual increases in overall and core inflation for the first quarter of 2014 of 0.9% and 1.0%, respectively. With both today's data and the earlier-released January CPI numbers coming in stronger than expected, average values during the first two months of the first quarter of 20213 are pointing to inflation averaging around 0.3 to 0.4 percentage points higher than assumed in the central bank's forecast."

___
Price of shelter is up 2.2% y/o/y, and up 0.1% m/o/m.
http://www.statcan.gc.ca/daily-quotidien/140321/longdesc-cg140321a003-eng.htm

info said...

@ caveat

"Small net migration to CRD from other provinces has to be a positive for RE here whether those people rent or buy. Certainly if it was the other way around"

I'm sure there is a small net migration from other provinces to Calgary, Edmonton, Saskatoon...

The fact remains - there is no evidence that buyers from Alberta or any other Canadian province have had a positive effect on house prices in Victoria.

Several regulars of this blog claimed that HAM had a positive effect on house prices in Victoria. That may have been true. If it was true, then the absence of HAM will have a negative effect on house prices.

" - net out-migration from CRD you would be using that data to say how weak the Victoria market is."

Really?

"The increased talk on this blog about Alberta sales is a sure sign that Victoria's housing market is in serious trouble."

"Is that like the "chatter" a couple years back that was supposed to foretell a crash?"

I'm sure there were bloggers that predicted a crash. I wasn't one of them. However, Victoria's housing market may crash.

info said...

@ David

"Except that sales are "off to a strong start here, a bit of a surge unlike last year." Look at the numbers and comment in the post above."

Let's compare total SFH sales from January and February of this year to the same two months of the previous 4 years.

(Jan. + Feb.) total SFH sales:

2010: 469
2011: 408
2012: 422
2013: 335

2014: 402

(source: board)

2014's total is comparable to the totals of the previous 4 years. There has been no strong start to 2014.

Total yearly SFH sales for 2010 through 2013 were well below average.

2013 started quite slow as a result of the mortgage rule changes that took effect in the last half of 2012.

It is, therefore, unfair to restrict the comparison to 2013's sales.

dasmo said...

"Several regulars of this blog claimed that HAM had a positive effect on house prices in Victoria. " Prove it...

poobserv said...

Are the unconditional sales 295 as given here or 259 as given in Marko's post of March 17?

Marko said...

Property in Oak Bay just sold a few hours ago for $2,800,000. Buyer from Calgary.

Marko said...

Lots of Albertans lighting up the board today. Property on triangle mountain to a buyer from Edmonton for $825,000 a few minutes ago.

Doug N said...

I rarely post, but appreciate all the thoughts and insight shared on this blog.

I know others have posted rent-vs-buy spreadsheets, but I thought I'd contribute my House Cost Worksheet for anyone who is interested. It compares the full cost of ownership for several "home" options.

Here's a link http://1drv.ms/OGea8i

Feel free to download. Feedback is welcome, especially if you find errors!

Leo S said...

>> Are the unconditional sales 295 as given here or 259 as given in Marko's post of March 17?


Whoops. Thanks for noticing. So much for the sales surge. Just more or less a continuing of the previous pace.,

Seth Perry said...

@Doug N, thank you for a very detailed rent vs buy spreadsheet. Impressive.

I used your example of a $100,000 down payment on the Dockside 2br at $475,000. I left the "Estimated Average Annual Financial Investment Return" at 4% annually and added a similar 4% under "Estimated Annual Appreciation for this type of Property" just for fun.

The "Final Cost Savings (Loss) per Month -vs- Rental 1" was ($69).

After 10 years of owning a home at a 4% annual appreciation, I'm still loosing?

Comments from others?

Thanks again!

Al + TOH said...

Below was posted on Victoria Kijiji by someone from Calgary (people from other province trust and use kijiji more than craigslist):

"Going away this winter? Looking for furnished apt/condo in Victoria (Oak Bay, West Vic, Cook Village) mid Dec - mid/ late Jan. Will pay to avoid another prairie winter this year! N/S. Must have internet and phone. Please send photos, price. "

http://www.kijiji.ca/b-short-term-rental/victoria-bc/c42l1700173

Buying or renting, I guess there are some people who just want or need to stay in Canada, even with our winter rain.

We have a couple friends (we knew each other from our student life in UVic) in Calgary, they are still about 7,8 years away from retirement, have a bright and young son working in Wall Street. In past 4 years, they keep asking me to check houses(for sale) for them, and came out a couple times to check themselves.

We moved back from ON ourselves. Although we do go away in the winter, believe me, winter rain here is much better than ice rain in the east.

Jack and Cate said...

Al + TOH said...

"....Buying or renting, I guess there are some people who just want or need to stay in Canada, even with our winter rain."
------------------------

Or just maybe they are not able to travel due to -

- Family emergency near by
- Criminal record
- Upcoming court appearance
- Need to be close to western air/water shipping routes
- ________________


One just never knows, you are certainly correct.

Just Jack said...

My neighbor can't travel into the USA because he was arrested for smoking Pot on a Florida Beach 20 years ago.

He tried a couple of years ago, but the US Immigration stopped him in the Chicago Airport and escorted him onto the next plane to Canada and he was told never to return.

Al + TOH said...

Then if we all are "honest" at the borders, not many Canadians can buy condos/houses in US, no matter how cheap they are, ha ha ha

Doug N said...

@Seth Perry - I believe the worksheet is correct. The owner who is renting out the $475k unit at Dockside for $1800 has both a negative cash flow and a negative rate of return (based on $100k down and assumptions entered), even if the unit appreciates at 4% (2% above inflation), which I doubt it will.

My worksheet looks at total cost of ownership including condo fees, maintenance, utilities, etc., which significantly affects the bottom line.

I've re-posted a tweaked spreadsheet with investment income separated out in the last section for clarity.

http://1drv.ms/OGea8i

The worksheet gets quite interesting if you enter say a million for cash available and compare owning a house with and without suite income. A 650k home with $600/mnth net income costs less overall than a 340k home without a suite over 10yrs. (paying cash, based on investment assumptions 4% return, 2% inflation, 2% home appreciation)

--------------

I've also done up a "Revenue Property" version using the same approach at this link:

http://1drv.ms/1dn8DPf

Feedback welcome as I may have missed something.

Marko said...

You don't even need to spend 650k for something with a suite....you could net $600 in rent from this place.

http://beta.realtor.ca/propertyDetails.aspx?PropertyId=14139626

Just Jack said...

The Spring market has begun.

Looking at the marketplace for single family homes from Port Renfrew to Sidney to Oak Bay, the marketplace is well balanced between buyers and sellers. With 6 Months of Inventory and a Sales to New Listings Ratio of 56%. A balanced market with stable prices is typically described as 5 to 7 MOI and a SNL% between 40 to 60%.

Now let's hatchet this market up a bit. While from sea to sea it appears everything is coming up Daffodils there are some weeds that need attending.

Activity in the core districts around Victoria are skewing the overall view of the marketplace. Indeed its all Roses and Tulips with 4.7 MOI and an SNL% of 63%. A market, while still balanced, is leaning to sellers having a stronger bargaining position.

The opposite is true out in the sticks and weeds of the Westshore. Here you have 8.3 MOI and an SNL% of 45%. A market that favors buyers. With lots to chose from, prospective buyers are much more pickier than city buyers. So while leaky basement homes in Fairfield may still get multiple offers, the same home in Sooke is destined to become a rental property for the owner or a court sale.

StalJ said...

Groovy spreadsheet Doug.

My only problem with it are the inputs. Purchase 3,4 and to some extent 5 --see Marko’s example-- have come down alot from your input prices. I bought a 1310sq’ condo of late for 227 that was assessed at 325 for example. My payment is $715 and fee of $283. Yours seemed high at $1206 & $400. Lastly I think it will outdo inflation over the long-term by about 3-4%. I believe you set appreciation to negative or 0.

StalJ said...

If you want a crazy MOI, a buddy west od Edmonton says it's approaching 1.0 MOI!

Doug N said...

@StalJ - Just sample data in the worksheet.

If you download it and update all the yellow fields to your values, the results should reflect your situation.

That's the purpose really, to do what-if scenarios using your own situation and "crystal ball" for the future.

Just Jack said...

And now for something completely different...


New strata condos versus pre-owned condos.

The never been shagged in condo market has some 6.15 MOI and a SNL% of 49%. Nicely balanced to give you time to look around and make your best deal.

In contrast the pre-owned condo market has slightly higher inventory at 6.8 MOI and a SNL% of 56%.

It does seem that condo developers are becoming more aggressive in trying to lower their inventory. But it's tough to guess what's really going on in that market segment. The new condo market is like a cheating spouse - just too many games going on.

Just Jack said...

And for those that care about pre-owned condos in the core. Prices are up year over year from a median of $248,000 to today's value at $255,750. Or to be a little more precise the median sales to assessment ratio for pre-owned condominiums in the core districts has increased from 92.85 to 95.2. That's a 2.5 percent increase from a year ago.

patriotz said...

Lastly I think it will outdo inflation over the long-term by about 3-4%.

A condo? Seriously? You think that someone will pay, say, twice today's price in terms of rent or household income 24 years or sooner in the future? Four times in 48 years? See where that's going?

StalJ said...

It's not exactly rocket science to figure out.
Prices have beat inflation by close to 4% over the past 48 years, so why pray tell would they not again over the next 48 years?

Leo S said...

>> Prices have beat inflation by close to 4% over the past 48 years, so why pray tell would they not again over the next 48 years?

Yes indeed why not. Maybe you can think a bit more and find the flaw in your reasoning

LeoM said...

StalJ said...

It's not exactly rocket science to figure out.
Prices have beat inflation by close to 4% over the past 48 years, so why pray tell would they not again over the next 48 years?
----------------
Please tell me, StalJ, who you think will replace the wave of baby boomers who caused real estate prices to perform so well for the past 48 years?

LeoM said...


I'm in a good mood tonight StalJ so I'll give you clue. Check this link to see why 4% net annual increase likely won't occur in the future unless we allow massive immigration of well-off middle class foreigners into Canada.

StatsCan Animated Demographics



StalJ said...

Please tell me, StalJ, who you think will replace the wave of baby boomers who caused real estate prices to perform so well for the past 48 years?

No replacement is required if you position yourself in front of them. They ain't headed to memorial park for at least anohter 20. They have barely begun retiring. Soon begins 20 to 30 years of downsizing all the way to thier memorial plots. And yes I would like to own a nursing and maybe funeral home by 2034. BTW we have more than twice the net immigration rate as the USofImmigrants ;)

patriotz said...

Prices have beat inflation by close to 4% over the past 48 years

There weren't any condos 48 years ago.

Why do you think a condo that's new today is going to sell for twice as much in inflation adjusted terms two decades later, when there's unlimited new supply?

Are condos that are now two decades old doing that well, even in the context of the house price inflation of the last decades?

Marko said...

Monday, March 24, 2014 8:00am

MTD March
2014 2013
Net Unconditional Sales: 393 483
New Listings: 953 1,231
Active Listings: 4,007 4,333

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

Marko said...

My projection for the month is 540 to 560 sales.

StalJ said...

Are condos that are now two decades old doing that well, even in the context of the house price inflation of the last decades?

The last two decades had the BBs transitioning thru their house trade up years and the BBs kids were just toddlers two decades ago.

Why do you think a condo that's new today is going to sell for twice as much in inflation adjusted terms two decades later, when there's unlimited new supply?

Unlimited? To be clear, I don't think many of the "new" small condos have a chance at beating inflation by 4%. You got to be smart when buying a condo. Location and your share of the land of that location are crucial. Near shops & medical, borderign parks or water, and favorable to getting higher density zoning in the future. For instance look into what some of the land is already worth today in West End Vancouver, because if supply was unlimited it would essentially be worthless ;)

Doug N said...

@StalJ - House prices didn't increase over the last 48 years (why 48?) in isolation. For instance, the long decline in interest rates since the 80s is an undeniable influence that has gone as far as it can. Even if rates stay flat, there's no more house price gain to come from it. Affordability matters.

How do you account for that (and other factors) in simply saying that past property value increases will repeat into the future? As an investment decision, a hunch like that needs some data to back it up!

Marko said...

I see nothing wrong with real estate prices following inflation from here going forward.

Out-doing inflation is just gravy in my opinion.

Just Jack said...

2034? That would make the first of the boomers almost 90 years old?

The die off starts about mid 50's in your life time. That might get sooner for the next generation with the amount of fast and GMO foods that people eat today.

Right now the first of the boomers are hitting 70 years - just old enough to become a Finance Minister.

What I'm seeing are these early boomers (age 60 to 70) selling their investment properties as the tenant vacates. Lots of empty homes on the market these days.

If you're a late boomer of say 50 and waiting to sell your investment property 10 years from now - you might just be following prices down for the next decade. Because it isn't boomers dying - its todays boomers selling their surplus properties to finance travel and retirement.

Every boomer I know over the age of 65, that had rental condos or houses, have now sold those surplus homes. With one exception he owns an apartment block in Duncan.

As one of them said to me:
"been there - done that"

Just Jack said...

House prices are set by supply and demand there is no reason why they should track inflation.

In fact, the cost of maintaining a home is rising a lot faster than inflation. It takes a lot more or your disposable income to live in a home today, than it did 10 years ago.

And I don't see any austerity moves by any of the Mayors to change that trend. They seem to be going out of their way to find more ways to pry open your wallet these days.

StalJ said...

How do you account for that

For real life data, you can look at how real estate gains also beat inflation in the decades leading up to the 80s, when interest rates went from todays levels to 18%. I believe from the mid40s rate bottom to 1980 prices beat inflation by roughly 2% per year while interest rates went from negligible to 18%. The explanation of course is that it's not so much the interest rate that matters, as the difference between that interest rate which you can borrow at, and the rate at which the things you have borrowed for are rising in price.

ie. wuold you rather borrow money to buy widgets at 2% while they are rising in price at 3%,
Or would you rather borrow at 6% when they are rising at 8% per year?
Clearly you would prefer to borrow at 6% when you are netting 2% return. Even better would be to borrow at 2% before widgets begin rising at a rate of 8%.

caveat emptor said...

"Every boomer I know over the age of 65, that had rental condos or houses, have now sold those surplus homes."

That matches my observations.

Most retirees I know or am aware of have sold income property sometime between 60 and 70. By contrast I know a number of retirees who have held onto vacation property well into 70s and even 80s if their health holds up.

From speaking to retirees they cite both the "hassle" of owning income properties and the need/desire to cash in as the reasons to sell.

David said...

@ Just Jack

If the boomers’ parents are still alive, many boomers will likely make it to 90 too, no?

_The Province, Mar 18/2014
“A trillion-dollar transfer of wealth as baby boomers come into their inheritances will…”

info said...

@ Just Jack

"The Spring market has begun.

Looking at the marketplace for single family homes from Port Renfrew to Sidney to Oak Bay, the marketplace is well balanced between buyers and sellers. With 6 Months of Inventory..."

6 months of inventory puts Victoria in buyer's market territory. In other words, buyers have the advantage over sellers. There is not enough demand and too few buyers.

Buyers are in control in Victoria and have been for some time. As a result, single family home prices have been falling since 2010.

info said...

Out-of-town buyers would, most likely, consider the following US cities first as potential locations in which to purchase a vacation property. Among the reasons would be warm weather and a desirable location.

Group 1: Phoenix, Miami, Tampa, Los Angeles, San Diego, San Francisco and Las Vegas

The average price correction from peak of these cities was 50%.

(Source: index)

Out-of-town buyers would be less likely to purchase a property (for vacation use) in the following US cities. Among the reasons would be colder weather and a less desirable location.

Group 2: Washington, Charlotte, New York, Seattle, Portland, Boston, Chicago, Minneapolis, Denver, Atlanta, Dallas, Cleveland and Detroit

The average price correction from peak of these cities was 29%.

The US cities with the warmest winter weather (in general) in the most desirable locations (in general) experienced the biggest price declines from peak. Victoria will likely experience the biggest price decline from peak of any major Canadian city. Prices in Victoria are already down 10% - 15% from peak while prices in many other Canadian cities continue to hit new record highs.

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

@ Just Jack

"And for those that care about pre-owned condos in the core. Prices are up year over year from a median of $248,000 to today's value at $255,750. Or to be a little more precise the median sales to assessment ratio for pre-owned condominiums in the core districts has increased from 92.85 to 95.2. That's a 2.5 percent increase from a year ago."

This information cannot be verified by other bloggers.

You have argued (many times) against (verifiable) evidence that single family home prices across Greater Victoria have fallen about 10% from peak. It's obvious which side you are on.

Why should we believe your numbers?

Where is the proof?

Al + TOH said...

Hi Info, I just read your last post (after skipping many others of yours), and I can't help but laughing. Everyone who has been here for a while and follows past posts knows that Just Jack is a property appraiser, so it is his work to know the market, otherwise he would not have a job.

Or you never have time to pay attention to others to understand where they are from? Sign ...

Al + TOH said...

Plus, Just Jack is more on your side, if you pay attention and notice. Another sign ...

Al + TOH said...

Sorry Sigh (again :-)...

patriotz said...

I believe from the mid40s rate bottom to 1980 prices beat inflation by roughly 2% per year while interest rates went from negligible to 18%.

First of all 1980 was near the top of a bubble. And prices did not recover from the 1930's crash until the late 1940's. Until the creation of CMHC in 1946 it was almost impossible for the average person to get a mortgage loan, which depressed prices.

In other words you are picking your end date during the biggest bubble seen to that time and your beginning date still not recovered from the biggest bust ever.

Second mortgage rates were never "negligible", regardless of what government bond rates were. BoC has a mortgage rate table which inquiring minds can use to confirm this.

Third wages were also outpacing inflation over this whole period. This ended, surprise, around 1980.

LeoM said...

Info...
Are you my former neighbour who sold your house at the "Top of The Market" in 2005. You really sound like that person. I recall you planned to sit back and watch the market crash during 2006 to 2008 and then buy again at the bottom in 2009.

Also Info... The average Canadian will never consider buying property in the USA. I've known only three Canadian couples in the past 50 years who have bought property in the lower 48. I've known a few who have bought in Hawaii. I've known many who vacation in warm southern states as renters for the coldest 8 winter weeks. But it's a myth that a lot of Canadians want to buy in the USA.

StalJ said...

In other words you are picking your end date during the biggest bubble seen to that time and your beginning date still not recovered from the biggest bust ever.

I didn't pick either date - history did ;)
I purely looked up the historical bottom in interest rates (mid40s and the top (1980) to help answer I think it was Doug's question. He seemed to felt price growth couldn't outrun inflation if interest rates were to rise ,oh from say near zero like today to near 20% like 1980. By pointing out that it did, I'm not necessarily saying it will unfold the same way.

Leo S said...

I've known many who vacation in warm southern states as renters for the coldest 8 winter weeks. But it's a myth that a lot of Canadians want to buy in the USA.

Not true. There are dozens of sites to help Canadians buying just in Phoenix alone. Canadians are the number one group of out of state buyers there.

Bitterbear said...

Hello all

I recently contacted a listing agent about a condo at Mount Washington. within one minute of expressing an interest in seeing it, the price changed...up by 25000.

When I pointed this out to the agent, I was told that the seller would sell at the previously listed price now but would want an extra 25 grand if he had to carry it over the summer.

What does anyone make of that? An attempt to exert some pressure on me? A tactic to ensure full price? Maybe some remediation on the building over the summer? Anyone come across this before?

Marko said...

I recently contacted a listing agent about a condo at Mount Washington. within one minute of expressing an interest in seeing it, the price changed...up by 25000.

Where did you see the price change?

Bitterbear said...

The price change came over my email pcs account.

DavidL said...

A couple of years ago, a ski instructor told me that if you want to buy a property at Mount Washington at a reasonable price - you need to organize a private sale. Apparently there are two agents with ties to the resort owners who control almost all the listing. I'm told that they refuse to allow price drops for fear of the whole real estate market collapsing on the mountain. If the price on one property drops, then they may all drop! You need to find the owner, let them finish the term with the listing agent and then arrange a private sale.

I spend a week each spring break with my family at Mount Washington. We stay in the same suite at Deer Lodge each time. The suite has been listed for sale for 4 years, having increased by $10K this year to $249K. For that price, I can afford one month on the mountain (accommodation, lift passes, and everything included) for the next 30 years. By that time, I don't expect to be skiing any more! When factoring in strata fees and expenses, it's hard for me to imagine how owning at these prices can make any financial sense.

Bitterbear said...

DavidL

You must be in the penthouse! I wouldn't pay anything near that. For all the skiing we do and will do and considering minimal rental income, we would be paying a bit of a premium to own, but not by much. that's what's got me intrigued.

but not intrigued enough to put up with any shenanigans by RE agents. there's enough for sale that I can pick and choose. I bet if I knocked on almost any owner's door up there and offered them a reasonable price, they would sell!

caveat emptor said...

@ Bitterbear

Sounds mighty suspicious re the price change. Remediation and a big fat special assessment over summer could be a non-shady explanation. Barring that the owner would seem to be dreaming in colour if they think that they can get 25K more next year.

Majority of the properties there seem to be listed with Rick Gibson. I don't know anything good or bad about him, but DavidL is correct that he has ties with the resort management. Peter Gibson (his bro I believe?) runs the place.

There is LOTS for sale up there and much of it has been listed for an absurd amount of time (9 years on and off in one case!), so your strategy of contacting owners directly could work.

Get a good inspection! Places up there take a real beating with the sometimes ludicrous snow loads. Also some of the smaller older chalets are not even close to code.

On a purely financial basis I question owning up there. I hear it is tough filling rentals, some of the buildings have had some MASSIVE special assessments to repair snow damage, and condo fees are not to be sneezed at.

But if you have the money and love it up there then go for it.

patriotz said...

But it's a myth that a lot of Canadians want to buy in the USA.

Until a study by the University of Florida actually counted Canadians coming into the state each year, U.S. officials had only a notion of just how big the winter invasion of Canucks really was.

The study by the University’s Bureau of Economic and Business Research revealed that Florida’s five-million population over 55 swelled by more than a million people every winter, and 82 per cent of these snowbirds came from Canada.

Snowbirds

Granted not all of these are buyers. But the idea that Victoria (or even all of BC) is a more popular destination for Canadians than the US sunbelt is ridiculous.

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Phil said...

Kelowna looks to have turned the corner. The first two months of 2014 had the exact same number of residential sales (242) as 2013, but the average sale price is up $114,000. It climbed from 452,000 to 566,000 this year.

Al + TOH said...

Snowbirds normally have two seasonal homes (own or rent), that why they are called snowbirds.

Don't think anyone here is saying that there are more snowbirds in Victoria than in southern US states, but Victoria does have certain amount of snowbirds form other parts of Canada (there are one or two in our 13 houses street), especially considering our city and land sizes.

But snowbirds normally go to south only for winter vacations, how about their real home location in Canada? If they don't need to work and have sufficient funds, Victoria is probably a popular destination among Canadian "retirees". That is what we did (we do also own a condo in AZ), also is what we see and heard from our friends and relatives. Again, please take into consideration of our city and land sizes.

Remember our infamous nickname: a place for newly wed and near dead?
If we are not a reasonably popular tourist and retirement destination, where does the name come from? :=)

So all the things and everything is relative, no need to go overboard, even in argument.

Phil said...

Retirement locations of choice
An overwhelming majority of the respondents plan to stay in Canada
(85%), and only 5% plan to settle in the U.S., with Quebec residents
showing the highest tendency to do so. For the 5% planning to head
south of the border to retire, Florida and Arizona are still the most
popular choices.
If you are considering retirement in British Columbia, you are not alone.

Marko said...

,The price change came over my email pcs account.

There is usually a significant delay like one or two hours between my system and a PCS account so if it changed within a minute he probably changed it before you emailed him.

I have 20 to 30 listings depending on time of year so I get a lot of emails off realtor.ca on a weekly basis. The conversion rate is probably less than 2%; therefore, can't see any experienced REALTOR® changing a price because of an email inquiry.

Marko said...

A couple of years ago, a ski instructor told me that if you want to buy a property at Mount Washington at a reasonable price - you need to organize a private sale. Apparently there are two agents with ties to the resort owners who control almost all the listing. I'm told that they refuse to allow price drops for fear of the whole real estate market collapsing on the mountain. If the price on one property drops, then they may all drop! You need to find the owner, let them finish the term with the listing agent and then arrange a private sale.

I don't know if that makes much sense in my opinion.

I own a unit at the 834 (so I have an interest in the building) on Johnson and I've sold 11 of the last 14 condos there. The problem I have is getting owners to list realistically. Why on earth would I refuse a price drop if a condo isn't selling? To ensure I don't make a commission?

Whether a condo sells for $280,000 or $300,000 doesn't really impact the bottom line. The key is that it sells.

Sure, two agents have most of the listings up there but there are at least 3 other agents with listings up there. If one of those three drops the price the market price is set. Two alone cannot control the market when there are probably 100 substitutes you can choose from to list your property.

Bitterbear said...

Thanks Marko...I actually had inquired the day before about seeing A unit but did not specify which one. The unit I'm interested in was obviously a good deal.

The agent tells me there is nothing wrong with the building, no remediation or special assessments. The current owners apparently put the condo on at the higher price last year but dropped it a few months ago. According to their agent, they will increase the price next year because they expect prices to improve once the resort is sold.

caveat emptor said...


Whether a condo sells for $280,000 or $300,000 doesn't really impact the bottom line. The key is that it sells.


Well Marko you have neatly encapsulated one of the problems with real estate agents. I assume you would find $20,000 meaningful if you were selling your own home?

That's probably why research shows that agents list their own places for longer and sell for higher prices on average

caveat emptor said...

@Marko
I don't know if that makes much sense in my opinion.

Most likely you are right. But anti-competitive behaviour is a possibility if there is one person dominating the listings and that person has other interests than maximizing commissions

caveat emptor said...

"they expect prices to improve once the resort is sold"

Interesting, I wonder why they would expect that? I guess new deep-pocketed owners might provide some assurance of the continued viability of the resort. Supposedly the current owners will take bids this spring, although there is no assurance they will accept any of the bids.

Personally i would expect prices will go up when the economy improves and when there are a couple of good winters to make people forget the current one.

Marko said...

Well Marko you have neatly encapsulated one of the problems with real estate agents. I assume you would find $20,000 meaningful if you were selling your own home?

That's probably why research shows that agents list their own places for longer and sell for higher prices on average


That paper is from 2005.

Indeed, the authors find that when the public was beginning to use the Internet, from 1992 to 1995, the premium on agent-owned homes was 4.9 percent. By 1996 to 1999, as Internet usage was becoming widespread, the premium dropped to 3.2 percent.

2013/2014 stats would be more useful.

The listing agent/owner cannot dictate price anymore....the market dictates price especially in an age where information flows so freely. Sometimes I list properties that get sent out to 1500 PCS accounts. If the property is slightly below market value it gets snapped up right away. If it is above market value it won't move as each buyer can see another 50-350 listings in their PCS including sale prices.

I've seen many realtors overprice their personal homes and 6 months later they are still on market with a stale property. There is a huge risk to holding out for a better offers as some papers would suggest realtors are doing on their personal properties.

The point I was trying to make is if the market value of the property is $280,000 why would the listing agent hold out for $300,000? There isn't a significant commission benefit. If the property is really worth $300,000 it would sell for $300,000.

info said...

@ Al + TOH

"Don't think anyone here is saying that there are more snowbirds in Victoria than in southern US states but Victoria does have certain amount of snowbirds form other parts of Canada (there are one or two in our 13 houses street), especially considering our city and land sizes."

Again, you have failed to provide any data to substantiate your claim.

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

. .Percentage Price Increase / Decrease Since June 2010 .
. . . . . . . . . . . . . . .All Property Types . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .+ 15 %
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .+ . . . .+ 14 %. . Canada
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .+ 13 %
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .+ 12 %
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .+ 11 %
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .+ 10 %
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .+. . . . . . . . . . . . . + 9 %
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .+ 8 %
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .+ 7 %
. . . . . . . . . . . . . . . . . . .+. . . . . . . . . . . . . . . . . . . . . . . + 6 %
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .+ 5 %
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .+ 4 %
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .+ 3 %
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .+ 2 %
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .+ 1 %
+*. . . . . . . ..+. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 %
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .- 1 %
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .- 2 %
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .- 3 %
. . . . . . . . . . *. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..- 4 %
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . *. . . . . . . . . . . . ..- 5 %
. . . . . . . . . . . . . . . . . . . .*. . . . . . . . . . . . . . . . . . . . . . .- 6 %
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .- 7 %
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .*. . . . .- 8 %. .Greater Victoria
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .- 9 %
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .- 10 %
-----------------------------------------------------------------------------
June. . . . . Feb. . . . . . .Feb. . . . . . .Feb. . . . . . Feb. . . . . . .
2010. . . . 2011. . . . . .2012. . . . . .2013. . . . . .2014. . . . . . .

(Source: index)

Based on this data, house prices in Victoria peaked in June 2010 and have fallen 8.32% since that time. In contrast, house prices across Canada have increased by 14.02% over the same period of time.

Some regulars of this blog think that rising house prices across the rest of Canada will, somehow, result in higher house prices in Victoria.

This will not happen. If it was going to happen, it would have happened over the last year.

In Feb. 2013, house prices in Victoria were 5% below peak (June 2010) while house prices across the rest of Canada had increased by 25% since April 2009.

From Feb. 2013 to Feb. 2014, house prices in Victoria declined another 3.5% while house prices across Canada gained another 5% over the same period of time. Rising house prices across the rest of Canada did not result in higher house prices in Victoria over the last year.

Victoria’s falling housing market will not be rescued by buyers from Alberta or any other Canadian province. If it was going to happen, it would have happened over the course of the last 12 months, but it didn’t and won’t.

House prices in Victoria will continue to fall.

Jack and Cate said...

Phil said...

Kelowna looks to have turned the corner.

++++++++++++++

Not likely Phil. Kelowna sales were up 30 units vs last year, of which 13 million accounts for a few big sales. All this info is available if anyone looks hard enough. Kelowna and the Okanagan for that matter is still in a price spiral as is Victoria.

OMREB stats for February 2014

info said...

@ LeoM

"Also Info... The average Canadian will never consider buying property in the USA. I've known only three Canadian couples in the past 50 years who have bought property in the lower 48... But it's a myth that a lot of Canadians want to buy in the USA."

It's not too late to buy cheap property in the U.S. Sun Belt - Financial Post

"Florida real estate prices lure Canadians..."

"Canadian activity in the U.S. is impressive..."

Canadians' (25%) share leads all foreign purchasing of U.S. real estate.

From March 2011 to March 2012, Canadian purchasing accounted for approx. 2.2% of total U.S. real estate sales (dollars). That was for the entire country, but Canadian activity is concentrated in Florida, California, Arizona and Texas. Therefore, Canadian activity in these 4 states would have been significantly more than 2.2% of total real estate sales (dollars).


"The cars in a parking lot at Walmart in Hallandale Beach, near Fort Lauderdale, tell the tale. About 1 of out every 10 vehicles is from Canada. It's February; the weather is warm in Florida, so many are visiting tourists. But other Canadians are putting down roots."

"Canadians buying US Real Estate are enjoying the weather, and are especially impressed with the value of the homes. Many Canadians in Arizona tell me that the same homes that we find for $250,000 now would go for $750,000 in Canada."

"Popular Subdivisions For Canadians"

"We've been Specializing in helping Canadians buy/invest in Real Estate in Arizona for over 12 years!"

Testimonials

"Arizona realtor Diane Olson has become the go-to person for Canadians looking to purchase Phoenix vacation homes and investment real estate in sunny Arizona."

info said...

"Canadians make up a vast percentage of Scottsdale's seasonal residents, and a great deal more choose to spend their winters anywhere in the Valley. In fact, the Canada Arizona Business Council estimated around 872,000 Canadians that come to Arizona each year and spend hundreds of millions of dollars."

Arizona still draws snowbirds - despite price rebound - The Globe and Mail

Arizona for Canadians

DavidL said...

@caveat emptor
Supposedly the current owners will take bids this spring, although there is no assurance they will accept any of the bids.

I was told a few weeks ago that sealed bids need to be placed by April 1st with the current resort owners having the option to reject all or select one bid by April 15th. There appears to be at least three interested parties ...

info said...

@ patriotz

"... the idea that Victoria (or even all of BC) is a more popular destination for Canadians than the US sunbelt is ridiculous."

"Ridiculous" seems to be all the bulls have these days. For example, some bulls actually argued that Victoria's winter weather compares to the warm, sunny weather of the southern US.

Bulls have been attempting to take attention away from the facts:

- single family home sales have been in the tank since 2010

- house prices across Greater Victoria have declined about 10% since 2010 in a stimulated environment of emergency level interest rates

caveat emptor said...

"The exact number of Snowbirds heading to the U.S. each year is hard to calculate but if you define it as people 55 or over and spending 31 or more nights outside Canada, there were about 850,000 trips to the the United States in 2012."

from the FP

There are about 10 M Canadians over 55, so ballpark 8.5% of them choose to winter significant time in the US.

Probably some double counting there as the same person could do more than one month long trip per winter. Obviously not all of the 850 K own property there, though I am sure that many do. And of course there are some sub 55 Canadians that own US property as well.

Phil said...

Jack &Cate,
Are you disputing how much the average price is up over last year? My comment above was right out of the Kelowna paper. I agree you have to be careful with average prices, but something’s afoot in Kelowna. Even if it’s more ritzy stuff selling, the question becomes why? Check it out for yourself on page 8 in the OMREB stats if you don’t believe it. You can’t miss the yellow line towering over the others. It looks 30% higher than last year‘s ave price! It’s almost like an IQ test question - which one of these lines doesn’t belong?

http://www.omreb.com/files/02%20-%20CO%20Statistics%20Graphs%20February%202014.pdf

caveat emptor said...

@Phil

I don't follow the Okanagan at all, but from the graphs there it looks like inventory has tightened up quite significantly (even if it is still high in absolute terms)

LeoM said...

Info -- You disappoint me with your lack of facts to support your Arizona theory. The links you provided are just a few commercial websites that are being marketed to Canadians.

The US Census is the place for facts, not some trailer park sales website. Try this website instead:
http://www.census.gov

The US Census reports that about 13% of Arizona residents are foreign born and 62% of those are not American citizens. So that means 62% of 13% is left and that equals 8% might be foreigners. Only 4.6% of the foreign born residents entered the US after 2009. Also, only 4.4% of the foreign born residents came from Northern America (Canada??)but remember only 4.6% of foreign born residents became residents after 2009. The total Canadians is about 2,000 since 2009.

Arizona has about 6 million residents, you can do the other math.

Even if you take the grand total that ~might~ be Canadians residing in Arizona from any date, even at the extreme extrapolation you only get one-tenth of one percent of Canada's population.

I stand by my earlier statement that the average Canadian will never consider buying property in the USA; not even in trailer parks.

patriotz said...

LeoM, when the US census counts "residents", it means people who have their primary residence in the US, which excludes snowbirds by definition. They are just tourists. Whether or not they own RE.

patriotz said...

How an island dream can go wrong

Hat tip to Skook at VCI.

dasmo said...

"who is 73, bought the 1.3-acre property with wide-sweeping views of Active Pass in order to build a 4,000 square-foot house for himself and his wife"... on a remote island... Dementia had set in already I guess....

StalJ said...

From the Island Dream story..
"The whole economy everywhere is lousy – nothing is gangbusters

Haha ,except for oh say right across the channel where there's an economic boom starting.

Tonights CHEK News
12:20 mark
"Racing to keep up with demand to hire workers back from Alberta and get them on to the long list of projects breaking ground...a boom that hasn't been seen in years..."

LeoM said...

Patriotz.. I don't know how you define 'snow birds" or "tourists" but if you live in property you own in the USA you must participate in the Census ... It's the Law!!!
The US census goes to great lengths to gather information about 'Foreign-Born' individuals who are either permanent or temporary residents of the USA; legal or illegal. In fact the US Census Bureau has a special name for Canadians, they say we are from "Northern America" which they then qualify in footnotes as being predominately from Canada.

The information is at the Census website for anyone to read, in several places. Here is one general link:

It's the Law - Everyone must Participate!!!

I'm curious where you got your information from?

info said...

@ LeoM

"Info -- You disappoint me with your lack of facts to support your Arizona theory."

I didn't know that I had an "Arizona theory".

What exactly is my "Arizona theory"?

"The links you provided are just a few commercial websites that are being marketed to Canadians."

One of the links I provided was to this article from The Globe and Mail.

I provided another link to this article from the Financial Post.

The other links provide proof that many Canadians buy properties in Florida and Arizona (and the southern US in gerneral) as there are plenty of websites to help Canadians buy properties in those states.

Perhaps you missed this:

LeoM: "I've known many who vacation in warm southern states as renters for the coldest 8 winter weeks. But it's a myth that a lot of Canadians want to buy in the USA."

Leo S: "Not true. There are dozens of sites to help Canadians buying just in Phoenix alone. Canadians are the number one group of out of state buyers there."

One of my points was that out-of-town buyers have not and will not turn Victoria's declining housing market around.

Another one of my points was that Canadians prefer to buy vacation properties in the southern US where winters are warm and sunny.

"The US Census is the place for facts, not some trailer park sales website. Try this website instead:
http://www.census.gov"

The Globe and Mail and the Financial post do not qualify as "trailer park websites".

Perhaps it would help you to read and think more before you write.

"I stand by my earlier statement that the average Canadian will never consider buying property in the USA; not even in trailer parks."

I'm sure that thousands of average Canadians have bought properties in the US over the last 10 years. I personally know several average Canadians who have.

Let's go over this again.

It's not too late to buy cheap property in the U.S. Sun Belt - Financial Post

Quoting:

"Canadian activity in the U.S. is impressive..."

Canadians' (25%) share leads all foreign purchasing of U.S. real estate.

From March 2011 to March 2012, Canadian purchasing accounted for approx. 2.2% of total U.S. real estate sales (dollars). That was for the entire country, but Canadian activity is concentrated in Florida, California, Arizona and Texas. Therefore, Canadian activity in these 4 states would have been significantly more than 2.2% of total real estate sales (dollars).

Canada's population is only one tenth of that of the United States, yet Canadians' share of US residential real estate sales (in dollars) was over 2% . That is a huge number, considering Canada's relatively small population.

Panama's population is about one tenth of that of Canada's. If Canadian property sales to Panamanians was approx. 2% of total sales, we would have to conclude that there was plenty of buying activity from Panamanians.

caveat emptor said...

Clearly lots and lots of "ordinary" Canadians buy second homes in the US. I haven't seen an exact number for Canadians that own RE in the US, but from some individual state numbers I would guess that up to 1,000,000 Canadians are part of a census family that owns US real estate. Does anyone have better numbers? If my guess is approximately true then ballpark 3% of Canadians own US real estate.

However most of these people are not "average" Canadians. The average Canadian census family has total income in the mid 70Ks and the average Canadian not part of a census family has income in the mid 20Ks. Neither of these incomes are likely to support a second home in the US (or for that matter retirement to Victoria!)

Canadian ownership of US property is tilted strongly to the upper class and the upper middle class. If having a second home in the US seems totally "average" to you it may just mean that most of your friends are upper middle class.

Just like living in Oak Bay might gradually condition you to believe that sending your kids to private school is a totally normal and advisable thing to do.

caveat emptor said...

It's not too late to buy cheap property in the U.S. Sun Belt - Financial Post.

Since that article was written at the beginning of 2013 Florida real estate has gone up by nearly 15% and the Canadian dollar has fallen from just above par to 10 cents below.

It may still be cheap, but it's not quite the screaming deal it was.

LeoM said...

Info - You know you can't trust newspapers any more than you can trust trailer park sales websites. What is you aversion to fact based websites? I'll say it again; check the US Census site for facts on your theory.

A ten second Google search gave me this reading material for you. I don't know anything about your math skills, but this document and basic math skills should help you prove or disprove your theory for the entire USA.

https://www.census.gov/prod/2012pubs/acs-19.pdf