Monday, January 26, 2015

Jan 26 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.



Jan 2015
Jan
 2014
Wk 1Wk 2Wk 3Wk 4
Unconditional Sales83
165
265
342
New Listings286541786
1090
Active Listings302031213198
3489
Sales to New Listings
29%
30%34%
31%
Sales Projection--302342

Months of Inventory
10.2


Should be somewhat above last year's total given accelerating sales pace, but likely not a lot.  About 360-370 I'm guessing.

210 comments:

1 – 200 of 210   Newer›   Newest»
Leo S said...

JJ said "Is it possible to put months of inventory, Sales to New listings ratio and median price on one graph?"

Somewhat difficult given three different scales. However could do price, sales/list, and sales/inventory which is just the inverse of MOI.
What date range you thinking?

Justsilver said...

what the hell happen to this one: 345818. Sign of seller's market? Ask for 585k, accepted at 633k. DOM: only 1 day. It got to be an unconditional sale then. Under such market environment, how could this happen?

patriotz said...

Just to close that discussion in the previous thread:

Debt-crippled Dutch wake up to housing crash

That's the end result of those crazy policies noted.

The folks in the Federal government have taken notice of this, which is why they have taken modest measures in an attempt to bring about a "soft landing", in absence of a black swan. Uh what was that bird I just saw?

dasmo said...

That's not the end result the policies...that article is from 2013...

dasmo said...

It's partly why they upped the borrowing % to 103%. Because of underwater mortgages...

Just Jack said...

Let me think about it Leo_S

Al + TOH said...

wrt 345818, it is in our neighborhood. We just saw the sold sign today without seeing it for sale first. The current owner bought the house for around $627k (if I remember correctly), via sale by owner less than two years ago. I was surprised at that time that the house with its size and not big yard could get that much, but Marko said it was nicely updated and maintained, as he was inside then.

So $585K asking price this time was obviously set for a bidding war, thus probably also why it went so fast and above asking. Haven't had chance to talk to the current the owners recently, so don't know why they need to move again so soon.

Marko said...

Yea I don't know what happened with 345818 - I just saw it as sold in my system, didn't even catch the initial listing.

In 2011 the house went for $630,000 privately - it was very nicely updated when I viewed it at such time.

$633,000 seems reasonable to me given it is a MLS® sales.

dasmo said...

RBC cuts mortgage rate as bond yields drop
5-year fixed rate as low as 2.84%, according to reports

Chris said...

I am surprised TD’s report today predicts home prices falling in 8 of 10 provinces this year! It has only BC and Ontario bucking the trend and rising 3%.
“In British Columbia, improving job conditions relative to those of neighbouring Alberta will act as a magnet drawing interprovincial migrants into B.C. over the next few years.”

http://www.td.com/document/PDF/economics/qef/ProvincialEconomicUpdate_Jan2015.pdf

Leo S said...

It's partly why they upped the borrowing % to 103%. Because of underwater mortgages...


Exactly. Governments enact this kind of stuff in response to collapsing markets. If the Canadian government starts relaxing mortgage rules you'll know we've finally hit the crash. In the end it hardly makes a difference though as we see in the US and in Holland.

dasmo said...

They relaxed them before without a crash....

dasmo said...

D forecast that the downward trend will lead the Bank of Canada to cut the overnight rate by another 25 basis points to .5 per cent, before standing pat until the second half of 2016.

Leo S said...

Yeah and now they smartened up

dasmo said...

If they are smart they will lower rates and tighten restrictions. I don't beleive they are smart.... They are greedy...

Marko said...

Just noticed RBC has dropped my variable mortgage interest from 2.30% to 2.15%? Guess they are only doing 0.15%?

dasmo said...

So far... anada’s major banks are heading into a renewed mortgage price war

Just Jack said...

My neighbor who has resisted buying an investment condo all of these years has gone to the bank this morning to get a loan to buy a downtown investment condo - only because of the low rate. If his bank doesn't offer the low rate he believes he can bully them down to meet RBC's rate as he has all of their investments at this one bank.

They want to buy, with their son, a condo that they can rent out to tourists and as a place for their son and his common law wife to stay in when they are in Victoria. And they're are actually thinking about incorporating too.

They plan to rent the condo out two weeks each month and their son and his girlfriend to live their the rest of the time. They're not going to use a vacation rental company and plan to do all the bookings and cleaning themselves.

dasmo said...

Boring... Me? I'm re balancing after the blowout Apple quarter +7.8%! Pulling out some cash... Starting a position in Bombardier.... No cleaning involved....

Seth Perry said...

If oil prices continue to fall and remain low for the next year or two will we see a negative impact on local RE from a lack of HAM (Hot Alberta Money)?

This comment caught my attention today on Garth's Blog.

The husband of one of my wife’s good friends is a fly-in/out (Vancouver Island) contractor in the oil patch and has made well over $200k/annum the last few years. This week he was told once his current project is done (a couple of more weeks to go) he won’t have any work until at least June. And that depends on oil prices. He claims 10, 000 people have lost their jobs in Fort Crack over the last week. I have no idea how reliable that number is though.

This couple are just like all the others, living high on the hog with a big property, toys out the ying-yang and hardly any savings. Now the wife has started looking for work to help pay the bills. Sheesh.

http://www.greaterfool.ca/2015/01/27/the-quick-the-dead/#comment-348580

Seth Perry said...
This comment has been removed by the author.
Just Jack said...

There are 361 houses for sale in the core districts of Victoria, Saanich, Oak Bay, Esquimalt and View Royal. With 78 selling in the last 30 days and 146 new listings added in the same time period. Median Days on Market 48
4.6 MOI
SNL% 53%
DOM 48

Median price $526,500*
A year ago the median price was $575,000

* likely not enough sales to determine a reliable estimate of the median.



In contrast there are 555 condominiums, 61 sold, 168 New listings

9.1 MOI
36% SNL%
DOM 57 days

Median Price $255,000*
A year ago the median was $299,500

Generally, 5 to 7 months of inventory and a sales to new listings ratio between 40 to 60 percent along with a days-on-market between 30 to 90 days indicate a balanced market with stable prices.

And that seems to be the detached house market in the core these days. The declining Loonie and oil seems to have had no measurable effect on house prices in the core.

In contrast the condo market in the core seems to be bearish or soft, favoring buyers. And that includes many pre-construction condos that, as usual, have their sale price reported at full list price.

January is a bad month to develop any kind of trends as the market is shallow and can act in a conflicting manner. Where you may have two identical homes side by side. One sells in a week with multiple offers and the other has no offers for two months.

caveat emptor said...

I'd have to agree with Mrs W on the previous post. Some things are starting to look downright recessionary in Canada. Retail failures, energy layoffs, panicked central bank and near recessionary bond yield curve.

On the other hand cratering energy prices will leave a little more money in people's pockets. The cratering loonie will keep a lot of folks vacationing in Canada rather than going abroad and might provide a bit of a boost for tourism (and eventually manufacturing but that takes some time to ramp up).

Overall it's hard to imagine the latest rate cut doing much for the housing market except perhaps mitigating a decline.

caveat emptor said...

Canada first among g7 to have an inverted yield curve
http://www.fxstreet.com/news/forex-news/article.aspx?storyid=263b844b-918b-4dc9-80e6-30ec2b0daf88

Of course the inversion is only partial at the short end, not a full on inversion across the curve.

Food for thought as an inverted yield curve is one of the better recession predictors (though not foolproof).

I can still remember in 2007 how the majority of forecasters were saying that "this" inversion was different and was not forecasting a recession - big OOPs

Just Jack said...

What are the expectations for construction costs with a falling dollar?

Can developers pass higher construction costs onto buyers?

What will this mean to unemployment rates in Victoria?

Will we see a sell off of investment condos?

totoro victoria said...

Why in the world would someone incorporate to hold an investment condo in Canada. You can't claim losses on your personal income. You are taxed at the highest marginal tax rate on profits. You have to put 30-40% down. You pay a higher mortgage rate and give a personal guarantee anyway. Term is reduced. I could go on, but the only time it I can think that it might make sense is if you are buying it with pre-tax income already retained in a corporation and you are using it for your own business operations.

patriotz said...

All correct. And I will add one more - I believe if you stay in a corporation-owned condo that is at other times rented out, it's treated as the corporation renting it to you at the market rent. You might own the corporation, but you and it are two different taxpayers.

Chris said...

The corporate tax rate is only around 20% and weekly rentals would be considered active business income. The buyer's plan could be to grow the business quickly by generating income on multiple vacation rentals with the added benefit of limited liability. There are numerous advantages to incorporating property and many have amassed fortunes by doing so.

Just Jack said...
This comment has been removed by the author.
Just Jack said...

Almost the end of the month and time to take a look back at some of the properties that sold which I considered good deals for buyers.

With listings so low, there weren't many as desperate people paid desperate prices in the last month.

Nevertheless, I start with a single wide manufactured home on a rental pad in an adult complex in Cobble Hill for $16,500 or the balance owing on a Hipster's credit card.

Then into Sidney where an an 800 sq. ft 1-bedroom condo needing some TLC sold at $147,900, Originally purchased in 1998 at $80,000. Will someone please send directions to all the retiring Baby Boomers in Canada as they seem not to be able to find Victoria on a map.

Right into Oak Bay for a 1-bedroom condo at $180,000 just 3 blocks away from the new condos near Foul Bay that are "selling" at full asking price of around a $1,000,000. You're paying for location for the condo in Oak Bay. I don't know what the people at Foul Bay are paying for. It also goes to show you that just because someone paid a million down the street from your home, it doesn't mean your house has gone up in value.

As I said there weren't many good deals for buyers this month. There were some properties that were over bought this month and therefore great deals for the sellers. But that's just Allah telling those buyers they have too much money. Or did have.

Introvert said...

Marko, do you have a drone taking this aerial footage, or what?

1434 Wende, Saanich, MLS® No: 346065

Marko said...

It is either drone or a really long stick I have for my gopro.....drone is a dumb word in my opinion for very small quad prop helicopter.

When I hear "drone" I think US military taking out targets abroad.

Leo S said...

What quad copter? Pretty smooth video

dasmo said...

Wow... Greece is in rough shape 200 times the net emigration than 2008. 25.5% unemployment.GDP down over 25% since 2008. Stock Exchange down fr 2856 to 819....

totoro victoria said...

You are just plain wrong Chris.

First, they are not renting "weekends" - they are renting out two weeks each month.

It doesn't really matter though as they need five or more full-time employees of the corporation in the rental business to deem this rental to be "active business income" taxed at the lower corporate rate.

Income would not be active business income - profits are taxed at 46% as specified investment income and all the cons I listed apply.

In Canada you can largely control risk with insurance. It is not like in the US.

No-one I know has "amassed fortunes" by incorporating to hold a condo to rent out half-time in Victoria.

My guess is that this plan when run through a corporation will result in a loss of approximately $500-$1000 a month.

Chris said...

Kermit not know how to read so well.

"The buyer's plan could be to grow the business quickly by generating income on multiple vacation rentals"

Btw I'm a CGA.

totoro victoria said...

I'm so glad you are a CGA.

Unfortunately, you have no idea what you are talking about.

Time to brush up on specified business investments. Check the CRA bulletins: Interpretation Bulletin IT-73R6

If you are trying to say that Just Jack's neighbour who has been waiting to buy his first condo for his son to stay in half time should incorporate because he someone magically now plans to run a vast vacation rental empire requiring at least six full-time employees you might see the issue.

A general rule is that it is a mistake to incorporate to hold investment properties to generate rent and then later sell at a profit.

This would include single-family homes, condominiums, duplexes, 4-plexes or even small apartments up to 30 or 40 units.

These properties should be bought individually, jointly with a spouse or personally with a group of investors in each investor's personal name in a partnership arrangement.

The reason for avoiding incorporation is that when the primary source of income for a corporation is rental income, the company does not qualify as an active corporation and will enjoy none of the benefits of a CCPC.

In fact, rental income is treated as passive income along with interest and dividend income and these forms of income are taxed at a punitive rate under the Income Tax Act at about 46%.

So, it is foolish to advise someone to incorporate to hold one or several rental properties. They will pay about 46% corporate taxes plus at least 15% more on the after-tax dollars issued to shareholders as dividends. This creates combined corporate and personal taxes of over 60% compared to the highest personal tax rate of 46.4%. It is a tax and financial disaster.

See:
Lee v. The Queen, 99 DTC 925, Docket: 97-3124-IT-G (TCC)

dasmo said...

Interesting...

Chris said...

You should offer courses to the well-offs holding property in corporations. You could enlighten us how we're doing it all wrong.

nan said...

@ Chris - I don't know whether you are right or wrong, but I assure you it has nothing to do with you being a CGA...

Marko said...

I've done three mere postings (flat fee listings) in the last three days. All three with offers and two of the three with multiple offers.

The three full service listings I did prior to the three mere postings haven't moved yet, go figure.

Just goes to show the power of MLS® and the fact that buyers offer on homes where they see the best value; irrelevant of how or who has the property listed on MLS®.

Yet, the majority of the market locally continues to pay 6%100k+3%balance to sell their home. Crazy.

totoro victoria said...

I set out the laws and the links to back up my statements.

Rather than attempting to discredit by holding yourself out as an expert or success story why don't you set out the sections of the income tax act or the bulletins or other interpretations that prove your point?

IMO, when you post credentials anonymously it doesn't mean jack (sorry jj) unless you can back it up with actual demonstrated expertise on the subject matter.

And the internet is a diverse place. You don't know who I am or if my expertise exceeds yours - or not - but I can guarantee that someone out there who will read this will have more experience in this than you.

False expertise and misinformation is annoying.

Chris said...

I thought we knew everything :-P
I would help try to help you understand the many merits of incorporating but I’m sensing minds have already been made up on the subject. I’m reminded of a nagging ex-wife who wouldn’t give in until I appeased her inferiority complex by saying “yes honey, you‘re right. All those other people are wrong.“ Who knows, maybe you had a company that failed leaving a bad taste in your mouth.
Feel free to use your corporate knowledge to judge the buyer and their accountant or lawyer who are advising the purchase. Maybe you could go as far as getting the buyer’s number from Just Jack so you could get your two cents in. There are books thicker than yours and my head put together :-P on corporate structure & tax code. Who knows, you might learn something new as to why they are taking that route.

Marko said...

Are there not fairly significant yearly accounting corporation fees too?

I should probably look into a bit more now that I have three rental properties. I guess I would have to pay PTT to move them from my personal name to a corporation?

Tren said...

I always learn something new from this blogger.


again, keep up with your good/bad work.

totoro victoria said...

Marko, if you have three rental properties it is not worth it to incorporate. I have more than that and it is not worth it.

There is the initial outlay and annual cost of maintenance but the tax hit on net and lack of ability to claim losses is significant.

There are no advantages that I can think of for your circumstances until you hit the point when you have six ft employees for the property management company. As you can imagine, this requires an empire given the relatively low level of labour required to run rentals.

And Chris, for all you know I could be a corporate tax lawyer. If I'm a deluded and under exercised computer addict secretly living in Leo's basement I've still provided you with solid backup for the opinion.

Stop digging a deeper hole for yourself here by attacking me personally and respond with some provable facts and supporting evidence. A professional with expertise would be able to do this.

dasmo said...

I'm legitimatly curious! Please give us the secrets Chris. Don't be mad!

SJ said...

Bidding wars starting in Vancouver again. Imagine getting 31 offers and 20 % over ask.

http://www.vancouversun.com/Local+homebuyers+drive+selling+prices+east+side+realtors/10775458/story.html

"I’ve seen multiple offers on properties — the most being 10 or 12 — I don’t think any of us have seen 31 before. It’s the talk of the town among realtors,” said Albrecht.

Albrecht said the multiple offers could be due to there being a high demand for homes in Vancouver combined with a shortage of supply, plus low interest rates.

CuriousCat said...

Darn it my long post is gone after I logged in! Well the gist of it was that Totoro is right and Chris is NOT. Only in very specific exceptions can residential rent be considered active business income and in the situation presented, it definitely would be considered passive income and taxed at the highest rate.

And I am a practicing CPA. (that's what we call CGAs now, just fyi)

CuriousCat said...

Having more than one or multiples even, does not grant the corporation magic powers capable of disguising the fact it is STILL passive income. Unless you need 5+ full-time employees to manage these rentals. But Totoro already said that didn't he?

Just Jack said...

We have bidding wars too. Or so we think.

If you under list a house at $299,000 in Vic West you're going to get multiple bids over the asking price.

Or you can exclusively list the property for two weeks and have it sell. Then put it on the real estate board's service showing it sold in 1 day at over asking price.

Under listing a property is a great way of getting a lot of action quickly especially if it's unusual such as waterfront. There's a limited market for waterfront and if you can concentrate the activity in the first three weeks by under listing you might get the best price.

These tactics certainly improve the agent's statistics and give the impression of a "hot" market or a "hot" agent.

Another quirky thing are foreclosures when the lender has Conduct of Sale. What seems to be happening is that the lender drops the price every two weeks or so. Eventually the property is under listed and you get multiple bids. Fine if you're in a buoyant market with low inventory and strong demand. Very bad for properties that have a limited appeal as they sell well below market value as they haven't been exposed to the market for a reasonable period due to their unusual attributes.

-If you're the only bidder you're going to get a hell of a deal on these properties.

There are enough properties in foreclosure outside of the core districts today to see that market wobbling into the dark side of real estate. Economists may fear deflation and in real estate sellers should fear a "foreclosure market". That's when the market has enough forced sales occurring that those duress sales become market value.

Which is one of the reasons why CMHC and Genworth don't want these properties advertised as a foreclosure to the public. However, if you have enough experience in real estate you can "smell" a duress sale like the smell of carrion to a Vulture.

CuriousCat said...

And I should add that I'm really Totoro in disguise. I have to be RIGHT gosh darn it!

Chris said...

Is anyone else here old enough to remember this movie playing out again?

- after remaining high & range-bound for years oil crashed for similar oversupply reasons to less than half its price in the mid 1980s
- our currency tumbled from above par into the 70 cent range, same as now
- most resource prices fell sharply between 1981-85, and between 2011-2015
- everyone thought recession as GDP growth neared 0% in 1986, but then the currency kicked things into high gear like timber, tourism, et cetera.
- 1960-born BBs were turning 25 in 1985, their 1990-born BB kids are now turning 25. Of course the difference this time is a far larger cohort of retirees are headed this way.
- mortgage rates fell sharply during both 4-year periods, ‘81-85 and ‘10-14
- Victoria prices corrected from ‘81-85 and ‘10-14, possibly a greater -25% in the 80s as not many segments fell to that extent this time
- vacancy rates dropped here in the mid ‘80s as Albertans fled west, as they are now. With what I’ve seen lately it looks like we’re nearing zero vacancy.

Is it possible prices are about to take off again like ‘86-94? Or are the D&Gers finally going to be redeemed?

patriotz said...

Take a look at Leo's affordability graph on the main page. In 1985 the average and 33% graphs crossed exactly. Today the average curve is a good deal above the 33% curve.

In 1985 mortgage rates were still in double digits. They still had a long way to fall. They are not going to fall proportionately going forward. Look at the banks' responses to the BoC cut.

Wage and general inflation in 1985 were much higher than today.

Perhaps most importantly, the recession itself was in 1981. In 1985 the Vancouver and Alberta RE crashes were already at bottom. The bad news for Western Canada is only just beginning today.

Marko said...

If you're the only bidder you're going to get a hell of a deal on these properties.

When I look at court foreclosure sales I just don't see the "deals" whether it be single bid or multiple bid.

Usually when the accepted offer going to court is below market value you get multiple bids

For example, 861 Wain Rd, was listed for $1,125,000 and I think the offer that was accepted by the bank was $1,100,000 - below market value. That $1.1 million offer is made public, a bunch of people show up on court date and the place sells for $1,380,000.

When the accepted offer in court stands usually it is pretty close to market value so people don't bother showing up to outbid.

I distinctally remember presenting a client in court a few years ago where emotions got going and a property I was confident had a market value of 510k to 520k went for 540k.

Marko said...

Is it possible prices are about to take off again like ‘86-94?

I don't see it....I think we are in for another 3-4 years of flat plus minus 5%.

I think sales volumes will pick up compared to last 7 years but not enough to push prices up signficiantly.

dasmo said...

I'm Still a Halibut but I want to note that rates will drop in half. That's the same as 10% going to 5%...it will just be 3% to 1.5%.

patriotz said...

I'm Still a Halibut but I want to note that rates will drop in half.

Which rates? BoC? Maybe. GoC bonds? Less likely, but possible.

Mortgage? No. The banks have a profit and risk margin which they are not going to drop. You have already seen this.

Chris said...

I don't really see it either, then again I recall nobody believed things would take off in the mid 80s.

Chris said...

With many central banks having gone from ZIRP to NIRP it's feasible Canada is also headed for negative interest rates. I guess it's not surprising with so many BBs retiring worldwide with piles of savings to lend out, but its fascinating the extent central banks are also taking to elevate asset prices. Someday soon our kids may be paid to borrow money.

CuriousCat said...

"CuriousCat said...
And I should add that I'm really Totoro in disguise. I have to be RIGHT gosh darn it!"

I'm really shocked that someone was desperate enough to pretend to be me! Who's trying desperately to be right?? You actually created another account because you were so offended that I agreed with totoro? Seriously? What does this say about you?

AND DO NOT POST UNDER MY IDENTITY AGAIN!

from the REAL CuriousCat

dasmo said...

"GoC bonds? Less likely, but possible." very possible

totoro victoria said...

Drama! Espionage! Just another day on hhv.

SJ said...

Bidding wars from Van spilling over to Vic??

A Shutters 1200sq box just went over ask @ 541k after being on market since Sept.
A Fairfield box just went over ask @ 520k, 88k over assess, after being on market since Oct.
A 1400sq Park Blvd went 15k over ask @ 675K, on market since Nov.

patriotz said...

I guess it's not surprising with so many BBs retiring worldwide with piles of savings to lend out

Canada’s Baby Boomers financing retirement with debt

Google will give you a plethora of similar articles.

Marko said...

A Shutters 1200sq box just went over ask @ 541k after being on market since Sept.
A Fairfield box just went over ask @ 520k, 88k over assess, after being on market since Oct.
A 1400sq Park Blvd went 15k over ask @ 675K, on market since Nov.


i/ Don't see anything over ask at Shutters for last 5 years.
ii/ One thousand over asking after they dropped the price 30k.
iii/list price didn't include gst, sale price reported with gst.

SJ said...

The Shutters only went 2k over list, 31k over assess. Still a joke. I hate those units and bldg.
I didn't know the Park Blvd didn't include gst, still 675K for 1400sq, 3rd floor, no view, that's almost as crazy as what the ones on Foul Bay are going for.

I put the ?? after bidding wars, but I'm predicting many by Spring. Can't stop what's coming ;)

Patz, I don't think there's much argument the boomers are the wealthiest generation to walk the planet. One of the reasons everyone misses as to why they're even getting richer is they are now inheriting trillions from their parents. With my grandpa passing for instance my mom is about to receive over a million and she has 5 siblings. And 3 of them say they are moving here to live by their favorite nephew. Ok, they didn't all say the favorite part ;)

Jack and Cate said...

SJ said... "....Patz, I don't think there's much argument the boomers are the wealthiest generation to walk the planet. One of the reasons everyone misses as to why they're even getting richer is they are now inheriting trillions from their parents..."
--------------------------------

Don't know who your parents or these peoples parents are but I don't have a friend or high school buddy who had received much, if anything from passing parents. Matter of fact our siblings had to pay for both our parents funerals - 10 years apart - no inheritance, just bills. General statements and anecdotal comments are what causes this type of hype.

Dollars just coming out of every orifice....good luck to your nouveau rich friends, they're gonna need it in this upcoming economy.

SJ said...

The average boomer will get 100k, higher in BC @ 120K. Note that average means many get 1M+, many get squat. My grandpa luckily had some land among other investments.

July 8, 2014) - As Canada goes through the biggest inter-generational transfer of wealth in history - approximately $1 trillion dollars over the next two decades

https://newsroom.bmo.com/press-releases/bmo-investorline-study-average-inheritance-in-can-tsx-bmo-201407080956149001

DavidL said...

@Chris

We are definitely not about to repeat the 1985 to 1990 rebound. (Prices in the late 1980's rose back to match the early 1980's, but of course there was substantial annual inflation during the 1980's). With interest rates so low and our economy sliding into a recession, I think that prices in Victoria will be more like the pattern in the 1990's. Prices barely moved for the entire decade, while cumulative inflation was close to 40%, making real estate a really good deal by 2000.

CS said...

Canada's economic prospects are apparently so bad, the only hope is to further inflate the RE bubble!

Leo S said...

Patz, I don't think there's much argument the boomers are the wealthiest generation to walk the planet.

I keep hearing this but all the stats I've seen are to the contrary. The average inheritance doesn't mean much because it is wildly skewed by the very wealthy. Median inheritance and median net worth outside of the home would be illuminating

dasmo said...

Ya but those stats are generated by surveying 15,000 people. Do we really know what kind of shape the BBs are in? Last year was the first year the tax man asked what investments I held. Before that they would have had no idea. In fact I took on way more debt recently buying the other house so statistically I would have added to the negative picture. I could pay off the mortgage right now but why would anyone do that which rates so low?

patriotz said...

Before that they would have had no idea.

I guess you didn't read the fine print on your brokerage statement saying that all transactions are reported to CRA.

dasmo said...

My apple transaction took place many moons ago. They have no idea. They rely on you telling them everything. Have you ever dealt with the CRA? I swear their filing system is a giant unlit werehouse full of unmarked garbage bags full of papers...

dasmo said...

In other words... They won't know until I sell....

Leo S said...

>> My apple transaction took place many moons ago. They have no idea.

Haha. Try not reporting your investment income and you will figure out real quick what they know.

dasmo said...

I report all my income... Sheesh I have to spell it out I guess. There is nothing to report until you sell... So CRA has no idea until then....

CuriousCat said...

Going back to what kind of shape BBs are in, why not indulge in some more anecdotal evidence? Personally I think those are fascinating lol
In my experience, BBs are not very forthcoming with their financial situation. My father is 67, he is the oldest of 7. He will inherit virtually nothing when my 92 year old grandmother passes. She is my last living grandparent and there was no inheritance years ago when my other grandparents passed. My father has a house in a retirement community that is paid for, a couple vehicles, no debt, some RRSPs, and he's living comfortably off his pension. The day he passes us 4 children will split his estate, however things are complicated with his remarriage as she will probably be allowed to live in the home? Again, he hasn't told us exactly what to expect, therefore we expect nothing. My aunts and uncles are all in various stages of ending their careers or already retired. They are teachers, cops, farmers. I've not heard any gossip of any of them inheriting any substancial funds.
On my husband's side, he has just recently lost his last living grandmother. We know that she owned a condo in Vancouver, worth probably $400k and maybe some investments, and there are 4 kids to split the estate. This seems to fall in line with the stats SJ quoted, however the siblings do not get along and we have no idea if his mother will actually get anything in the end. Even if she does, we probably will not be told. When my husband's grandfather (dad's dad) passed away a couple years ago, his house in Vancouver was sold for around $650k and we assume the proceeds were split between the 5 siblings. My in-laws purchased a new car shortly after, so I can only assume they received a cut. The big difference between my family and my husband's ? My family lives out in Manitoba.

Leo S said...

Ya but those stats are generated by surveying 15,000 people. Do we really know what kind of shape the BBs are in?

Yes. As it turns out there is this thing called a representative sample.

Leo S said...

Median net worth of those about to retire is just over half a million .

About two thirds of that is pension and primary residence value, so no, boomers aren't particularly wealthy.

patriotz said...

That's actually the median net worth of all family units where the major earner is near retirement.

On the same chart the median net worth of unattached seniors is a quarter million.

Leo S said...

Sure, but the stats for seniors represent those already having drawn down their wealth. The people about to retire would be more representative of what people are starting out with

dasmo said...

I wouldn't call asking 15000 people out of 30,000,000 a representative sample. Shoot ask anyone how much money they make and see what kind of answer you get...

totoro victoria said...

The median net worth for lone parent families is $37,000.

I'm not sure how representative that is, but it seems to me that the major difference must be the inability to enter the RE market.

It was a bit disheartening to read that.

Marko said...

Mon Feb 2, 2015 8:25am:

Jan Jan
2015 2014
Net Unconditional Sales: 351 342
New Listings: 1,027 1,090
Active Listings: 3,283 3,489

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

Marko said...

Lowest new listing count in 10 years and lowest active listings in 5 years.

patriotz said...

it seems to me that the major difference (in single parent families) must be the inability to enter the RE market.

That's more a consequence than a cause. Unmarried parenthood has correlated with low incomes for a long time, regardless of local RE prices or market cycles.

Higher income people are much more likely to marry.

Finally divorce, which results in single parenthood post-marriage, of course results in lower household wealth (because one gets split into two).

SJ said...

Lowest new listing count in 10 years and lowest active listings in 5 years.

I'm telling ya, she's gonna be one Humm-Dinger of a Spring ;)

I've been pounding the pavement lately for some incoming family members and both rental vacancies and decent listings are getting tighter by the week.

Just Jack said...

The poor selection also stops people from buying real estate too.

Yet in the Westshore, there are foreclosures where you get some great deals as a buyer.

Like a 2100 square foot home on 5 acres along Otter Point Road that was bought from the contractor at $689,000 in 2010 and sold this year at $415,000

Or a home along Roberlack that was listed below assessed value by the owners at $459,000. Slipped into a court order and sold this year for $396,000

How about a condo in the Hudson that sold in 2007 at $386,000. And sold at court for $276,000 this 2015. And that was after the original bid at $252,000. That means at least two people duked it out and all but one called it quits before the final $276,000 bid. Rationally thinking that there will be another property that will come up.

There are about 35 advertised court ordered sales today. Then there are the estate sales, and these can be good buys too.

This is one weird market. As SJ said there is very little listed. That should be making prices rise. But they aren't.

If you're willing to search a little or have your agent seek the distressed properties for sale there are some great buys to be had. Just don't ask your agent what to bid - you'll never get a good buy doing that. As they are always going to say to bid close to list.

And there are some real dream homes listed in the 1 million to 3 million range too. It isn't just war shacks that go under the mallet.

Yes, there will be those that can't find a suitable house to buy or rent. That's likely because they are looking in the wrong town. Don't come to Victoria and expect the quality of buildings like you would find in Toronto or Vancouver.

Marko said...

How about a condo in the Hudson that sold in 2007 at $386,000. And sold at court for $276,000 this 2015. And that was after the original bid at $252,000. That means at least two people duked it out and all but one called it quits before the final $276,000 bid. Rationally thinking that there will be another property that will come up.

I've shown a lot of units at the Hudson and the $276,000 perfectly illustrates my point of there not being deals on court foreclosures.

650 sq/ft facing Douglas (loud as you have Douglas traffic plus bus stops right below). Sale price = $425 per square foot.

My client purchased a non-Douglas facing 723 sq/ft unit in mint shape for $312,000 or $432 per square foot.

Other one bedrooms have sold for $275,000 and $286,000 respectively.

$252,000, the price going to court was under market value but it came out of the court room pretty much right at market value in my opinion.

Leo S said...

I wouldn't call asking 15000 people out of 30,000,000 a representative sample.

And that's why they wouldn't hire you at statistics canada

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

Fair enough... I guess size doesn't matter... Who knew...

Just Jack said...

Would it not have been easier just to show the last 3 sales of similar sized condos on the second and third floors in the Hudson?

I'll help you.

They sold at $286,000; $295,000 and $298,000.

I'm not saying the condo didn't sell at market value. A foreclosure can sell at market value and quite often do.

Depending on market conditions, a foreclosure typically sells at the low end of the market value range. As you can see $276,000 appears to be the low end of the value range for similar condos selling in that complex.

The more desirable the property is to many people the more narrow that range becomes. A home out on Otter Point sells at $415,000 or a condo in the Hudson at $276,000.

The range is wider for Otter Point because of current market conditions which favor buyers. And the same reason why a condo in the Hudson will have a narrow range as the market for downtown condos favors sellers.

Marko said...

Would it not have been easier just to show the last 3 sales of similar sized condos on the second and third floors in the Hudson?

I'll help you.

They sold at $286,000; $295,000 and $298,000.


There has also been a $275,000 sale in the last 4 months, a floor higher too!

The $298,000 is not a good comparable as it is on the quieter side of the building and has a 384 sq/ft patio compared to the west side units that have ZERO outdoor space.

Foreclosure units also on average tend to be in worse shape than non-foreclosure units.

Just Jack said...

Foreclosures will typically sell at the lower end of the value range not because they tend to be generally in an inferior condition but because the property is being marketed under duress.

In such a sale, there would be no representations or warranties whatsoever from the seller.

That's a lot different from normal marketing conditions between a buyer and seller.

A property that sold under foreclosure may still be considered as selling at market value but with the noted marketing limitations.

Market Value is a range in value. You can say the property is worth $283,501 but that's your opinion. You can provide an opinion that is fair to both buyer and seller and that would be an opinion of fair market value.

If the evidence is showing a market value range from $275,000 to $298,000. And you say the market value is $275,000 - that's your opinion. But is it an opinion that is fair to both buyer and seller?

CuriousCat said...

Mark and JJ, what are your thoughts on 5092 Clutesi and 4033 Rainbow St?

dasmo said...

Stats Can themselves illustrate my point... From their household debt survey data sources "Because of the low response rate to the assets portion of the survey (about 50%), assets-related variables are not used in this paper."

SJ said...

Wow, i just noticed energy is up about 20% over the last few days and Cdn financials up around 10%.
Markets are seeing some kind of wonderful coming our way this spring.

Ok this could have something to do with it.
http://www.thestar.com/business/economy/2015/02/03/us-auto-sales-surge-in-january.html

Be prepared to see a bunch of Americans cruising our streets in their new SUVs this year.

Just Jack said...

When you're looking at comparing two properties like Rainbow and Clutesi, it's the above grade floor area that is important. Both being listed at close to the same price.

One has 3,164 square feet of finished floor area and no basement as compared to 2,352 square feet above grade not including the basement Which is an additional 590 sq. ft.

Pick any number for custom construction you want as long as it's reasonable say 200 or 225 or 250 a square foot for custom construction. It doesn't matter that much as long as you apply that same rate to both of these custom homes.

3,162 sq.ft. x 250= $790,500
2,352 sq.ft. x 250 =$588,000

A difference of $202,500

Even if you put basement finishing at $100 a square the difference is still $143,500 just on the house.

You can do the same at $200 or $300 a square as I'm just showing you which is the better deal assuming equal quality.

Now which is worth more an 8,000 square foot lot or a 5,000 square foot lot? How much more?

Which location is worth more High Quadra or Cordova Bay?

But what about the City View? The value of a view is directly related to the value of the vacant lots in the neighborhood. Hypothetically if you had two vacant lots with identical city views. Say one lot was in a hood of half million dollar lots and the other in a hood of a million dollar lots. The City views would have a value along these lines.

lot value x view factor = value of view

$500,000 x 20% or $100,000
$1,000,000 X 20% or $200,000

Identical views but different values. You have south west water view in Esquimalt and you can have a south west view in Oak Bay. Which is worth more?

Rainbow has a view and Cordova Bay does not. However, Cordova Bay has an 8,000 square foot lot and Rainbow has a 5,000 square foot lot. That size difference could have a factor of 20% too.

So which one of the two homes is the better deal?

The intent of this isn't to give you my opinion it's to demonstrate how you can quantify differences between properties measured in dollars. At the end of the process you can still say but I like the other house better! That's your emotion speaking. That's the sizzle and smell of the steak in the room - not the steak. Are you buying the sizzle or are you buying the steak.

Note: the 20% was just chosen as an example. All of these factors are pulled from data extracted from the marketplace and may differ depending on the degree and type of view. And yes there are other factors to consider. This is just the Coles Notes version.

CuriousCat said...

So are either of the homes a good deal? Or are they both overpriced? I guess time will tell of course. The Rainbow St property has been listed for many months, originally at 1088 and now 1038 since October. I have a friend who owns on this street and is watching anxiously to see what they sell for, and hoping very much that they get over a million so she can list her own. Her realtor however is trying to convince her to list in the mid-9s and feels that other house is overpriced. Clutesi listed at 1089 before Christmas, lots of showings but no offers. Feedback appears that buyers are not keen on the panhandle lot and that the master looks out into the neighbour's house.

Marko said...

One has 3,164 square feet of finished floor area and no basement as compared to 2,352 square feet above grade not including the basement Which is an additional 590 sq. ft.

Pick any number for custom construction you want as long as it's reasonable say 200 or 225 or 250 a square foot for custom construction. It doesn't matter that much as long as you apply that same rate to both of these custom homes.

3,162 sq.ft. x 250= $790,500
2,352 sq.ft. x 250 =$588,000

A difference of $202,500


Below grade construction is quite expensive because of excavations and concrete walls, etc.

In real life the cost to build would be similar for both.

Marko said...

Rainbow actually probably would cost more to build....steel frame, torch on roof, radiant in-floor heating, hot water on demand, huge deck (railings and decking is $$$$), etc.

Marko said...

I had a buyer three years ago offer full asking price on a Rainbow house at the top of the hill and at the time $879k seemed much but since then sales have been on the lower end of the hill $920k, $910k, and $1069k.

Then you have some of the townhomes pushing close to $900k.

Prices have held up really well. In my opinion partly due to lack of new lot inventory. If you want something newish and modern there just isn't a whole ton to choose from.

Marko said...

Panhandle is always a much tougher sell than non-panhandle.

Just Jack said...

What I didn't want to get into was discussing the two homes but rather how you can compare two homes in a logical and consistent manner.

I haven't seen the homes and neither has Marko. Commenting on a specific listing, by another agent might be considered unprofessional conduct.

That's why I tried to steer the conversation away from the specific properties and into generalities about comparing two properties of similar construction quality.

An agent commenting on another agent's listing may be perceived as unprofessional conduct especially in a public forum.

Leo S said...

Rainbow is a poopy pants house. Definitely overvalued. There, problem solved.

Just Jack said...

It certainly is a non-traditional style of home.

Interestingly or possibly not at all.

The Sauder School of Business wants to hire appraisers to write about real life experiences in appraising properties like these two.

In otherwords what makes a comparable a comparable? Are the physical attributes of these two properties actually comparable to each other?

In the states, they have recently brought in Collateral Underwriting which tests the comparable sales used in an appraisal to see how comparable they actually are to the subject being appraised. It's mostly linear and multiple regression analysis on things like finished square footage. If the appraisal fails the test, then the appraiser must provide additional explanations, at their costs, to the underwriter.

Because of this, there are mandatory regulations that the appraiser has to follow for any insured mortgage. And one of these has to do with how basement floor area is included or excluded from the total finished area.

In Canada we don't have that CMHC regulation - yet. But we tend to be a couple years behind the USA.

Look what happens when you consider these two properties. If you're looking at total floor area - they are comparable properties. When you're looking just at above grade floor area then the difference in the square footage is too great and the properties would likely or come close to failing a regression analysis showing them as being comparable properties to each other.

Personally, I wouldn't compare the two. There are too many differences in above grade floor area, type of construction, location, lot size and view amenity.

The thing that they most have in common is price. But, as an appraiser, that's what you are trying to determine and you shouldn't be using that as one of your parameters. This is a common fault among appraisers and real estate agents.

They're no longer trying to determine market value but are trying to justify the price by simply choosing comparable sales that fit the purchase price.

Now this may seem trivial to some of you. However, I've reviewed appraisal reports, just this year, where including or excluding the basement square footage made a difference of $800,000 between two appraisers. Definitely worth an insurance claim against one of the appraisers.

Incorrectly assessing square footage is the number one reason why appraisers get sued - and successfully.

Marko said...

What I didn't want to get into was discussing the two homes but rather how you can compare two homes in a logical and consistent manner.

How does one explain homes on Rainbow selling from 879k to 1069k? The land value, views, and square footage are all a wash give or take.

Just Jack said...

Even your question goes to the heart of the problem.

You don't explain why a property sold at X amount. That implies that you are estimating the value of the home to a predetermined conclusion.

-It sold for a million
-therefore it must be worth a million
-now find sales that support the million

As I said it's a common fault among appraisers and real estate agents.

I review enough appraisals to know when an appraiser is working to a predetermined conclusion of value. An it's almost always with mortgage appraisals. Because mortgage appraisals are "cheap and dirty" where the emphasis is on making the loan rather than an appraisal. That's wrong and appraisers are sued all the time because of sloppy business practices.

And if the agent decides to "help" me, it generally means they'll dump list a page of sales centering around the price they want the appraisal to be. The properties may not be comparable but the price is.

Introvert said...

What do the ladies and gentlemen of the blog think about the new condo, townhouse and loft complex called The Boulevard, on Shelbourne, which is due to be complete this month?

patriotz said...

Via VCI:

Panic hits Calgary’s luxury real estate as oil takes its toll

After pouring thousands into granite countertops, hardwood floors and new appliances, Sandra MacKenzie listed her 102-year-old house on a corner lot in Mount Royal for $1.4-million in November, just as oil prices were collapsing. Similar houses in the neighbourhood were selling for $1.5-million in the summer, but after weeks with little interest from buyers, Ms. MacKenzie recently slashed the price to $900,000. An open house last weekend brought 30 people, but no takers.

“I just can’t go any lower than that, but everybody is so scared to buy now because of the oil prices,” said Ms. MacKenzie, whose parents had taken out a reverse mortgage on the property, leaving her little equity amid falling prices. “I would even sell to a builder at this point. I hate saying that because it’s a beautiful home, but I’m getting desperate.”

Doesn't look good for that wave of rich boomer retirees.

Just Jack said...

I'm interested in the Geo-Thermal heat and how that will work out. It usually takes quite a large field to make a difference in heating costs. So you have to weigh the cost of maintenance and replacement in the future of the system against the savings. And I don't think there is a person on the planet that can give us that answer.

When Dockside Green was being built I wanted to find out about their "green". I was given such a great speech, even a private tour of the complex, went through the penthouse met the bio engineer who explained the waste water system and was told that this was going to change how condos will forever be built in Victoria. That every condo from this day on will be built green.

I ate it up. They sold me on it. I was so green, I thought of changing my middle name to Kermit. I started looking at Vespas. I started biking to every appraisal that was within a 5 kilometer radius. I got myself a Breville blender. I was going to be green from the inside out.

3 months ago, I was at a meeting and met the person that gave me that same tour. And she told me the system never worked correctly. The expensive energy lighting had to be left on, or else the bulbs would burn out faster. It ended up being more efficient to leave the lights on 24/7 and burn more electricity than have to replace the bulbs. Empty storage rooms would have to be lighted 365 days a year. Problems with the waste water system. The cost of replacing the system may be so high, that it will likely be cheaper to hook the complex up to city sewer.

This kind of marketing is so prevalent in our world today that it has been given its own name... Green Washing. I still hope it works but how can it be cheaper than hydro with hydro's massive economy of scale.

If you put a yellow band around an Orange that says organic - you can charge 30% more for that orange. It's not because the cost of production is 30% more than the orange grove down the valley. It's because there are just enough of us that will pay that little bit more.

Grow too many or put too many Organic Oranges out and you have to have a sale. Or take the yellow bands off half of them and charge regular rate for one bunch and 30% more for the other pile.

I'm still pro green, although I think I'm more of a jaded green these days.

As for the complex, I haven't been through it - but it would certainly be worth taking a look at. I might ask if there is a warranty on the Geo-thermal system and for how long?

And I'm still looking for a Vespa.
-just not electric

Just Jack said...

Well Patriotz, I think you and I know what this is like...

"Being caught between a rock and a hard place"

I've been through those markets as they became shallow and dysfunctional. You had to wait for a buyer to come along as subdivisions went unsold and foundations were left unbuilt upon and finally demolished.

I remember one subdivision that had the roads and curbs in, but no houses. My buddies and I raced our cars around the empty streets - our very own private race track right in the middle of the city.

Bent a lot of rims hitting the curbs.

SJ said...

Re: Panic, lol...sells media headlines.
I highly doubt anyone's panicking in Alberta. Oil crashed from $150 to $30 in 2008 and a year later Alberta was firing on all cylinders again. Rinse. Flush the weak hands. Repeat ;)

SJ said...

Besides, BC's starting to boom again Alberta's pain will be British Columbia's gain.
...British Columbia posted a net gain of more than 37,000 people from other countries and nearly 7,500 residents from other provinces in the first nine months of 2014


http://www.theglobeandmail.com/report-on-business/economy/housing/the-real-estate-beat/vancouver-housing-market-booming-as-bc-reaps-gain-of-alberta-residents/article22775169/

patriotz said...

Oil crashed from $150 to $30 in 2008 and a year later Alberta was firing on all cylinders again

That's because the drop in oil price was caused by the financial crisis and the easy money thrown at the economy brought the price up again in 2009 (along with RE).

Only thing that's going to bring oil back up this time is the Saudis deciding they've done enough damage.

Everyone in the oil industry understands this but apparently not you.

Marko said...

I think oil dropping secondary to financial crisis is a little more worrisome then the Saudi's opening the taps a bit for what likely won't be forever.

I doubt that homes in Calgary have gone from $1.5 to $900,000.

Similar houses in the neighbourhood were selling for $1.5-million in the summer, but after weeks with little interest from buyers, Ms. MacKenzie recently slashed the price to $900,000.

lol...I hear this on every second listing presenation...."the similar" home down the street sold for xxx,xxx....and we'll ignore a bunch of other factors that clearly made the home down the street significantly superior.

Marko said...

You don't explain why a property sold at X amount. That implies that you are estimating the value of the home to a predetermined conclusion.

So why is it that appraisers are always asking me what the accepted offer is? Wouldn't human nature alone influence the conclusion of the appraisal when one has the accepted offer price in hand prior to the conclusion.

Marko said...

What do the ladies and gentlemen of the blog think about the new condo, townhouse and loft complex called The Boulevard, on Shelbourne, which is due to be complete this month

I believe completion has been pushed back to March due to elevator components being delayed.

Haven't been inside, they did a really nice job on the exterior.

One of the few developments to offer three bedroom units. Pre-sales have been pretty good.

Marko said...

http://www.marilyn.ca/AtHome/segments/Daily/February2015/2_2_2015/HouseShopCanada

SJ said...

the easy money thrown at the economy brought the price up again in 2009 (along with RE).

Ok, 600 Billion US was thrown at the economy in 2009 to bring the price up, now we're getting a Trillion in Euros starting in March of this year, along with CBs around the world slashing rates. I'll bet you oil is back over $80 before the end of the year.

Everyone in the oil industry understands this but apparently not you.

The smart ones like me know things like the demand blip or the shale oil glut in the US is very temporary ;) Say, did you read about the US soaring SUV & truck sales I posted above? Don't miss the boat Patriotz, invest in your country mining and energy shares.

Nathan Stretch said...

Regarding holding properties in a CCPC: I hold investments in a CCPC, although not real estate, but I think I can correct a couple misconceptions.

The main one is, although Totoro is correct that passive investments are taxed at a punitive rate within a CCPC, it is set up such that if you withdraw those profits as dividends, you receive a tax credit (The "Refundable Dividend Tax on Hand, or RDTOH") which cancels out this increase. The end result is that you end up paying roughly the same amount of tax on the income as if you held the property privately.

Therefore, while there is no tax advantage to holding investment properties in a corp, there is no disadvantage either. (An exception is if you own a separate CCPC that generates active business income. While earnings on the investments don't receive preferential treatment, you get to purchase them with largely pre-tax dollars.)

So, as I see it the main advantage to incorporating, assuming you don't have separate active business income, would be limited liability. (There might be lesser advantages in terms of shared ownership, treatment as part of an estate, etc. Corporations are more easily divisible than properties.) The main disadvantages would be inability to claim losses against personal income/capital gains, and the increased accounting costs. (Although if you learn some basic bookkeeping those don't have to be more than 3 figures a year.) I can't speak to the differences with getting a mortgage, but what Totoro says there certainly sounds plausible.

So it doesn't look like the best choice for most people, but not totally insane either, in the right circumstances.

Just Jack said...

The appraiser is asking you the selling/purchase price because it is a mandatory requirement by the lender and the Appraisal Institute of Canada. Any offers on the property have to be analyzed to see if they are at fair market value. You can refuse to tell the appraiser. Then the appraiser documents your name and states that he asked and you refused. It's basically a cross check to what the lender has on the purchase agreement. Some lenders provide the information when the appraisal is ordered, some don't. It's disclosed in the report that the appraiser was provided with the offer to purchase - nothings hidden.

What you sold the property for is the selling price, purchase price, contract price or market price. Most of the time that price is reasonable and lays within the market value range for similar properties selling in the marketplace. However an appraiser is not a mental magician his or her job is not to guess the exact number that you haggled out between the buyer and seller at 3:00 in the morning. Frankly I don't care if you tell me or not. You can even lie to me about the purchase price. It makes no difference to me whatsoever in my valuation. As long as I document that I asked, I've met the regulation for professional practice.

The accepted offer is one piece of evidence of market value. And it's pretty strong evidence. But it may not be supportable by the marketplace. Then your deal will likely collapse or the applicant will have to come up with a bigger down payment.

Most of what you sell probably goes through with very few problems. If it's on the high side, the appraiser may let it slide through because everyone wants to make the loan and earn their commission.

But, my work is when those mortgages go sideways and I look back at that purchase price and that appraisal and I see how an appraiser has been "managed" by the broker and the agent to have the property "appraise out". And things can get really ugly for that appraiser. When people lose money they're looking to sue someone who has Errors and Omission Insurance or deep pockets and that's usually the appraiser.

And Marko you know who those appraisers are and so does every broker in Victoria.

It happens in every business. There are always those that fill a niche. There are a couple of them in town. Most appraisers have integrity and take their job seriously.

As I said before, that's the mortgage appraisal business which is cheap and dirty work because you're not after an appraisal you're after a loan. The decision to process the loan has likely already been decided before the appraisal is even ordered. The loans officer is just following through on banking procedures to order an appraisal.

But that's how most of our society works today. Everything goes along as even nothings wrong. Then something happens and we look back and see how everyone thought they were doing a good job with good intentions. Putting people into homes that they could not normally afford or getting financing for those that had been turned down by the banks or pushing a little bit higher in that appraised value.

Then the wheels fall off the cart and we look back and ask "what the hell were you guys thinking!"

dasmo said...

It's happening... From ratehub.ca

Best 5-YR fixed
2.54%

Best 5-YR variable
1.95%
Prime - 0.90

I predict 1.99% 5 year fixed come the spring.

Marko said...

Best 5-YR variable
1.95%
Prime - 0.90


Nice

Mahoney said...

Any thoughts on a how much I could expect to spend a square foot to have a house built in town right now with midlevel fixtures etc. I have a figure of $150/sq' in my head. Is that overly high?

Thanks so much for any insight forum!

Marko said...

In Langford/Colwood you would be fine at $150 per square foot but in town you get slaughtered on municipal fees/special requirements whether it be Saanich or Victoria.

Victoria will charge an arm and leg for new service connections and they will force you to replace 50 feet of sidewalk, curb along with patching the road where you replace the curb, and more.

Saanich will force you to put in something called a Rain Garden which is totally useless in most cases in my opinion but costs a fortune as Saanich force you to have it designed and inspected by an engineering firm....for some reason they can't inspect something they've instituted. And more..

I've made video blogs on some of this issues in the past -> https://www.youtube.com/watch?v=12wSTiTaMUA

If I was building in Victoria I would probably budget $150 a foot for a mid-level home if acting as an owner builder (you either need to be a trade person already, or really really savy and business minded, and a flexible work schedule helps to go down this route) or $160 to $200 if you need to hire a GC.

and plans that take 5-7 days to get approved in Colwood/Langford, expect to wait up to 2-3 months for a permit with the City of Victoria.

Marko said...

A home like 1542 Morley (currently for sale) would most likely cost more to have custom built versus just buying it.

Building for the average joe is not cheaper, usually ends up being more expensive but the big advantage is you get what you want.

Just Jack said...

Despite having a much smaller population the Western Communities has more houses for sale than the inner core districts of Victoia, Oak Bay, Saanich, Esquimalt and View Royal combined.


Using the data from January there is about 4 months of inventory in the Core and close to 8 months in the Western Communities.

And new listings in the Core are just slightly ahead of sales with 2.3 being added per sale. That means new listings are being added at enough of a pace to move the months of inventory slightly higher in the next month. Median days on the market for the core is 39 days and that should move up a little too.

In the Western Communities that rate is a bit higher at about 2.8 new listings per sale. The days on market is up to 77.

By no means is this a flood of listings, it's just typical as we head into the Spring.

So what does this mean to you as a prospective purhaser? It means more selection and more time to look around. For most properties you don't have to be bullied into a 48 hour clause or not having subject clauses in your offer like a building inspection or financing.

In the City, the seller is still in the driving seat and the buyer is just along for the ride. In the Western Communities, the buyer can negotiate at the lower end of the value range or wait for that perfect home to come along.

You might even be able to put your offer subject to a satisfactory Appraisal or Market Review by an appraiser before you make your offer. Best $99 bucks you'll ever spend.

Leo S said...

What do you figure you will spend on your house Marko?

CuriousCat said...

"Rainbow is a poopy pants house. Definitely overvalued. There, problem solved."

Haha! I agree! My friend saw the house and the bedrooms have no closets, there is no door into the ensuite (just a hallway) and there is zero privacy in the back. The townhouses above and behind look right into your yard.

I actually wasn't trying to compare Rainbow with Clutesi, I was just curious about them individually for different reasons and only realized after the fact that they are similar-ish.

Just Jack said...

That's good to hear. Because I couldn't envision the person that would consider these two dramatically different styles of homes in their short list of properties to buy.

One being a traditional style home and the other by a designer that seems to have taken a lot of their inspiration from the Minecraft game.

As for re-sale, traditional style homes have more appeal to a greater number of persons. You may want to think about that if you ever had to sell in a down market.

And yet sometimes the right buyer comes along and you get a high price for the unusual. It's usually those with non traditonal lifestyles that buy non traditional style homes. So there definitely is a market niche- its just a small market.

Marko said...

What do you figure you will spend on your house Marko?

Around $110 a square foot but it is a big house (per square foot cost falls the bigger you go). My dad and I are doing close to $100,000 worth of the work ourselves (for example, this weekend I set aside a few hours for pulling the wire for my in-wall sound system) and I went via the owner-builder HPO route so I don't have any warranty costs or a general contractor. I also spend hours sourcing out deals online. I emailed a bunch of local developers in Victoria expressing interest in showroom kitchens and I ended up picking up $12,000 worth of cabinets and quartz for $1,000 from a developer who was preparing to demolish his showroom space (his project was finished and they moved sales into the building).

For a lot of stuff I just find deals in places you wouldn't expect. I bought 3 of these great Maxx Soaker Tubs for $399 (minus 2% with my exclusive costco membership) - http://www.costco.ca/Maax-New-Town-Soaker-Tub-Left-hand-Drain.product.100009365.html

I think if I did no work and hired a general/builder it would be in the range of $160 to $180 per square foot, but at that point I wouldn't be building.

Building yourself is much like anything in life. You may pay a REALTOR® a commission such as 6%100k+3%balance ($27,000+tax) to sell your $800,000 home at market value or you may do a flat fee listing for $1,500, offer 1.5% cooperating commission and sell your home at $800,000 market value and pay only $13,500+tax in commission.

The vast majority of the population just aren't that savvy, they'll go the 6%+3% route.

Marko said...

Right now I am looking at purchasing hardwood flooring and working through the 496 pages of great information here ->

http://forums.redflagdeals.com/official-hardwood-flooring-thread-522165/

So many great resources out there.

Leo S said...

Thanks, very interesting. Like you said, with anything out there if you are able/willing to put in the work there are large rewards. Real estate one of the biggest areas probably.

I have a long term plan to build as well. When this house gets knocked down in the big one I'll build a new one.

SJ said...

Victoria now has the lowest unemployment rate in the Country (excluding armpit Sask where a handful of degenerates live ;)

http://www.vancouversun.com/business/QuickList+Unemployment+rates+selected+Canadian+cities+January/10792911/story.html

Just Jack said...

What about the Participation Rate?

I haven't been able to find anything recent on those figures.

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

177.6 k employed in Victoria january 2014. 170.8 k employed in Jan 2015. Some much for bullish unemployment rate. Almost 7000 jobs lost over the year.

http://www.bcstats.gov.bc.ca/StatisticsBySubject/LabourIncome/EmploymentUnemployment.aspx

reasonfirst said...

"Victoria (-4,300 or -2.4%) registered the largest decrease..."in employment in BC.

- from "LFS highlights" of above link.

reasonfirst said...

...above was for the month of Jan.

SJ said...

Baah! Most come here to retire, not work. A layed-off boomer from the tarsands ain't going back to work when you consider their pensions, severance and fat bank accounts. They'll cash in their million dollar shack in Calgary and buy a nicer condo in Vic for half price. Come on, that would be torture to live in Canada's paradise and work! Who does that? lol ;)
I actually expect employment will remain fairly subdued (save for retirement fin. managers) as Victoria CMA doubles in population over the next 20 years. A third of Canada will soon be seniors! Having said that, I'll bet you it hits 180k by this summer with the tourism turn-around. If someone wants to work in Vic, it's sure easy to find a job at 4.6% unemployment.

reasonfirst said...

Seeing as we hit 178.4 last summer, 180 isn't a stretch. Too bad 2014 was the worst year since 2006. Not much of a turnaround or do you want to change your estimate?

BTW - between 2013 and 2014 Vic CMA grew by a whacking 0.3%. Guess the boomers are delaying their plans...

Marko said...

Trying hiring quality trades people do to work at reasonable prices...4.8% is still really low in terms of unemployment.

reasonfirst said...

Back on subject: (low population growth) + (declining # of people earning money) = bad for house prices

SJ said...

Not much of a turnaround or do you want to change your estimate?

No, 180k it is. And just like prices were up over last January, I'll bet you they will be up some more by summer, regardless of employment. Retirees typically don't work ;)

Back on subject: (low population growth) + (declining # of people earning money) = bad for house prices

Or not, as Teranet etc show prices have increased since last January ;)

between 2013 and 2014 Vic CMA grew by a whacking 0.3%. Guess the boomers are delaying their plans…

The migration numbers back then show BCers were headed for AB. Now, as the numbers are showing, they're starting to come back.
The retirement Tsunami has only just begun and our US competition is now priced out of the game. This is the trickle before the tidal wave. Join us on the dark side young reasonfirst ;) It was the best decision I ever made a year ago.

Just Jack said...

Last year there were 54 condominiums with age restrictions of 50 plus years sold in the core with 94 listed. That's a sales to listings ratio of 53%.

That's down from 2005 when the BB's were being transferred to Victoria and taking early retirement to be with their grand children when the sale to listings ratio was 100%

I can't find any evidence of BB's coming to Victoria in sufficient numbers to make an impact on our real estate market. However, I do find that fewer BB's are choosing Victoria.

The game seems to be to keep changing who and who are not baby boomers.

Are Mick Jagger and Keith Richards baby boomers?

The Beatles?

How about those that were old enough to be 1960's hippies?

How about Vietnam was that a war fought by Baby Boomers?

If you think that BB's are yet to come to Victoria, then all of those examples would not be baby boomers.

The Baby Boomers are here already that was a contributing factor to the largest run up in prices in history from 2000 to 2007 when they started to turn 55.

It's the first decade of the BB's that cause the radical changes in our society and drove prices up with increasing demand. The last ten years follow a decreasing demand as the don't put pressure on the market to build more.

Leo S said...

Every year the boomers buy less real estate. The few wealthy retirees are offset by the rate of their parents who already live in Victoria dying off.

totoro victoria said...

I find the (strictly observational data) commercial real estate vacancies a bit alarming lately.

If you look down Oak Bay avenue you'll see at least ten for lease or sale signs. Downtown is worse.

Target, Mexx, Sony, Roots, Smart Set, Petcetera, many independents ... who will survive?

If the survivors are big box stores like Costco and Walmart plus online stores and people working from home online instead of offices, what is going to happen to commercial real estate prices and vacancy rates in the next ten years?

SJ said...

Millions of nerds and store owners are about to pack up shop and move to Victopia to run their business online ;) Once home prices quadruple some may even attempt to assimilate with the rednecks of Langford or as I call it Hicktoria (includes most of Esquimalt, V Royal and Saanich West

Just Jack said...

The lower rate doesn't seem to be helping home owners from saving their property from foreclosure.

While the slight drop in the interest rate may spur some real estate fence sitters to plunge into home ownership. The lower rate isn't enough to give home owners enough relieve in their payments. The flat market over the last few years means the real estate ATM machine has just about run empty.

At one time home owners were able to sell the home and pay off the mortgage. Then it became that they would list the property only to find that they could not get enough from the sale to clear the mortgage and the listing was cancelled.

And now it seems home owners are so far in debt that they don't list the property and the home goes into a Conduct of Sale by the court. Having never been listed by the indebted owner.

And Quit Claims are rare. Since most of the homes are insured the bank isn't going for a short sale. The home owner will rack up another $50,000 to $100,000 in penalties, bank charges and lawyer fees on top of the unpaid mortgage.

Just Jack said...
This comment has been removed by the author.
Just Jack said...

For those that may be facing foreclosure, I've put together a list of what will likely happen.

1. Borrower becomes in arears
2. Lender sends a letter
3. Lender sends a stronger letter
4. Lender threatens legal action after about 2 months

5. formal demand for payment
6.lenders sends file to a lawyer
7. Lawyer demands payment
8. Assuming no response, the layer goes to court with an current market value appraisal under normal marketing conditions and asks the judge for "conduct of sale. Borrower may argue the house is worth more and judge normally gives the borrower 3 months to sell the house on their own.
9. house does not sell and the lawyer goes back to courts asking again for a conduct of sale. Borrower opposes again and may get an another extension to sell the house.

10. house does not sell, lawyer back in court and the lender gets conduct of sale
11. some time later the lender gets an offer which the judge present to the court. The owner says it's too low and the judge makes a decision whether or not to allow the lender to accept it.
12. Another offer comes in and the lawyer for the lender again asks the judge to accept it and presents a new accounting which may include a prospective market value assuming limitation in marketing the home and if the offer is insufficient to cover all the outstanding legal fees, realtor costs, mortgage amount, electric and other costs paid by the lender. The request is normally granted and a judgement against the owner for the shortfall which could be 50 to 100k more than the mortgage.

The process can take between 6-12 months depending on the co-operation by the home owner.

Just Jack said...

By now you're thinking that you'll just declare bankruptcy.

Not so fast.

When you make an Assignment in Bankruptcy your affairs are turned over to a trustee. The trustee looks after things thereafter and you remain a "bankrupt" until you are "discharged". The creditors can oppose the discharge until the borrower meets conditions. The judge can order the borrower to pay back some of the debt over time before the judge will approve the discharge.

Bankruptcy is something that you cannot do yourself and you will need to pay a licensed trustee.

If the mortgage is insured by CMHC then they can simply use their collection agency known as the CRA and garnish your wages.

Renter One said...

I got garnished once. It didn't hurt but the parsley got everywhere.

dasmo said...

Bankruptcy rate has been declining since 2010...

Seth Perry said...

"Bankruptcy is something that you cannot do yourself and you will need to pay a licensed trustee." - Just Jack

That's right, you can't just pull a Michael Scott and dust off your hands...

http://youtu.be/HuGIgf-ICHM

Marko said...

Tuesday, February 10, 2015 8:30am

MTD February
2015 2014
Net Unconditional Sales: 118 412
New Listings: 352 1,064
Active Listings: 3,324 3,770

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

Marko said...

I went to book 12 showings for a client flying in from Alberta to buy a house....8 places had accepted offers.

I am expecting over 450 sales for February based on current accepted offer activity.

reasonfirst said...

SJ - I doubt the migration changes are going to see oilsand workers coming to Victoria to work at Starbucks. More likely they will end up in the resource sector somewhere else in BC (which ain't that great.

Maybe some will retire here but that will be offset by the fly-in fly-out workers that are already here and have lost their jobs.

SilverSurfer said...

Leo, I just wanted to say that I wished you'd publish the chart pr0n like the previous post more frequently, like maybe every second or third month at most? Your charts are invaluable to see the visual reality that VREB and the like obscure with fancy words.

My thanks.

Leo S said...

Sure. Only takes a couple minutes to update every month. I don't publish them often because the market has been same old for so long now that they didn't seem to show much new. Can do though.

Just Jack said...

With the high cost of land in Oak Bay along with extremely expensive costs to repair are character homes no longer economically feasible to renovate? Or should they be demolished for new contemporary designed homes?

That's a tough question to answer as you'll find both happening in Oak Bay these days. For an older 2,000 square foot home (not including basement) built in the 1920's that has not had any significant updating over the last 40 or 50 years the cost to bring the home up to good to average condition can be $150,000; $200,000 and more.

At that point the non renovated existing improvements contribute very little as a percentage to the value of the property as a whole and it becomes a flip of the coin whether to demolish or renovate.

And it makes a difference in the value of the property. If the old home is habitable and can be rented then it will have value in the marketplace. If the home is a dump then the property is just land value only.

As land value only the property could have a value of $650,000.

If the current home is habitable then the whole property could have a value of $750,000.

That's the economics of these older homes. Then there is the emotional aspect where a buyer will nearly and have gone bankrupt on renovating these older homes.

As a society should we preserve these character homes and provide municipal incentives to renovate or should we let the bulldozer clear a path for future housing?

CS said...

the cost to bring the home [2000 square feet] up to good to average condition can be $150,000; $200,000 and more.

That's $75 to $100 per square foot for renovation, or about half the cost of new construction. So renovation seems to make sense.

Less clear, though, is the effect on resale value. One might expect a renovated arts and crafts home to be be worth more than a new home of similar size, the latter being constructed chiefly of matchwood, styrofoam, building wrap and other novel products of largely unknown durability.

However, per square foot, new houses in Oak Bay seem to sell at a substantial premium to older homes. Is that because they are usually built to the maximum size that the zoning allows, that they have more bathrooms than bedrooms, or what?

And if there is a new house premium, how long does it last?

Just Jack said...

The cost to repair or cure is only one part of accrued depreciation. Even though you renovate an older character home you can not eliminate all of the depreciation. There is considerable waste of space, low ceiling heights, awkward floor plan layouts that are still left after renovating.

A new home will sell for more than a home renovated to similar modern standards because there is always some depreciation left in an older building.

Usually when a house exhibits 60% depreciation it becomes a candidate for demolition. Anymore increase in depreciation and the home is uninhabitable by most Canadian standards. This would be your rat infested tenement house with blue tarps on the roof. At this point the property may no longer be able to be mortgaged or the bank might only lend on the land value.

When the home become uninhabitable then it shoots from say 70% depreciation to land value less the costs of demolition and removal.

Another factor is the ratio of land to improvements. Even though you have kept your home clean and tidy there comes a time that the depreciated value of your home provides very little to the value of the property as a whole. If your improvements are only say 10 percent of your total property's worth then you're living in a tear down as the highest and best use of the property is for new construction.

That may sound a bit confusing. Here's an example that might help clear things up. You have a 20 year old 1,000 square foot house and your lot has been re-zoned and would permit a high rise condominium. Your 20 year old house is now depreciated by 100 percent. Because the highest and best use of your property isn't a house on a lot anymore.

Just Jack said...

Is there a new house premium?

Sometimes there is. If there hasn't been any new construction for several years and the marketplace heats up fast. Then someone will pay more for a completed new house than one that they may have to wait 6 or 9 months to build. There isn't a premium when there are lots of listings of 1, 2 or even 5 year old homes. Competition removes the premium.

Recently renovated character homes do get a premium, because there are so few of them. That premium may be 2, 3 or even 5 percent and only last as long as it takes for you to move your furniture into the home. If you buy a recently renovated character home in Oak Bay for $900,000 and have to sell 6 months from now, you're looking at a price of $850,000 to $875,000 as a re-sale.

Just Jack said...

266 new house listings in the core over the last 30 days. With 101 home sales over the same time period. That's having the affect of pushing up our months of inventory into the low 4's.

That's still means a short supply of homes to buy, we won't get into a bear market for detached homes in the core until we pass 7 months of inventory. And prices won't start moderating downwards unless high inventory can be sustained over several quarters.

There doesn't seem to be any relief in core house prices for those wanting to buy in the next 90 maybe even 180 days.

On the flip side, if you're a home owner waiting for home prices to rise, you're likely to get your best price in the next 90 days before inventory catches up.

Just Jack said...

The storey is reversed in the Westshore as the lay-offs from the oil industry are being felt first.

Inventory is over 8 months now with houses being added at the rate of 3 new listings for every sale.

Time to cut bait if you're trying to flog an investment property in the Westshore. Your best and likely only offer will come within the first three weeks of the listing.

SJ said...

Victoria & Vanc are now leading the country in prices increases. The Teranet index shows prices increased a full percent in January.

Just Jack said...

Those Teranet numbers are they for condos or houses? The core or Westshore? High end or low end housing?

The way I see the real estate market is that we don't have one market acting in a unified manner. Instead we have several different markets that can be increasing or decreasing at the same time.

For example here's the data for Oak Bay median prices by year. That certainly doesn't seem like an increase to me. Or are the Teranet numbers so over generalized that they have little relevance.

Primary Year Sale Price, Median
2012 $745,500
2013 $750,000
2014 $778,400
2015 $752,000

The Teranet numbers are at least something but it's still like driving in the dark with only one headlight working.

SJ said...

I guess TD knows their stuff ;)
Housing markets in British Columbia are likely to be among the best performing in 2015...
Going forward, British Columbia’s key markets will be supported by a combination of solid economic growth and rising population in-flows from Alberta.

http://www.td.com/document/PDF/economics/special/RegionalHousing_Feb2015.pdf

Leo S said...

I guess TD knows their stuff ;)

They don't. But they are paid to make predictions, so they do.

fatjay said...

Anyone have an opinion on what 2080 Pauls Terrace is worth?
MLS #: 343747

Thanks

Just Jack said...

A real estate agent shouldn't comment on another agent's active listing as this would likely be considered unprofessional conduct. Unless they have a working relationship with the prospective buyer.

As for an appraiser, I wouldn't comment on a specifically identified singular active listing in a public forum. It isn't fair to the home owner. Besides this is how an appraiser gets paid by giving a market supported opinion of the property's worth.

Fatjay, if you're looking to purchase this property you may want to call an appraiser and ask them to do a "desktop appraisal" before you put in your offer. I charge $99 bucks and another buck for the electronic transfer. It takes about an hour or two and you'll get a PDF file sent to you. You get a sampling of pertinent house sales, an analysis and an unbiased opinion.

Could be the best hundred bucks you'll ever spend before you start negotiations.

Marko said...

I can't comment either on value but even if I could I wouldn't as I haven't been through the property.

What you see online is usually totally different from how the property shows in real life yet my client’s email me all the time on properties I haven’t walked through, "what do you think it is worth?" How am I supposed to know, haven't even seen it!

dasmo said...

620k

Just Jack said...

Marko's right, the pictures and data may not be accurate. They usually show only the best of the home and leave out the less than ideal. So you can't give a precise amount like $620K. You have to show a reasonable range and let the prospective buyer make their own decision from there.

You can verify information, show the median price for similar properties in the neighborhood over the last 12 months and the low to high range. You can show the sale to assessment ratios for similar homes as compared to this property's current assessed value. You can trend the last sale on the street of a similar home or in the complex using a median analysis. You can trend the past sales of the property itself. Then you can show a sample of sales that have recently occurred. And bring everything together in a reconciliation

At the end of it all you get a range in value supported by all of the above.

Then you have to look at the market for this type of property to see if it is a buyers, balanced or sellers market. That would give you an indication of where you may want to bid on the property at the low end, middle or high end.

At the end of the process you are now a well informed buyer with lots of information you never had before. That will give you an advantage in the negotiation. It's your hold card that you keep close to your vest.

The purpose is not just a number, the purpose is to inform the buyer. Quick, confidential and unbiased.


....and cheap too. So it won't break your bank account if it turns out you don't want the property.

Lenders use these type of reports frequently but they are rarely offered as an option to the general public.

dasmo said...

580k - 640k

SJ said...

Looks like the twin towers are a go.

http://www.timescolonist.com/business/plan-for-two-towers-on-douglas-st-gets-enthusiastic-approval-1.1763149
The 287,000-square-foot project at 1515 Douglas St. will include 254,575 square feet of office space and about 32,400 square feet of ground-floor retail and commercial

Jerry Neudorf said...

Just Jack -

How do we contact you for the desktop appraisal?

patriotz said...

Anyone have an opinion on what 2080 Pauls Terrace is worth?

Google reveals a rental ad for this property a couple of years ago. So it seems what we have here is an investor bailing.

$2000/month

"Three bedrooms (one used as a den)". I think that means the third "bedroom" is really too small to use as one. Note this honesty is missing from the sales listing.

As to what I think it's worth - well whatever you can buy it for and rent it out at a profit. But you know that.

totoro victoria said...

The fact that a bedroom is used as a den has nothing to do with honesty. The size is identified as 10X9 on the listing.

The issue is whether the room has a closet. This is what determines whether it can be listed or identified as a bedroom. I don't know if it does.

Just Jack said...

What is or what is not a bedroom.

Most believe, as I do, a closet differentiates a bedroom from a den. Yet many turn-of-the-century homes did not have closets. Instead these older homes had armoires. Are they bedrooms then or just a heck of a lot of dens?

I remember having this discussion with a developer when he was building condos. He was advertising these small units as two bedrooms but the second room, with a closet, was so small it could only be used as computer room. His explanation was that people bought based on the number of bedrooms not the square footage. I disagreed.

I think you have to use your common sense on this loose definition when it comes to older homes.

As for the Desktop Appraisal, there are some restrictions that apply. They are common sense restrictions so that the report is not misleading and the information is relevant to your needs.

I don't advertise on this blog and don't want this blog to become a vehicle for my own financial gain.

You're best is to call around to the appraisal companies and ask to speak with an appraiser about desktop appraisals. Eventually you and I will speak. At the same time you'll hear what other appraisers have to say.

Then we can build a business relationship from there or you can chose another appraisal company. I enjoy what I do for a living and only work for people I like. I provide an honest days work for an honest days pay and I expect the same ethics from my clients.

totoro victoria said...

The question is what the MLS listing rules say which usually reflect the local zoning criteria and the building code requirements.

I know the MLS rules do state that if advertised as a bedroom the room must have space for bedroom furniture and to store clothes. There must be an opening window of adequate size.

I don't know if there is a guideline on closets as I don't have access to the full rules. I was told by a realtor that rooms needed to have closets to be listed as bedrooms on MLS. Maybe that was incorrect.

dasmo said...

There is what it's worth and what others can and will pay for it... You would not find a single house in Victoria that will rent at a profit but plenty of people buy them...

dasmo said...

An appraisal will just be an arbitrary number if your head is not in the game. What's more important is figuring out what you can afford with headroom for the unexpected. Then figuring out what the place your interested in might sell for. You can simply go to evaluebc and get comparables. Look at those comparables yourself. Both sold and assessed. Consider the market conditions. Consider the listing conditions. Is it fresh? Has it been sitting stale? If you are serious about a place then the next thing is getting as much real information as possible. This is guarded by the cartel. How long has it been on the market, has there been price drops, re listings, prior sales history, renovation history, neighbourhood info etc. What is the sellers position. Do they owe a lot, is it an estate sale, is it a flip. A brutal home inspector is key. It's good to know what your actual cost will be. Get as much information as you can and think for yourself... If you can't do that I would not go about borrowing half a million dollars....

Just Jack said...

Interesting that you mentioned e-value BC, because I use that information as a cross check to my house measurements.

I had the chance to speak with the lady that inputs the data for BC Assessment and asked her how she gets the information. For newer homes, the measurements are from plans. Older homes are from the field notes of the assessors. That provides a good cross check to my measurements.

But, e-value's measurements can be wrong. If the builder altered the plans during construction or the home owner has added an addition, enclosed a sunroom or garage.

The e-value BC records can and will often be out of date. I doubt if an assessor ever goes through the same house once every 25 years.

As for the sample of properties that sold. They're not a good selection of properties for you to use to determine any reliable analysis. BC Assessment didn't rely on those sales to determine the assessed value, so I don't even know why they show them. Except maybe to baffle the home owner.

Of course if you still don't believe me. Then compare the e-value' measurements to a couple of current listings and you can see for yourself.

But in the world of due diligence, an appraiser should cross check every thing he or she does by a third independent party. And that third party is e-value BC as it provides a test to see if the appraised value is fair and equitable relative to the assessed values of similar properties currently trading in the marketplace.

Sometimes it isn't. And the appraiser should explain to their client that they should appeal the property taxes. I've done this twice in the last 30 days in my reports. The tax savings this saved the client in one year more that paid for the appraisal fee.

When you ask your uncle Bob what your house is worth that's an arbitrary opinion. When you have your house appraised that a "supported" opinion.

For some of you, that may seem a subtle difference. But when it comes to court it means everything.

dasmo said...

Evaluebc is the only place where you can find actual sale prices online... It's only for the last year but it's something and it's real. They should pass a law that all sales and lisring data should be public. Zillow in the US puts it all out there. Much more transparent.

Leo S said...

The sold listings on evalue seem to be a bunch of places in the neighbourhood, not comparables.

Just Jack said...

It is public. You can get that information at the land registry.

Just don't expect to get if for free.
That information costs me about $3,000 a year.

How deep are your pockets?

dasmo said...

That does not mean it's public... I mean public as in published. Evaluebc is a smattering but it's all there is that is public. Otherwise you are having to ask the cartel to give you a tiny morsel of information....

dasmo said...

Plus the public doesn't know the secret handshake obviously since a title search gives you none of that info. What do you need to ask for?

Marko said...

Why just not email a REALTOR®? For example, I can email a list of every single MLS® sale (including pictures) in Gordon Head in the last 5 years in less than 30 seconds to an email.

Marko said...

Monday, February 16, 2015 8:00am

MTD February
2015 2014
Net Unconditional Sales: 226 412
New Listings: 587 1,064
Active Listings: 3,401 3,770

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

LeoM said...

Closets? When is a bedroom not a bedroom?

In the early days of Greater Victoria a homeowner's property taxes were partially based on the number of closets and their size. Builders and homeowners minimized closets to help minimize property taxes. That's one reason why older houses have only a few small closets and why many bedrooms don't have a closet.

Just Jack said...

I hadn't heard that closets were taxed before. However, I understand basements were taxed and that's why character homes had low ceilings of 6.5 feet in what we now call basements. They were considered simply as storage space and not basements and not taxed.

Although this doesn't explain why character homes in other cities, provinces and states didn't have closets and full height basements?

Properties were not taxed on their values back then but on their physical attributes. Each city had their own assessor back then too.

It wasn't until the early 1970's that we had a provincial assessment system based on market or actual values. An expensive system that values every property in BC every year. Then your City hall scrambles to change the tax rate against the new values to meet the budget. Anyone who ever wanted to find someone to talk to about why they are being taxed so much quickly find out how they can be bounced back and forth between BC Assessment and City Hall.

The actual value systems works well except it does penalize those that improve their homes and rewards others who let their homes deteriorate with lower taxes. It isn't the only property assessment system but it seems to be the most popular.

dasmo said...

So 1.99% fixed rate mortgages seem like a sure bet right now. If Bond yields stay this low for much longer. Typical spread is to add 1.5%. 3-5 year BOC bond yields are at 0.42%....

Just Jack said...

There are 33 homes listed for sale in the core districts for under $150,000.

The cheapest is a 960 square foot manufactured home on a pad at $69,900 in View Royal. At a time of the lowest interest rates you can still own -if your over 55.

The cheapest strata condo is listed at $115,000. It's within walking distance to downtown and has a view.

Too proud for a Hillside and Douglas wood frame condo. Well go hi-rise and concrete with a southern exposure and water views asking $123,000. It's a leasehold condo - but if the reason you came to Victoria was to find a warmer place to do the final swan dive from 18 floors this should do you fine.

The cheapest strata titled 2 bedroom condo is a court ordered sale along Tolmie Avenue at $145,000. No 18 year olds or younger allowed. (incidentally the second bedroom doesn't have a closet) yet the unit is 894 square feet. I'm expecting this one to get bid up over list price as this is the same price the condo was bought for in May 2004. But what the heck put an offer in and wait and see.

Your selection is a little better in the Western Communities with 46 listings under 150K.

Single side manufactued homes begin at $29,900. No age restrictions and it backs onto acre and acres of farmland. And it's in Sooke Village.

If living full time in Sooke is not your style then spend one out of every 4 weeks on Bear Mountain for $39,900. A quarter ownership in 1,037 square foot condo and you get a break on the green fees.

How about an ocean front strata along Kaltasin at $109,900. Swimming, kayaking, crabbing, sailing and hiking all at your front door steps.

Want something cheaper than rent! How about a condo across from the navy married quarters in Colwood at $120,000. Bought 23 years ago for $70,000.


The cheapest house in the Western Communities is in Port Renfrew at $229,900. A short stroll to the beach and some really great fishing. Clean it up and rent it to American fisherman as a five starfish destination motel. Stock it with Jack Daniels and they'll never know the difference.

Otherwise you'll have to pay $250K for a 1600 square foot rancher on a half acre with a double garage in Sooke. In 2012 this property was assessed at $427,000.

There are always great deals to be had.

«Oldest ‹Older   1 – 200 of 210   Newer› Newest»