It starts with the title, "March 2014 Real Estate Activity in Victoria". That's so boring I could have written it. What happened to "Spring Market Rebounds in Victoria?" or "Buyers Frothing at the Mouth for Your Home"? After all, sales are up almost 20% from last year. It's here I would point out the problem with that comparison, but Tim has thought ahead; so I'm reduced to a lame "what he said".
However, the average sales for the month of March over the past five years is 607 properties per month, so though 2014 is stronger than the year previous, sales have not yet returned to the longer term averagePrices are flat according to the MLS HPI, and the market according to Tim is balanced. "There is no extreme upward or downward pressure on housing prices right now". Sure enough, the data agrees.
MOI of 7 is a bit less than the March of the last 3 years, but still on the high side of a balanced market.
Sales to list is again stronger than the last years, but not strong.
I like the yearly data because it flattens out all the seasonality and minor price movements. And something unusual is happening. Whether due to sales mix changes or actual price increases, the yearly median price has gone up for a few months now. That hasn't happened since the last peak in 2010.
$5000 isn't much, but it's a break from the multi-year trend we've seen. However, as Just Jack says, if you really want to know what's going on, you have to look at the segment of the market you're interested in.
111 comments:
This report figures Victoria will lead the country in 2015. That would be something - from laggard to leader.
http://business.financialpost.com/2014/04/02/condo-market-outlook/
Prices are forecast to pick up in 2015 but even the strongest market in Victoria will only see 4% price gains. Toronto is forecast to be the weakest market by 2015 with only a 1.7% price gain.
5 reasons why the housing market is not like the stock market.
1. It cost nothing after the purchase to own a stock. It costs money to own and hold a house.
2. Stock indexes are a very small Collection of stocks that changes as it suites the index. A picture of only that collection but giving you some sense of market performance. House price indexes are all houses of certain categories in certain areas over certain times. A snapshot of the overall sales activity in your area.
3. Stocks are extremely liquid. Selling and buying is instant and cheap. Buying and selling a house takes time and is expensive.
4. Metrics, news and data is available by the boat loads to evaluate the value of individual stocks. little information is available on individual homes to gauge their value.
5. Market value of stocks is almost instantly available since they are being bought and sold in high volumes at all times and this data is fed to you in real time. You only know the true value of your house when you sell it.
Industries Seeing Largest, Smallest Wage Gains, According To StatsCan
"Wages in real estate, rental and leasing jumped a massive 12.2 per cent in the year to January, StatsCan reported this week."
"That may change if the much-debated and possibly nonexistent housing bubble ever bursts, but for now, workers in the sector are seeing the country’s biggest pay hikes."
Housing related industries painting another beautiful picture of our terrible economy.
In other news our East Sooke friends are still on the hunt for some executives to rent their house.
The wording has now changed. They are now saying that they would accept a small family OR an executive. Note how they have removed the reverent capital 'E' from "executive". Perhaps "Executive" refers to an upper echelon employee while "executive" could just mean an junior executive or upper level manager.
The price is now down by $600 from the original ridiculous price offering.
They've also removed the "won't last long". It has and it will.
Ideal for small family or executives
I read that Financial Post article about CMHC forecasting a 4% increase in Condo prices.
A 4% increase is not unreasonable but I think you might be mislead into believing that if you bought a condo today by this time next year it will be worth 4% more.
I think developers will likely be getting 4% or more for their units. But those who bought will not. The gap between never lived in condos and pre-owned condos will just widen.
Putting it another way. If you went out and bought a condo today from a developer, it's my opinion that if you had to sell one year from now, you'll sell for less than your purchase price.
And I don't think that will change much in the next several years. The condo market is acting more like the used car market than the detached home market. Every year the suite gets older the gap between new and pre-owned gets larger.
That could be due to who is buying new condos these days. If you're down sizing from a house to a condo, you'll probably console yourself and justify that decision to your friends by buying new.
"Oh, Edith and Bob sold their house and HAD to buy a condominium"
versus
"Oh, Edith and Bob sold their house and bought a NEW condominium."
rent vs own in Vancouver
http://www.vancouversun.com/business/Barbara+Yaffe+Rising+cost+Vancouver+houses+means+worthwhile+rent/9683256/story.html
1. It cost nothing after the purchase to own a stock. It costs money to own and hold a house.
Also a house has a roof and windows, while a stock does not.
2. Stock indexes are a very small Collection of stocks that changes as it suites the index. A picture of only that collection but giving you some sense of market performance. House price indexes are all houses of certain categories in certain areas over certain times. A snapshot of the overall sales activity in your area.
How is that a difference? There are indices of all sorts in both markets. Global to track a larger market, or more focused to track a subset. Just like the national house price index tracks Canadian prices, while the MLS HPI you can dig down to one region and one house type.
3. Stocks are extremely liquid. Selling and buying is instant and cheap. Buying and selling a house takes time and is expensive.
No, it's just a difference of degree. Selling stocks is instant only if you are selling a small number relative to the daily trading volume. Houses just have low sales volume and higher transaction fees. They are not fundamentally different. You can sell a house within hours if you price it right.
4. Metrics, news and data is available by the boat loads to evaluate the value of individual stocks. little information is available on individual homes to gauge their value.
Agreed, more data would be better. However like you say it's just a matter of sales volume. There is no fundamental difference between houses and stocks in this respect, it's just that higher sales volume means less uncertainty.
We know you've bought a house Leo but have you bought stocks?
@ Leo S
"I like the yearly data because it flattens out all the seasonality and minor price movements."
Yearly average and median price data smooths out the major tops and bottoms too much. In a significantly falling market (eg. Victoria), yearly average and median data gives a false impression of stable prices.
I'm quite sure you were a first-time buyer about a year ago. In a falling market, yearly average and median data is preferred by those who bought near the peak of a deflating housing bubble and those who work in the housing industry.
Below are examples of recent SFH price drops for Victoria, Calgary and Toronto. Let’s look at how the yearly average price drop compares to the R/E board index price drop in each case.
Toronto (2008 high to 2009 low):
Yearly average price drop: -0.5%
Index price drop: -7.7%
Calgary (07 high to 09 low):
Yearly average price drop: -6.3%
Index price drop: -16.9%
Victoria (08 high to 09 low):
Yearly average price drop: -0.5%
Index price drop: -9.6%
Victoria (10 high to 13 low):
Yearly average price drop: -5.0%
Index price drop: -11.0%.
In each case, the yearly average price drop was much smaller than the index price drop.
(Sources: index, website)
@ Leo S
"And something unusual is happening. Whether due to sales mix changes or actual price increases, the yearly median price has gone up for a few months now. That hasn't happened since the last peak in 2010."
It was almost exactly one year ago that there was a major shift in the sales mix in Victoria. One year ago, the ratio of sales in the expensive areas compared to sales in the less expensive areas increased dramatically.
The yearly median data, which is made up of 12 months of (upward skewed) monthly median data, has also been significantly skewed upward, giving a false impression of stable prices.
. . .Percentage Price Decline From Peak (3-month median) . .
. . . . . . . . . . . . . . .Single Family Homes. . . . . . . . . . . . . . . . .
. . . . . . . Oak Bay, Saanich East and North Saanich . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . .0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 0.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 1.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 1.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 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.. D.
. . . . . . . . . . . . .2012. . . /. . . . . . . . 2013. . . . . . . . . . . . . . . .
(Source: board)
3-month median data is useful, however, it is no longer available.
Stock indexes are a very small Collection of stocks that changes as it suites the index.
They are not very small in terms of market cap, and in any case there are indexes that cover the whole market.
House price indexes are all houses of certain categories in certain areas over certain times.
No, just the ones that sell. They are just guessing about the rest. As opposed to stocks, which are always selling - at least those which comprise 99% of market cap.
I'm quite sure you were a first-time buyer about a year ago. In a falling market, yearly average and median data is preferred by those who bought near the peak of a deflating housing bubble
Accusing Leo of wanting to look at only the statistics that support his decision to buy a home seems a bit ridiculous. Over the last year just about every relevant metric has been posted (medians, averages, Teranet, HPI, MOI, etc etc) on time scales from annual to monthly.
giving a false impression of stable prices.
The HPI also seems to support roughly stable prices over last 12 months.
"No, just the ones that sell. They are just guessing about the rest. As opposed to stocks, which are always selling - at least those which comprise 99% of market cap."
Exactly! I forgot to add "the ones that sell"...
True, the composite indexes cover an overall exchanges performance but even those are "rule based" so not as straight forward as sales data being entered in and aggregated.
I don't really get the resistance to accepting that real estate investing is categorically different than investing in equities. No convincing rebuttal that's for sure. I guess it's just too painful to admit that Dasmo is right... again.
There are 217 homes listed for $1,000,000 and more in the Capital Area. On average for all of the last 12 months some 17 of those listed for a million and more sold each month. At a median price of $1,305,000.
The average exposure is 84 days on the market. However, when you consider the agents' practice of re-listing to "freshen up" the listing, the average time to sell a million plus homes is likely around the 6 month mark.
While there have been some purchases over the decades in excess of $5,000,000 it is highly unlikely that there is a residential property anywhere in the Capital Area that would sell today for more than $5,000,000.
In my opinion, when it comes to million dollar homes the marketplace seems to have rolled back to 2004 price levels.
$5,000,000 seems to be our market cap. If you're spending more than $5 mill on a home today - you're simply not looking to live in Victoria.
>> We know you've bought a house Leo but have you bought stocks?
Of course. Which part do you think is not accurate?
By the way, my Cash Store Financial shares quickly become very illiquid when trading was suspended on them.
It was almost exactly one year ago that there was a major shift in the sales mix in Victoria. One year ago, the ratio of sales in the expensive areas compared to sales in the less expensive areas increased dramatically.
You don't have to tell me, I wrote that article :)
I don't have any recent per-region data so I don't know what the skew is currently. Koozdra was extracting that data but then they changed the report format.
In a significantly falling market (eg. Victoria), yearly average and median data gives a false impression of stable prices.
Teranet is flat, MLS HPI is flat, and median/average prices are flat. It wasn't flat a couple months ago, and may not be flat next month, but currently it is.
There is no one truth about prices. All you have are various different measures of it, with varying levels of specificity and stability.
I'm quite sure you were a first-time buyer about a year ago.
Indeed. May 2013.
In a falling market, yearly average and median data is preferred by those who bought near the peak of a deflating housing bubble and those who work in the housing industry.
And yet I posted other measures as well. Must be my other personality :)
In each case, the yearly average price drop was much smaller than the index price drop.
There is a big difference between yearly price data, and a one year rolling average. Yearly price data reduces the market to one snapshot every year and can miss the bottom. Rolling average means you get data every month. Yes it lags the market, and yes it smoothes some interesting data, but it works well in addition to the other measures because it is not influenced by seasonality and shows the larger trend. The real estate market is a slow moving beast.
I don't really get the resistance to accepting that real estate investing is categorically different than investing in equities.
It is different, it is not fundamentally different. There's a difference :)
As Illiquid as my liquid audio shares that evaporated? Sometimes being right doesn't matter when others don't see it ;-)
Just Jack, thanks for this snapshot...
-----------------
Just Jack said...
There are 217 homes listed for $1,000,000 and more in the Capital Area. On average...
-----------------
JJ - could you provide the same snapshot of information for SFH in the Capital Area in the following two categories:
1. lowest price range SFH; under $500,000 in the Capital Area
2. SFH on the southern fringe of the Capital Area; south of Fort St/Oak Bay Ave down to the water? This will include James Bay, South Fairfield, and South Oak Bay and be in the price range of $500,000 to $1,000,000.
There are 115 homes listed for $500,000 and less in the Capital Area. On average for all of the last 12 months some 43 of those listed for $500,000 and less sold each month. At a median price of $430,000.
The average exposure is 50 days on the market.
While there have been some purchases over the decades less than $275,000 it is highly unlikely that there is an improved urban property that could be used as a future building lot anywhere in the Capital Area that would sell for less than $275,000.
$300,000 seems to be the price floor. If you're intending to spend less than $300,000 in Victoria, you would have to be looking at older condos or town homes.
Canadian housing data dangerously incomplete, CIBC warns
"The short answer to those and many other questions is that we simply don't know," Tal says. "The gap between the importance of the real-estate market to the economy and the lack of publicly available information on it is mind-boggling."
...
"But the dearth of information is bad in a number of ways, he warns. It causes people to form opinions on the overall market based on evidence they can pull together from anecdotal snapshots — and the picture that paints isn't always a pretty one."
Ignorance is bliss.
Re: Complaining of incomplete data
Sort of what this blog has been saying for years.
Tim, hire Marko and together you two can change VREB stats policy and info dump the graph makers over here :)
Dave3
Well, if making requests of JJ is ok:
What I'd love is an understanding of what is happening in SFH for homes that would have sold in the $700,000 to $1,000,000 range in say, 2010, now that many houses that were priced over a million have had their prices reduced to under a million? I'm not sure that what I would expect to see happen (price competition from better homes pushing others down the price ladder) is actually happening.
I'm mostly interested in acreages in Central and North Saanich, but I'll take any SFH info you want to throw out there.
There was a sold sign on 2714 Lincoln Road yestderday, just one day after the for sale sign went up. Does anyone happen to know the sale price?
When the housing bubble bursts, there won’t be a soft landing
"Although Canadians witnessed this carnage from a front-row seat, many want to believe that Canada’s housing sector will follow a gentler path when it corrects, labeled by economists as a “soft landing”. Canadian lenders, homeowners with mortgages, politicians, construction workers, Toronto condo developers and real estate speculators hope that these people are right."
RE 2714 Lincoln Road. I'll bet 50 bucks a developer bought it....
Renter, I'll have to think about your question as I'm not to sure what you're asking. I think you're question is about price compression in the upper middle income market. That you are wondering if there may be a domino effect from the million plus upper income market pushing down the upper middle income market?
As for acreage. It's not the size of the land so much - its what is useable. 10 acres of level grassland is worth a lot more than 10 acres with 5 in trees and an irrigation pond. In that case you would have to give me a specific property to work on. You probably wouldn't want to do that on a public blog. Maybe later I'll provide a link for those that want more privacy in the answer to a question about a property they may be thinking of purchasing.
Victoria real estate is extremely overvalued.
Lax lending standards (starting in 2000) and emergency level interest rates (since 2009) have fueled Victoria’s housing bubble.
Since 2000, house prices in Victoria have more than doubled, dwarfing any increases in incomes and rents. In other words, house prices in Victoria have become detached from underlying fundamentals (incomes and rents).
By 2006, house prices in many US cities had become detached from underlying fundamentals (incomes and rents). The consequence was predictable – a deep, multi-year price correction. House prices in cities such as Los Angeles, San Diego, Phoenix, Las Vegas and Miami (all bubble markets in 2006) corrected back to a level where underlying fundamentals (incomes and rents) were, once again, able to provide price support.
The same will happen in Victoria and across the rest of Canada.
Let’s look at an example from the US:
This 4 bed, 3 bath, 1938 sq. ft. West Palm Beach, Florida house was built in 2004.
Value in 2006: $375 K
Value in 2011: $119 K
Current value: $200 K
A comparable house in Victoria (with at least 1900 sq. ft. of (above ground) primary living space, 4 beds, 3 baths, 2004 or newer) would probably cost $700 K or more.
By 2006, house prices in West Palm Beach Florida had become detached from underlying fundamentals (incomes and rents). Inevitably, house prices in that city experienced a deep, multi-year price correction. House prices declined until incomes and rents were, once again, able to provide price support.
Housing bubbles always deflate. It isn’t different in Victoria.
RE 2714 Lincoln Road. I'll bet 50 bucks a developer bought it....
This is the second house within a very small area of Oak Bay sold this year without, apparently, a publicly available record by VREB of the transaction.
Suggests serious holes in VREB's coverage of the market.
I'll give your question a try Renter.
Back in 2010, the market for houses in the Saanich Peninsula on 1 acre or less was much stronger than it is today. There were about 68 sales of homes in the 700 to 1 mill range back then. In the last 12 months there have only been about 37.
Relative to the assessed values these properties back in 2010 were selling over their assessed value at 108%. Today they are still selling over their assessed value but at 102.7%. Hypothetically speaking if you were looking at the typical upper middle income Saanich Peninsula house in 2010, that same house would be about 5% cheaper today.
That is a very broad statement with lots of problems when you are using price as one of the parameters when trying to solve for price. Now if you had an example of a house style, age, house size, lot size, neighborhood then I would have a more reliable answer for you.
RE 2714 Lincoln Road. I'm sure Abstract developments has an inside track. I predict this place gets carved up into small lots or at least two regular lots.
This house in Arbutus has an open house on saturday. I see they have just dropped the price $8 after only six days on the market!
I guess the point is to keep the listing popping up so that buyers notice. However, I would have thought it would look a little better if they gave a slightly bigger price drop.
http://beta.realtor.ca/propertyDetails.aspx?PropertyId=14224251
Suggests serious holes in VREB's coverage of the market.
2714 Lincoln Rd was listed on MLS® for $849,900 and it sold for $861,000.
Sorry, no holes on this one.
Thanks, JJ! My feeling was that there wasn't very much change, so 5% makes sense to me.
Much appreciated!
Re: holes
Thanks, Marko
"I guess the point is to keep the listing popping up so that buyers notice. However, I would have thought it would look a little better if they gave a slightly bigger price drop."
S-J,
Did you notice the "888" at the end of the new price? Based on the number of people on the open house and how many of them are oriental, the $8 price change is probably to get the triple lucky number of 888, not a real drop.
We were there on Sat, as the house looked a bit MCM. It has reasonably good reno by a flipper (4 or 5 months), but not very grand. The full ocean view on both floors is the real killer.
The data listing service shows that the property was listed for 1 day. But most likely the real estate company had the property listed exclusively since the middle of February.
If you want to buy in this area, it may be a good idea to look and see which company is doing the most business in that area. Then meet with one of the agents and have them email you any exclusive listings they might get.
There is no reason why the agents have to list on the real estate board's data service. Especially when the market is very active. The agent can hold the property as an exclusive for a few weeks. Listing after an offer is accepted means the agent might get one more sale recognized towards a top producer award from the board.
Listing after an offer is accepted ...
Is that considered ethical?
Listing after an offer is accepted ...
Is that considered ethical?
The data listing service shows that the property was listed for 1 day. But most likely the real estate company had the property listed exclusively since the middle of February.
I doubt it as showing instructions for realtors were to go and show the property without an appointment (common for vacant homes) the day it was listed. If they already had an accepted offer on it previously they wouldn't want showings. They would have written "accepted offer," or something similar in the realtor notes.
What likely happened is someone showed up that day, thought it was a good buy, bid over asking and likely made it unconditional to secure it right away. It happens from time to time on desirable properties. If you don't mind risk and you want a super strong offer you make it unconditional.
Exclusive listing contracts are very rare in this day and age.
Is that considered ethical?
Why would it be considered unethical reporting a sale that has occurred?
Why would it be considered unethical reporting a sale that has occurred?
I did not suggest that it was. What I said was:
"Listing after an offer is accepted ...
Is that considered ethical?"
Where by "listing" I assumed Just Jack referred to listing on the multiple listing website, which is where it appeared.
You just don't see places being listed if they have an accepted offer (and aren't already on MLS®) but you do see accepted offers that go unconditional being reported if they weren't on MLS®. Happens in a variety of scenarios. For example, property is listed for 90 days at 600k. Buyer offers 550k on day 60 and seller says no, 575k is my bottom. Listing expires after 90 days and buyer comes back after to buy the home. Listing realtor reports that sale even thought the listing might not be on MLS® at the time of the deal coming together.
Following on from Koozdra’s link to CIBC’s report “Flying Blind” in the real estate market, Garth is also talking about it today, and uses Victoria as an example.
After reading Garth, I clicked on my PCS account and found a “New” listing: 624 St. Patrick Street at $798,000. Or, should I say relisted. I believe it originally started at $859,000, then dropped to $839,000, but I could be wrong, as I can’t recall the exact numbers, or how long it was listed for. The previous listing has disappeared in a puff of smoke! Poof!
It really is time that real estate boards give buyers/sellers all the data they need to be able to make a much more informed decision on probably the biggest purchase/sale of their lives.
There is a Canadian website that does includes more data on real estate. It’s called “Viewpoint”, but unfortunately, it only operates in Nova Scotia. They give you new listings, price changes, days on the market. If you look under the “Sales History”, they show all the previous sold prices for the property (going back years), plus all the expired listings. If someone in N.S. can do it, then why can’t all Provinces? You just need to register to take a look: www.viewpoint.ca
If only Zillow was allowed into Canada!
“BC saw the biggest monthly job gain in the country, with over 18,000 positions added. It also saw the biggest drop in its unemployment rate; it fell by 6-10ths of a percentage point in one month to 5.8 per cent. That unemployment rate is actually not that far above Alberta’s now.”
http://www.news1130.com/2014/04/04/bc-is-the-standout-province-in-march-jobs-report/
JustJack - thanks for the additional snapshot. Your comment: ---
"the typical upper middle income Saanich Peninsula house in 2010, that same house would be about 5% cheaper today" ---
got me thinking...
It seems that the majority of people on this blog want three statistics:
1. the SFH decline from peak price, and
2. the SFH decline since 12 months ago.
3. the price adjustment in the past few months relative to the most current BC Assessment valuation
The BC Assessment valuation has been declining for three years, so comparing today's selling price to only today's assessment just tells me the price adjustment in the past few months.
To get an accurate reading we need to compare today's selling price to the last four valuations from BC Assessment.
I think the average assessment has declined about 3% per year for each of the past three years. I can't see that "Saanich Peninsula" property only declining 5% from peak; I would think it's off about double that, closer to 10% from my observations.
Your Thoughts?
Following on from Koozdra’s link to CIBC’s report “Flying Blind” in the real estate market, Garth is also talking about it today, and uses Victoria as an example.
A truly terrible article though. First he pretends not to understand what an index is, then he claims average prices are no longer published which isn't true. He also presents the fact that the main press release does not mention the average price as somehow sinister. Well a year ago March the average was $583,000 and last month it was $632,000. But that doesn't fit the narrative of the evil real estate board trying to hide a price decline, so of course it doesn't get mentioned.
You can't blame Garth. He is selling too and running out of new content... I still find his blog entertaining to skim. Mostly because I find his story interesting and kinda like his rebellious nature. I don't find anything on his blog too educational though. This blog is much more informative...
(BC's) unemployment rate is actually not that far above Alberta’s now.
Yeah OK. So what are the stats that really matter, the full-time employment rates for Alberta and BC?
You can't compare todays median with the median of different years of assessments because that past assessment data for the enitre or selected marketplace is not available.
So you're left with comparing the current sale price median/2014 assessment median to the sale price median say in 2010 / 2014 assessment median. In that way you can determine the increase relative to the current assessments.
Patriotz, you're almost there. I added one important word.
the stats that really matter, the full-time employment change
It's always the rate of change that matters most. Sure its only 1 month so far, but any way you slice it, was a good month for BC and potentiailly start of positive trend after miserable years.
Full-time employment rate % change Feb to Mar:
ON -0.1%
MN -0.1%
SK -1.4%
AB -0.1%
BC +0.6%
Here's what that translates into for net full-time jobs in Mar:
ON -6500
MN -300
SK -6600
AB -1500
BC +10300
Thanks JustJack for your comments. I've tried to get detailed historical assessed value but I couldn't get it either; so I use my own custom formula to estimate an approximate selling price based on information and past assessments that I have saved in Excel. It's not perfect but it helps me estimate the current market trends for specific property types, without using medians and averages which I find inaccurate for anything but medians and averages. For example, a specific property type, in a selected neighbourhood will behave differently than averages and medians for greater Victoria. Some neighbourhood houses of a specific type will out-perform the averages and medians, others will under-perform, while others will closely track the medians and averages.
For example; the following scenario closely approximates two neighbourhoods that I track (-3% is my forecast for 2014):
Year Percent change over preceding year Selling Price
2014..........................-3%...............................$550,000
2013..........................-3%...............................$566,500
2012……………......-3%...............................$583,495
2011..........................-3%...............................$601,000
2010...........................4%...............................$619,030
2009...........................6%...............................$594,269
2008...........................7%...............................$558,613
2007…………….....10%...............................$519,510
2006...........................5%...............................$467,559
2005.........................15%...............................$444,181
2004.........................20%...............................$377,554
2003.........................15%...............................$302,043
2002.........................15%...............................$256,736
2001...........................3%...............................$218,226
2000...............................................................$211,679
This neighbourhood is obviously not in the Oak Bay Estevan village area!!!
Ed Clark ‘supportive’ of Finance Minister Joe Oliver’s hands-off approach in mortgage wars
Hands off?
How about this? Change the maximum insurable amount by the CMHC to $500,000. To put this into perspective this would only apply to FIRST TIME HOME BUYERS. First time home buyers that would still be able to buy their first half million dollar home with as little as $25,000. Hell, they can even borrow that amount.
No, the "experts" would say, this would crash the market. The housing market NEEDS first time home buyers to be able to buy MILLION DOLLAR HOMES with less than 20% down. We NEED the government to provide insurance on those loans. Hands off... pfffff...
Last month there was the same number of home sales in Sooke as there was in Oak Bay. That number was 19.
Besides Oak Bay's Mediterranean climate what are the quantifiable differences between the two.
In Sooke there are 195 houses for sale. In Oak Bay there are 104
In Oak Bay, the typical home is 2,800 square feet on a 10,000 square foot lot that is listed at $1,100,000.
In Sooke, the typical home is 2,100 square feet situated on at 19,500 square foot lot that is listed at $449,900.
Quantifiable physical differences between the two hoods are only minor. But unquantifiable psychological differences are immense.
Most of the value of real estate is unquantifiable emotion. And that's fine as long as the real estate industry can keep that emotion going.
I think the oak bay effect is more about birds of a feather than emotion. Living next to other rich people is quantifiable. It's also has a much nicer village than Sooke, close to Victoria, hospital, theatre, airport etc. You can't leave your beaten down RV in the front yard though, but you can't have it all....
https://ca.finance.yahoo.com/news/priced-out-cant-afford-a-home-in-my-town-150643828.html
If only they could buy with 5% down like people can here. For some reason they laugh at that kind of thing down there.
(BC's) unemployment rate is actually not that far above Alberta’s now.
-----------------------------------
Stats are like opinions, anyone can create one. Nanaimo officially has a less than 5% unemployment rate. GT Global Hiring in Nanaimo at their workshops sets it at over 9.8% so who is closer to the truth? Gov't hacks or those who have to find jobs for the unemployed..... go figure.
Knowing housing sales are up 59% compared to last year, Im going to go with the govt hacks on this one.
http://www.nanaimodailynews.com/news/nanaimo-region/number-of-housing-sales-deals-in-nanaimo-soar-59-per-cent-compared-to-one-year-ago-1.942432
"Job market in Victoria? it's fine" -Old people
McDonald's accused of favouring foreign workers
"McDonald’s confirmed the three Victoria locations have 26 temporary foreign workers on staff. Christ said that out of 11 of those who work at his store, seven came in recent weeks.
Tim Turcot is a 21-year-old local resident who said he applied to work there during the same period. He wasn’t hired, despite his four years of restaurant experience."
Nanaimo officially has a less than 5% unemployment rate.
Just look at the employment rate instead.
Monday, April 7, 2014 8:00am
MTD April
2014 2013
Net Unconditional Sales: 108 615
New Listings: 338 1,408
Active Listings: 4,087 4,585
Please Note
Left Column: stats so far this month
Right Column: stats for the entire month from last year
What is happening with house prices in the Saanich East areas of Gordon Head, Lambrick Park and Mount Doug?
Within my criteria of min 3 beds and 2baths, priced between $375-725K, (was $375-$750K in 2012, & 2013),avg sale prices were:
2012: (Oct-Dec) $590K
2013: $589K
2014: so far $608K
From this info, I would say Leo is doing fine right now.
What is happening with house prices in the Saanich East areas of Gordon Head, Lambrick Park and Mount Doug?
Within my criteria of min 3 beds and 2baths, priced between $375-725K, (was $375-$750K in 2012, & 2013),avg sale prices were:
2012: (Oct-Dec) $590K
2013: $589K
2014: so far $608K
From this info, I would say Leo is doing fine right now.
That's quite a wide range of properties for the Gordon Head, Lambrick Park and Mount Doug areas.
The house could be as small as 1,400 square feet or as large as 3,800 square feet. The lot as small as 6,000 or as large as 23,000 square feet. And built between 1930 to now. All of these homes are 3 bed, 2 bath and in your price range.
Surely not all of these homes would fit your criteria?
We have an interesting market. Mortgage brokers are complaining that with the rules implemented in B-20 it's much harder to qualify first time buyers. We are also seeing much more activity and rising prices.
How much longer before we burn out our move up buyers?
The word to describe this market is "frothy".
The first thing when looking for a home is to select your neighborhood.
Then house and lot size.
Having a 23,000 square foot lot would be nice, but is it realistic? For some people they are specifically looking for big lots. If that isn't your desire why not limit your lot size to something realistic. Say 5,000 to 10,000 square feet.
The same with a 1,400 or 3,800 square foot house. 1,400 may be too cramped for a large family and 3,800 square too much to clean. If the homes that you are being drawn to are around 2,200 square feet why not limit the house size from 1,700 to 2,700 square feet. That's going to give you lots of range.
When the house was built is not as important as condition. Yet Every decade or so does have a style. Maybe you are drawn to character homes, or basement entry homes where there may be a suite, or three level split designs.
If you have been looking to buy a property, after viewing a couple of dozen you're going to become more selective. That 1,400 or 3,800 square foot may be crossed off your list right away without going to take a look at it.
When you're looking at listings in Gordon Head, Lambrick and Mount Doug that match a specific price range that can cause a bit of disappointment.
As everything you seem to be looking at is very expensive or doesn't meet your desires. That's because you're looking at asking prices and not sale prices. If the property has just been listed - the asking price can be outlandish. That is going to frustrate the hell out of you.
For example given that price limitation the typical asking price in those hoods is $594,500. This asking price gets you a 2,300 square foot home on a 6,400 square foot lot.
Yet the typical sale price is $562,500 for that same property. Most likely you will never get the information that you'll need when looking at homes to buy. That information would be what homes that meet your parameters in your neighborhood are currently selling for - not what they are asking. You want the highs, the lows and the typical sale price for that specific home in that specific hood. You also want to know if the market is favoring the seller or favoring you the buyer.
You want all of this...
BEFORE - you make an offer.
And you want this information from someone who is not trying to sell you a house or that may have some interest in the outcome.
To the best of my knowledge, that personalized service does not exist anywhere in the world. That leaves you to educate yourself with incomplete information. This blogg is one of the best places, I know of, to start.
SFH (12 month) median data for Greater Victoria:
March 2014: $531 K
March 2013: $529 K
This data is misleading. A significant change in the sales mix has skewed the March 2014 12-month median upward.
Here's how:
Expensive group of areas: Oak Bay, Saanich East and North Saanich
Less expensive group: Sidney, Esquimalt, Coldwood, Langford and Sooke.
From March 2012 to March 2013:
(expensive SFH sales) / (less expensive SFH sales)
= 1.031
From March 2013 to March 2014:
expensive / less expensive
= 1.135
That's an increase of 10%.
The ratio of expensive sales to less expensive sales has increased by 10% over the past year. This has skewed the 12-month SFH median upward.
If there had been no significant change in the sales mix, the 12-month SFH median for March 2014 would have been lower than March 2013.
. .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, the price decline from Feb. 2013 to Feb. 2014 was 3.4%.
If March 2014's index level increases (month-over-month) it will probably result in a slight year-over year increase.
Don't get too excited if that happens bulls. Feb. 2013's index level was higher than Feb. 2012's level by 0.7%. However, that was followed by a 3.4% drop from Feb. 2013 to Feb. 2014.
Overall, Canada's housing market (including Victoria) is extremely overvalued and will experience a deep, multi-year price correction.
Prices always revert to their long-term mean. It isn't different in Canada.
>> To the best of my knowledge, that personalized service does not exist anywhere in the world.
An opportunity exists then. However if, as you said, they also want to pay only $49 for that info, then maybe it's not worth pursuing the endeavour.
At $99 it becomes somewhat more interesting if you really streamlined the report generation process.
@JustJack. Send me an email if you're interested in chatting about that idea some more. Could be an interesting project.. leo.hhv@gmail.com
More than the figures I love to read comments of you all.
Murrieta-Propertymanagement
Contractor for the new Johnson street bridge says, bridge will cost $7.9 million extra and take 5+ months longer to complete.
Mayor Fortin is insisting they have a fixed-price contract.
I think it's time for a, CAGEMATCH.
Johnson St. bridge contractor says more money and time needed
@ Seth
I assume any cost over runs will flow straight to Victoria as the federal contribution is fixed. The city share is already 55 million or over 700$ for every man woman and child in the city.
It better be a nice bridge is all I can say.
That and, "Hello to even higher taxes!"
Mayor Fortin can not be trusted with our property taxes.
Here are a few of Fortin's Follies:
- Johnson Street Bridge; probably $100 Million
- Sewage treatment that is scientifically unsound: $1000 Millions
- Several Million for Travel Lodges for Homeless people who then strip out the copper wire for scrap metal to buy drugs
- Proponent of spending $20 million on the old E&N railway
- One BILLION $$ for LRT from Langford to downtown Victoria
- Offloading Storm Water infrastructure from property taxes to a new Levy so he can claim property taxes are 'only' going up 4% - but the new levy will add over $500 per year to every property owner as a new 'property tax' (it's not a levy as he claims, it's a new property tax that will grow rapidly)
-Neglecting underground infrastructure that will cost property owners billions and be paid for by the new 'levy'
- He wants to spend several million to change Douglas street for buses and bikers, but it's not needed.
The Johnson street bridge is just a small project that Fortin wants to impose on property owners. The real cost to property taxes will be over $2,000 extra per year; not just $700 for the Johnson Street bridge.
I am continually amazed that in 2014 the construction of a bridge is still such a massive ordeal. Are we building the space shuttle here or a chunk of steel that can be raised like in a thousand other places in the world?
Speaking of expenses, the salary list at City Hall is quite shocking as well.
I have issues with the City of Victoria. For example, usually it takes about 2 to 3 months to obtain a permit for a new house, nothing crazy, just a box.
I am building in a different municipality and they approved my plans and gave me a permit in 8 business days and it isn't a straight forward box either. It would have taken 3 months with Victoria. Just don't make any sense.
The Down Payment Hurdle
"Vancity found that 16% would consider taking cash advances from a credit card or credit line to fund their down payment."
Ladies and gentlemen, a round of applause for our "well regulated" banking system.
"I am continually amazed that in 2014 the construction of a bridge is still such a massive ordeal."
Consider then that for Victoria to tweak the garbage pick-up arrangements slightly they first had to hold a referendum and then later ignore the results of the referendum (since the favoured money-saving change would have resulted in a few less union jobs in the long term - though no immediate layoffs)
A nice example of the difference between private enterprise and the municipal government.
The blue box is picked up once every two weeks including holidays by one employee.
The garbage is picked up once every two weeks, except on holidays and takes 5 employees.
The City of Victoria is run by the Unions. It's time to privatize the garbage pick up. We can not afford this Mayor, he's writing cheques that we can't pay.
The garbage is picked up once every two weeks, except on holidays and takes 5 employees.
Garbage pickup used to take two employees in Saanich, but as of April 1st with the new garbage and compost pickup - just one employee is needed. The "waste collection workforce [was] reduced from 21 to 14 people" (link). Maybe Victoria could learn from Saanich?
Re:Tim's Ayre's, Pre-'presidency', he had what appear to have a tantrum on a poster on a local site. He subsequently deleted his posting but the responder was kind enough to remind him what he had written:
http://www.kidsinvictoria.com/forum3/viewtopic.php?f=7&t=3756911&p=1363232#p1363232
Nice link, watching_and_waiting...
Tim Ayres, what a total jerk.
As we enter into the Spring, the market for detached homes in the core districts is leaning towards a bull market favoring sellers.
With months of inventory down to 4; the average exposure now at 41 days on the market; and the sales to new listings ratio at 46%. This is prime feasting time for commissioned agents.
What this seems to show is that the core districts are currently short on house listings. That may change in the next month if more sellers come to the market. But as it looks to me, house prices in the core districts will remain stable for the next 90 days with a potential for some bidding wars in choice locations.
Buyers are gearing up with 2.99% interest rates that will allow them to overbid to get that dream home. That this decision may become a nightmare later is of little importance.
It' time to get your cheque books out (we also take Visa) and let the auctions begin!
I think Just Jack is correct about the Spring market in the core areas. It certainly seems like it is all fired up again. Maybe it's the lack of listings, maybe it's the 2.99% mortgage, but whatever it is, it certainly doesn't seem to stop people from paying huge amounts of money for an ordinary house - not a mansion or a stunning waterfront or even in a truly fabulous location.
Here's an example - 1764 Hampshire Road just sold for $961,500 in 25 days. It sold for almost $300,000 over its BC assessed value of $669,000. To be honest, it's nothing special, just a nicely renovated and, of course, well staged house. I can’t imagine wanting to pay nearly $1M without even a view of the water, or something a little special, even in Oak Bay.
http://www.remax.ca/bc/oak-bay-real-estate/na-1764-hampshire-rd-na-wp_id93759897-lst
I'm still amazed!
S-J said,,,,,"I can’t imagine wanting to pay nearly $1M without even a view of the water, ...."
-------------------
All 'virtual money' purchases. If most saw how much this was in $100 bills they'd take the briefcase and spend it somewhere else. Only numbers to most anymore and pure profit to the banks and mortgage companies.
A sad litany of things to come...
Monday, April 14, 2014 8:00am
MTD April
2014 2013
Net Unconditional Sales: 278 615
New Listings: 695 1,408
Active Listings: 4,170 4,585
Please Note
Left Column: stats so far this month
Right Column: stats for the entire month from last year
B-21. Here at Last
"Borrowed down payments are still allowed"
We don't want to rock the boat.
Just Janice here - I agree a million dollars in Victoria should still get "something special". However, in discussion with a Vancouver based friend, I'm rather pleased that Victoria is still "reasonable" as unreasonable as it seems to many here. A million bucks (or less) - there was recently a home on Dallas asking just $799k - so full waterview and in the core, for well less than a million. I do think there's some merit to the argument that Victoria is different than a lot of other markets...not to say impervious to a correction, but rather it may correct at a different rate and for different reasons than other real estate markets.
I suppose Janice it all comes down to risk. Are Victoria properties riskier than Vancouver properties?
The information to decipher risk isn't readily available. The banks and CMHC compile that information but are not giving it out.
One point I would make about risk is that if it takes two incomes and a suite to buy a property that is much more riskier than being able to buy a home on one income. The risk is if one dies, gets sick or loses their job. Their is no way to add another dollars worth of income. You have a major contraction in household income that will move the household into bankruptcy.
I would also look at rising expenses to maintain a home. Some of these are fixed and some are variable costs. It seems that the fixed costs of owning a home are rising quicker than the variable costs. There is no relief from these fixed costs. You can't substitute ground beef for steak like you can with variable costs. Taxes and utility charges are carved in stone.
Are Victoria's fixed cost rising faster than Vancouver?
I don't know.
Lots of sales coming in today. We are on track for the best April sales numbers in 4 years. There is also a chance we break the 700 barrier for the first time in 48 months (April, 2010 was the last time we have over 700 sales in one month).
ll
Out of the 27 homes that sold within my criteria last week, 18 of them had additional suites.
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