Wednesday, March 18, 2015

March 16 Market Update

MLS numbers update courtesy of the VREB via Marko Juras. These numbers are for the Victoria Real Estate Board's reporting area, including Sooke, Shawnigan Lake and the Gulf Islands.


March 2015
March
 2014
Wk 1Wk 2Wk 3Wk 4
Unconditional Sales132
307


575
New Listings396707

1286
Active Listings35623633

4050
Sales to New Listings
33%
43%

45%
Sales Projection--675


Months of Inventory
7.0


More listings than last year, but even more sales.  Last year this week we had only a 39% sales/list ratio.   

176 comments:

CuriousCat said...

Remember the Rena Virk murder and how the kids that killed her were from dysfunctional families. You don't find that on the East side of town as much because educated parents can afford more expensive homes in higher socioeconomic areas and they instill discipline in their children.

I wasn't here for the Reena Virk murder but a quick google search reveals the "Shoreline 6" were so named for the fact they all attended Shoreline Middle School, which another quick catchment search reveals those students come from View Royal, Esquimalt and Craigflower neighbourhoods. Not quite Gorge/Tillicum, but nice try.

Let's do a little comparison between Gorge/Tillicum and GH. Looking at the nifty "demographics" tab, I'm using two properties that are listed for the same coin: mls 345606, listed at $540k and MLS 346361 in GH listed for $539,900. They both have the same population (600) and percent of households with kids (55%). However Gorge has 62% of the population with some education beyond high school while GH only has 53% with education past high school. In the Gorge neighbourhood 57% are either married or common-law and in GH it's 44%. The average household income for Gorge is $78,465 and for GH $72,667.

vicre said...

Some friends of mine whose families lived in the gorge Tillicum area went to shoreline - its part of the catchment area. I was born and raised in Victoria and my family has owned rental properties in various areas of town.

Gordon Head has a lot of rentals to students hence singledom and lower income average. Several of our Chinese friends own multiple rentals to Uvic students. I'm sure there's many more in GH county.

vicre said...

Some friends of mine whose families lived in the gorge Tillicum area went to shoreline - its part of the catchment area. I was born and raised in Victoria and my family has owned rental properties in various areas of town.

Gordon Head has a lot of rentals to students hence singledom and lower income average. Several of our Chinese friends own multiple rentals to Uvic students. I'm sure there's many more in GH county.

vicre said...

The Gorge waterway is definitely a very beautiful sheltered waterway and is underrated. I think the reason why is that there used to be a lumber mill owned by Herb Doman and the pollution was quite noticeable. The Jawl family bought the site as a 100 million dollar development back in the 90's. Mohan Jawl the youngest of the four brothers actually worked at the mill at night as a teenager. The area, known as Selkirk, has been cleaned up quite a bit but it is like putting Mercedes wheels on a Hyundai. Sorry if Hyundai owners are insulted, not my intention. This city definitely needs better architecture for new buildings-just look at the Atrium on Blanshard.

CuriousCat said...

Some more interesting facts from those two comparables:

- 74% own their homes in Gorge/Tillicum while only 45.5% own in GH.
- 82% identify English as their mother tongue in Gorge/Tillicum while only 60% claim that in GH.
- 22% of children 20 years+ living at home still in Gorge/Tillicum but 26% in GH.

The house on Obed is much closer to Tillicum mall, Uptown, Mayfair and Downtown and has better access to the Westshore. And it's just nicer! Can't say I see the appeal of buying in Gordon Head unless your goal in life is to rent part of your house to students.

And Reena Virk was mainly connected to those kids through the youth group home she lived in. Do you know for a fact where that house was? The boy who murdered her lived in a trailer park by himself as his father had moved to the states. I don't know of a trailer park in the Gorge area.

You are the one who implied people that live in the "east" have the financial means to buy more expensive homes and therefore have more disciplined kids and don't have dysfunctional families, though the stats prove that Gorge/Tillicum has a higher average income, and a higher percentage of stable two-parent households. If you are going to make such a bold claim, then back it up.

CuriousCat said...

I think the Atrium is very nice! I have been inside and it's quite impressive. The Jawls have done a lot of good in this city.

vicre said...

CC You've got good taste as the Obed house does look a lot better. As for the demographics I don't know what to say as I don't know how the data was collected or how big or thorough the sample was but I will give it to you as I'm easy going. Congrats.

I do like the office building architecture of the first half of the century- a lot more character and traditional looking and a warm feeling not to mention grand.

jwalbren said...

As I said in an earlier comment that was made fun of... "more listings and more sales = a hot market".

A hot market is one with sellers and buyers both motivated to sell/buy.

Lots of listings make people come out of the wood work to sell their house and hopefully find something better.

Last few years, hardly any houses came on the market, so people were holding off on selling because if you sell, you are stuck with no decent buying options afterwards...

I think this will be the biggest market upswing since 2005.

Numbers Hack said...

@ Curious Cat

https://www.crd.bc.ca/education/our-environment/harbours/gorge-waterway/history-uses

Kind of confused as why the Gorge Waterway, at one time during the turn of the century was the playground of the rich. Clean water, good for swimming and sheltered from the ocean.

Driving down the Gorge, there are still some majestic homes from days past after you cross Tillicum road on Gorge Road.

But prices average 400K to 500K wherease GH it is 500K to 700K and in Fernwood, Cedar Hill, etc...are much more.

Gorge is:
- closer to downtown
- closer to big box stores
- and has a beautiful waterway and parks

I wonder if the reason prices are relatively cheaper because of the working class community that sprung up during the 1920s to 1980s?

Very SURPRISED that the area is not commanding higher values because of those reasons. Plus Tillicum Mall is the only place in the core with a decent Movie Theater!

Some MLS listings less than $400K right now for SFHs than seem like quite the bargain relative to other core areas and would make great rental properties IMO.

Wonder what is keeping prices depressed? Stigmatism?

Chris said...

Gorge is discounted for location and age of homes. Your best chance of seeing a swat team in Victoria with shotguns drawn is driving out of downtown along Gorge. The druggies and hookers have to do there business somewhere. Tillicum to Admirals location is better, however you really don’t want to be anywhere along the escape route between downtown and transCanada highway. These areas suffer the highest crime rates.

The other discount is the age of homes that come with all the problems of oil tanks, cracked foundations, asbestos, wiring issues, lead, rusted cast plumbing and the list goes on.

totoro victoria said...

I think the Gorge area has a lot to recommend it, particularly now that the waterway has been cleaned up to the point where you could swim there in the summer.

My grandparents lived on a waterfront property on the Gorge in the 1940s and they loved it.

The thing I really dislike about the Gorge area are all the seedy motels that are rented out by the month in winter to a transient population. They line gorge road between Douglas and where Fairway Market is. Above that it is pretty charming.

Gorge Park has a vagrancy problem and there is a problem with assaults, vandalism and theft near the Cedar Shores complex.

Residents attribute the upsurge in criminal activity to the drug houses on Irma Street and Harriett Road. There is also the homeless shelter/streetlink that was put at Ellice Park.

SJ said...

It can be a very costly area to own, as the former owners on Adelaide Street (nicer area of Gorge) found out. On the hook for half the clean up of leaking oil. The cost could go as high as $120,000 and she hasn't even owned the house for 13 years.

http://www.timescolonist.com/news/local/former-homeowners-must-pay-for-oil-tank-leak-in-saanich-1.1770366

totoro victoria said...

Oil tank leaks can happen anywhere.

http://www.timescolonist.com/news/local/home-heating-tank-leaks-oil-into-swan-lake-sanctuary-1.64905

CuriousCat said...

I agree that the area west of Tillicum Rd, all the way to Admirals, with Gorge to the south and the mall and Colquitz park to the north is the "nicer" area and maybe that is why the demographics are the way they are. A couple months ago I went thru a house an acquaintance bought on Donald right next to the apartment or condo building and the location did not feel as "safe" or nice. She said her son's bike had been stolen from the front yard. This would probably happen anywhere (stupid kid) but things like this help to form a person's opinion of an area. Sometimes some areas have nice pockets of streets, but it's not enough. An area that I first had that opinion of was the area from Hillside to Bay, Quadra to Cook. I would definitely prefer to be on the north side of Hillside vs the south side. The area might have changed however in the last 10 years however from when I lived there.

CuriousCat said...
This comment has been removed by the author.
SJ said...

Oil tank leaks can happen anywhere.

It helps if you first you have an old buried oil tank ;)
Newer areas like Gordon Head (developed 60s/70s) have hardly any.
Gorge, is full of them. They didn't even come out with above ground tanks until ~1960.

dasmo said...

The Gorge used the stink! It is a geological jewel and THE best place in Victoria for thousands of years. It turned as industry moved in to put a barrier between us and them and to kill their paradise food generator... You could have bought some nice waterfront in the 80 just before they stopped pumping raw sewage into it... Those deals are done. Good property actually on the gorge is not cheap now that it's no longer toxic. You are even allowed to swim in it again!

Numbers Hack said...

This is MLS Gorge listing that looks interesting, might throw in a low bid :)

http://www.realtor.ca/propertyDetails.aspx?PropertyId=15418748

From Harriet to Tillicum looks like a decent area. Close to schools across from the Gorge Park. Lots of condos, they are all 230K+ for 2 bedrooms. You can have house for a tad more.

Regarding crime, it is prevalent everywhere, all the homeless people blocks from the Empress, now that is a disgrace to the city.

Numbers Hack said...

Check my arithmetic on Gorge property:

1/ 420$K
2/ 25% down, mortgage 75%
3/ 1400$/month mortgage
4/ 600$/month Prop Tax + Deferred Maint.
==============================
Rent:
1/ 1200$ top
2/ 900$ bottom
==============================
Up about $100/month. So getting 1.2% on my 100$K investment and YoY asset appreciation (if any)and have a barely livable house in 25 years...but will still have land value :)

DavidL said...

@Number Hack
Check my arithmetic on Gorge property ...

What about the lost opportunity cost on the $105K put into the down payment? If well invested with an average 7% annual return, that $105K could compound to $570K after 25 years.

Jack Macdonald said...
This comment has been removed by the author.
jwalbren said...

All this 'lost opportunity' talk.

Do you guys not understand that 'lost opportunity' is the theoretical use of 'extra available cash' that 'would theoretically be available in another situation'.

First of all. You have to live somewhere.

Second of all. It is cheaper long term to buy then to rent. There is not a single example in Victoria of renting being cheaper long term if you were to buy a place that fits within your means.

You can buy a house in Victoria, with a small 5% down, for around 360k.

You can't rent that place for less then a mortgage, and there is 'equity' being built every single month.

I mean it is crazy to think that renting is financially smarter then owning. Especially if you have a family and need a quality of life and room to grow.

A single guy in a condo or basement suite (which I suspect is Just Jack and a couple others in here) are still over paying for rent.

I would agree that renting would be a smart decision IF there was a wide supply of quality homes in safe shape, for much less then a mortgage minus the equity.

Mortgage payment of 2k on a decent house.... thats only around $1200 a month in interest payments.... try to find a house in Victoria for $1200 a month.

The basement dwellers are too stupid to realize they are paying each month more then someone who is owning a house and building equity.

jwalbren said...

The other thing that I finally realized was bugging me is this entire concept that life is all about the small % of theoretical monetary gain by renting over owning a home.

What the fuck.

Let's talk about 'life'. How fucking sad is it to come on here year after year, and spout seething resentment about people that buy a home.

A home is where you feel proud about what you have accomplished. You raise your family and you connect to the community. When you own a home in an area with other home owners, you become part of the neighbourhood watch, you share your vegetables you grew in your garden with your neighbours, or borrow a wheelbarrow or just ask for help with little things. You email your neighbours to check up on your home when you are away on vacation.

There is a real sense of being invested in a community, a sense of autonomy that no one is 'reigning over you' and the 'stability' to stay in one location for as long as you want to.

Life is very short, there is no guarantee of anything, but building a family, connecting with your neighbours, developing a network of caring friends and having a 'home' is one of the most basic joys of living life as a human.

If you work hard and save and really go for the 'risk' of buying a home, the rewards are many many times that of a small % of theoretical monetary gain when and if you reach 65 years old.

The financial tools that you gain when you purchase a home are also very powerful tools to help you and your family manage emergency situations.

By paying more each month into a home then the interest payments, you are paying into a HELOC.

With just a few years of owning a home, you most likely can have access to your own money again at a very low rate. This ability to tap into your own equity and use it to smooth out rough spots can make the difference long term of going bankrupt or riding out hard times. That alone is worth every single second of home ownership.

With inflation, after just a short 10 years, your monthly payments are lower then they were 10 years ago, it just gets easier and easier.

So sad the argument of 'lost opportunity'... what about the lost opportunity to be a part of a community.

Just Jack said...

The Gorge is a very homogeneous housing neighborhood. This is the frequency table for housing over the last five years. A very symmetric graph where the mode, median and average are very close to each other.

$200 - 300 1
$300 - 400 48
$400 - 500 117
$500 - 600 76
$600 - 700 8
$700 - 800 3

Because of the lack of variety in homes in the neighborhood, you'll find people leaving the area as their incomes and family size increases. The people basically outgrow the neighborhood and move on to hoods with houses that meet their needs.

In my opinion, if we hadn't had the expansion of the sewers into the western communities most of these homes would have been demolished and contemporary style homes built. Similar to what happened to Vancouver in the 1980's when a lot of Vancouver Specials were being constructed.

Unless the local government spends tens of millions of dollars in upgrading the infrastructure or we have a boom like the early 2000's this area will remain unchanged.

The median price for a home in the Gorge is around $470,000. That puts most of the neighborhood into the first time house owner to middle income range. A working class or blue collar neighborhood.

Introvert said...

A single guy in a condo or basement suite (which I suspect is Just Jack and a couple others in here) are still over paying for rent.

Unless my memory is the worst, and unless his situation has changed, Just Jack has kids and rents a house in Oak Bay.

Why he doesn't pack up everything and buy an affordable property in the paradise location of Langford is anyone's guess. After all, the school system in the Western Communities isn't the least bit overcrowded (Belmont is begging for more students, in fact) and the commute into town is no biggie. Also, what wife wouldn't want to "move up" to Langford? She's probably growing weary of the ramshackle old place they're in now, behind that nasty Tweed Curtain.

Marko said...

Last 24 hours showing 42 sales and only 52 listings. Last 10 sales reported this afternoon, 5 at or over asking.

1029 Torrance: $549,900/$549,900
318 Irving: $775,000/$800,000
37 - 3987 Gordon Head: $335,000/$335,000
2214 Edgelow: $759,900/$790,000
1606 Davie: $729,900/$750,000

Just Jack said...

Interesting thoughts you have about opportunity costs.

To rebut your sophmoric views I would like to introduce you to:

Adam Smith
David Ricardo
Karl Marx
Irving Fisher
Fredrich Hayek
John Mannard Keynes
Milton Friedman
Ardo Hansson

and the entire graduating class of the Harvard School of Economics.

https://www.youtube.com/watch?v=75AHQKBJ1w0

jwalbren said...

The main issue with your adamant rent vs buy argument is flawed.

Those arguments are for markets with a balanced rental market that is below cost of ownership.

The issue is Victoria does not have affordable safe houses for rent.

It also does not cover the 'many' tangible lifestyle improvements that I covered above.

Renting and having to move every couple years with a young family is toxic. Trust me I moved constantly growing up because my dad refused to get a better job or get focused and save up for a stable home.

No wonder you are angry, renting in Oak Bay lol... thats gotta be hard, it's super snobby there.

Maybe you are one of those big ego guys that thinks he deserves to live in Oak Bay and have the 'respect' that comes with that, but you just 'cant' make enough money or are not smart enough to actually afford to live there.

You could easily buy a house for under 400k in Jubilee area of town... its just a couple minutes away, its the poor mans Oak Bay, and a fantastic area... I know a couple that bought a house there for $370k and are raising a family... they have single income and its not that much... no reason to not buy there.

Marko said...

While I haven't had any issues renting for two years at this point in my career the safety net of owning and not having the risk of having to move on two months’ notice is worth at least $10,000 to $15,000 a year.

Bman said...

Since when does Victoria not have affordable, safe houses to rent?

mooselessness said...

@jwalbren, you're still allowed to borrow a wheelbarrow and makes friends if you rent. And you can still be a grouch if you own.

You wrote "There is not a single example in Victoria of renting being cheaper long term if you were to buy a place that fits within your means."

I plugged in my family's current rent and the likely 740K value of our house, along with a 3% mortgage (4.5% in 2020), 5% down, a 4% after tax investment return, and 2% annual house appreciation. If you live here for 20 years and then sell, renting is still ahead by $33,000. (Close enough to be a wash, given the unpredictability of the numbers.)

I'm not sure what your $360k house would rent for, but you can use the File menu to copy the sheet and enter your own numbers:

https://docs.google.com/spreadsheets/d/15xTbkE7faHFhTpAC8tIcAsCsRMTyIONrhy4a0jCI68I/edit?usp=sharing

I'd suggest that few people argue renting is going to be better forever. Most pro-renters I know recommend it as an option now, because Canada's housing and economic situation seems sketchy and maybe your buying dollar will go further in the future.

Bman said...

Also, where are these sub $400,000 houses in Jubilee? Sign me the fuck up. Also, sign me up for the mom and dad down payment so I can get one on a single income.

nan said...

@ jwalbren

I have said this many times before. There are many possible scenarios where renters come out ahead of owners - in fact at today's prices, unless you need a three bedroom plus space for a family I would argue that most renters in Victoria would accumulate more wealth over their life times while renting and accumulating a diversified portfolio than they would owning a house.

Do most renters do that? Nope. Most Victorians don't have the perspective to consider stock market investing an alternative for wealth accumulation which is why housing is so widely socialized as an unbeatable "you can't lose" investment.

Whatever the case, it doesn't make the math wrong.

To your point that it is a small % theoretical gain, in some scenarios it can be. In others, it can result in literally millions in extra wealth.

For example, my wife and I rent and invest. We have accumulated over $300k over the last 7 years by renting and investing. If we had bought a house, we would have accumulated no capital gains over that period and maybe 150k worth of equity. So lets be conservative and say that only $100,000 of the $300,000 we have accumulated is incremental to our decision to rent. In 30 years, that $100,000 will be $1,750,000 nominal or $660,000 real @ 10%nominal or 7% real rates of return.

That is neither theoretical or small. It is a life changing amount of money and we will have it because we had the foresight to see that houses were overpriced at the time.

The best part of math is that it doesn't judge. It doesn't care what you think, it just is.

S-J said...

"Unless my memory is the worst, and unless his situation has changed, Just Jack has kids and rents a house in Oak Bay."

I think it was "a simple man" who had kids and rented in Oak Bay.

SJ said...
This comment has been removed by the author.
CuriousCat said...

@Number Hack

That house on Orillia is WEIRD. Sure the pictures show an updated kitchen, wood floors, nice enough exterior, new windows, but what is up with the layout?? Even the person who created the floorplan didn't know what to call the waste of space where the spiral staircase is, so decided on "Area". The master bedroom looks like it wouldn't fit much furniture, and has the bonus of french doors leading into it, meaning no privacy. The listing says it has a gas fireplace but looks like a wood stove to me.

Oh and let's not forget the loft bathroom, I mean "bedroom". Everyone wants a sink and tub in their bedroom, right? Because in the middle of the night, I might need to suddenly wash my hands. Or take a bubble bath. Let's not overlook the little hobbit door that leads to a deck, that leads to a flat roof. (is that even legal?? don't we need railings at that height?) What happens if your tenant in a drunker stupor after having puked in the clawfoot tub decides to go outside for some fresh air and just wanders right off the ledge? Are you liable? Cause I'm sure a nice tenant with kids won't be putting any children up there!

And $900/mth for the tiny suite in the basement? Is that really what people are paying? That is sad.

Seriously that house is messed UP. What were people thinking? No homeowner with a "young family" would buy this house with the "unique" layout. Tenants have lower standards, but you'll need to sell it eventually. Good luck with that!

SJ said...

I think "a simple man" was also a smart man, as he bought before the next ~10yr up phase for Vic. Or what I'm dubbing, the boomer tsunami wave, dude ;)

I found it slightly comical today when I realized that Patriotz after ten years finally bought in the city that's now leading the country in Teranet price declines (Ottawa).

dasmo said...


Purchase Price: $420,000
Equity at Purchase: $105,000

MORTGAGE CALCULATIONS
Loan Amount: $315,000
Down Payment (25%): $105,000
Closing Costs (1%): $3,150
Cash at Closing: $108,150
Mortgage Payment: $1,492
Mortgage Payment (Yearly): $17,904

PROPERTY CALCULATIONS (Per Month)
Rental Income: $2,100
Property Taxes: $320
Homeowners Insurance: $100
Homeowners Association: $0
Property Management (0%): $0
Maintenance Reserve (10%): $210
Vacancy Allowance (5%): $105
Mortgage Payment: $1,492
Other Expenses: $0

TOTALS
Monthly Cash Flow: $-127
Cap Rate: 3.90%
Cash on Cash Return: $14.31%
Equity in Five Years: $185,323

jwalbren said...

Renting is totally fine if you are DINKS.

Dual income, no kids... just like a couple commenters here saying they are renting and 'saving' money by investing.

Try to find a rental with a dog and 3 kids in this town.

Renting is for the poor or DINKS.

Good luck finding a good neighbourhood to rent in and fit in. The best areas are majority owned not rented.

jwalbren said...

It is commical that the founder of HHV complained about the house prices here so much that he started this doomers blog.

Then he finally saved enough money to afford a house in another location, Ottawa... moved there, and is currently under 6 feet of snow reading this blog daily (probably Just Jack) and kicking himself watching house prices go up in the town he really would have loved to live in.

If only he had focused that energy on making a bit more income that could pay for a great lifestyle.

I'm off to the dermatologist this afternoon, have a bit of a sunburn from all the sun we have been having lately and want to get some good quality sunscreen in preparation for the next 7 months of awesome weather.

Bman said...

@jwalbren - Sure, you might have trouble renting with 3 kids and a dog. Of course most people don't have 3 kids and a dog. For most people, renting shouldn't be too big of a deal in this town.
As for your claim that the best areas are majority owned, and not rented, it depends what your definition of "best" is I suppose. There are plenty of desirable areas in the City of Victoria that are majority rented --
56% of Fairfield's residents are renters. Same with Rockland. These are mixed income neighbourhoods. Old people, young families, single people, poor people, rich people living together in the same area. Isn't that good for society?

Leo S said...

As usual, the black and white approach to this question is wrong.
And since when is the founder of HHV in Ottawa? I thought it was alberta.

jwalbren said...

65% of new home buyers are planning to or have kids and pets.

So the 'housing market' is really for families... why in the world would you buy a house if you are just DINKS unless you have lots of extra cash.

Renting is a fantastic option, IF there is legitimate and safe and desirable and stable (not moving around every few years) situations.

I don't see that option in Victoria.

Fairfield is great, but it is 'founded' mostly by families that own their own home, and rent out a small suite... that is a great situation.

jwalbren said...

@mooselessness

Enjoy your 33k extra cash you might have extra in 20 years.

You did not include having to move 10 times during that time.

Moving costs money... so moving 10 times costs say 3k (or much more if you have kids and a dog etc) and you have maybe 3k left over.

I'll pay 3k to not move 10 times and live in a great house without some jackhole landlord leering over my family and kids, and having to beg for little updates or fixes, or having to move suddenly, or have to put up with hundreds of strangers walking through my house randomly when the house I'm in goes up for sale randomly.

Bman said...

I would say that Fairfield is anchored by the 4000 plus purpose built rental apartments, not the 900 or so single family dwellings, some of which have shitty suites with 6' ceilings.

vicre said...

Marko What is driving the market right now. Is it the lower rates. These rates could stay here for quite a while. I remember when Garth used to have a column in the local Victoria news and he said ten years ago that rates couldn't possibly go lower. Even as of today they could go lower further and it will become the new norm.

Maybe in the 90's when a lot of schools had to add portables to handle increased enrollment those kids are now forming households and buying.

vicre said...

Regarding using 100k as a down payment on a rental property, you could probably do better buying 2k shares of a blue chip company getting a 20% overall return with or without the dividend. Not necessarily day trading but short term trades. Theres so many peaks and valleys in a chart in a given year that if you only capture a small percentage of those you should get a good return and if you get stuck at least you get the dividend.

mooselessness said...

@jwalbren, renting from a property management company is actually quite pleasant. But I'm not trying to convince people to rent. If someone is confident they'll want to stay in the same home for 20 years, there's lot to like about buying.

I put up the spreadsheet because in between your sneers and unhappy family memories, you wrote "it is crazy to think that renting is financially smarter then owning." People can try the numbers for themselves to see if you're right or wrong.

n.y.k. said...

"It is commical that the founder of HHV complained about the house prices here so much that he started this doomers blog.

Then he finally saved enough money to afford a house in another location, Ottawa... moved there, and is currently under 6 feet of snow reading this blog daily (probably Just Jack) and kicking himself watching house prices go up in the town he really would have loved to live in."



I think I started reading this blog around the time HHV moved. Pretty sure he mentioned a better job somewhere else that presumably wasn't available here. The cheaper housing where ever he moved to was probably just a nice bonus.

And I can't even remember the last time he commented let alone posted a new blog entry. It's as though he's started a better life elsewhere and forgotten all about Victoria.

Leo S said...

You did not include having to move 10 times during that time.

Not once have I had to move out of a rental. We moved a couple times by choice. It was nice to have the freedom to explore different areas of town before we had to commit. No such advantage when owning.

Also you forget the effect on mobility from owning. Harder to get up and move if you own a house. This is something a lot of workers in Alberta are experiencing first hand right now.

SJ said...

I only got the boot once from a rental of the ~15 or so rentals I've lived... but I probably deserved it ;)

Vancouver now has ~2000 less inventory than last year and with strengthening sales its total inventory seems to have stalled at ~13300, which seems early to be peaking. If it's peaking??

SJ said...

Fascinating stuff when you actually take a look at recent Vancouver prices, they were nearly as flat as Victoria since 2010. That I did not know. Vic/Van much more in synch than I thought.
You can see they finally started breaking out in late 2013 like Victoria did, but since then they sure have been shooting higher.

http://www.yattermatters.com/wp/wp-content/images/2015/03/2015-03-01-Average-Price-Web.jpg


Leo S said...

Vancouver condos have been lacklustre since 2008 but SFHs certainly haven't. They're up almost 50% since then.

Introvert said...

I think it was "a simple man" who had kids and rented in Oak Bay.

Maybe they both did. A cursory Google search yielded one of my own comments from April 2013 that cited JJ as renting in Oak Bay. JJ must have mentioned it at some point. I'm too lazy to actually verify. I'm going to keep assuming so until JJ corrects me.

And since when is the founder of HHV in Ottawa? I thought it was alberta.

Alberta is also my recollection. However, my preferred quip is that HHV moved to Area 51, since he never specified his location and was always extremely cagey about it.

Introvert said...

House Hunt Victoria--unsuccessfully predicting real estate calamity since 2007! Come and join the fun!

SJ said...

Yeah, I guess that's now the big difference between the two...
Van condos are still underperforming houses, while in Vic it's the opposite - condos have been outperforming since 2013. And we all know my theory as to why that is ;)

BillW said...

Just a quick hello from someone who grew up in Victoria and inherited a house. We have been waiting and watching for the right time to sell and move up island. We are only a few thousand off the estimated sale price of our place for it to make sense for us to sell and move to Parksville.

Marko said...

Van condos are still underperforming houses, while in Vic it's the opposite - condos have been outperforming since 2013. And we all know my theory as to why that is ;)

The numbers in Victoria on condos are definitely off. The last two years have seen a spike in high-end condo sales which has skewed everything and unlike homes the HPI Index for condos just doesn't work very well. This is because a 2 bedroom, 2 bath condo can sell anywhere from $180,000 to $1,180,000; whereas, you don't see 2 bed 2 bath houses selling from $400,000 to $4,000,000.

Based on viewing 700 to 800 properties a year and following sales, re-sales, condo complexes, etc., I think single family homes have definitely out-performed condos despite what the numbers say.

Marko said...

Not once have I had to move out of a rental.

Neither have I but the risk is there and I can't afford to take the risk.

In my line of work I see interesting stuff all the time. Last year had a situation where a 7 month pregnant tenant was given two months' notice.

BillW said...

If my pregnant wife had to pack up and move with 2 months notice, that would be a terrifying experience for not only her, but myself.

vicre said...

Since this blog started prices have not gone up. Even in 2006 asking prices were the same so while they haven't gone down like predicted they certainly haven't gone up even as interest rates plummeted.

Will they go up in the next ten years? If you think so then leverage up and snatch up as much as you can. I've thought about doing this but its a lot of work and risk. Better to just try and develop a new app and cheaper without much risk.

vicre said...

Hey JJ where is that coffee shop for 200k and that produces 15k a month. Is that gross or net. Give some more info.

Marko said...

Marko What is driving the market right now. Is it the lower rates.

I don't think it is rates. The small drop got people talking and everyone seems to rush in when they see others buying and talking about real estate.

Two weeks ago I went to an open house with my clients and there were a ton of other people at the open house. My clients ran into their friends and their friends asked them, "are you guys just looking for fun or actually buying." My clients replied with, "we are seriously looking, would like to buy in the next two months," and their friends responded with, "ohhhh....we were hoping everyone here is just tire kicking as we are interested in the property."

The best time to buy was arguably 2013 which also saw sales volume bottomed out.

Prices go up, sales volume increase....or I guess sales volumes go up and then prices go up, but my point is few people buy at the bottom.

It's weird, when I bought my 1/2 acre building lot in late 2013 I thought I was paying too much, but in hindsight it is starting to look like a half decent buy.

Marko said...

Since this blog started prices have not gone up

Condos in Langford, definitely no. Single family homes in the core, definitely up with a large level of certainty.

SJ said...

the HPI Index for condos just doesn't work very well.

Yeah, I'm gonna go with the reliably-designed HPIndex that show condos up 4.4% y-o-y, houses only up 1.3% y-o-y, especially since the identical unit to mine recently sold for 43% more than I paid over a year ago ;) But don't sweat it, I'm sure the house your building will also appeal to the Vic boomer tsunami over the next ~20 years and you shall reap some nice tax-free capital gains ;)

vicre said...

I know a guy that bought a house in 2006 oak bay, piled 40k into maintenance still worth the same, lots of others in Lakehill house that sold 500k, a better house just sold on Mcbriar for the same 515k so I don't think SFH have moved up. Lots of other examples that I could write about. Guy bought house in 2007 Langford just sold last week for same. Houses in Vanalman area same prices. Sum it up since late 2006 prices have not really moved. They may move going forward but prob not double in ten years.


If interest rate were to go up 1% on 5 year it would cause a slowdown but I don't think prices would shrink more that 10% even because if you look at Clagary right now values don't decrease very much. Only time will tell.

vicre said...

Imagine if they started giving 25 year loans for cars or blue chip stocks, those markets would boom like never before. Real estate is like that, why give such long loans, Why suburbia, a piece of land and most people don't even have the knowledge or discipline to keep manicured gardens, marketing brainwashing ( I own a house!)

I'm buying a house with 550k outside my rrsp. I wonder sometimes if its what I really need but you,ve got to go with the flow, feel sorry for all those that pay all that interest just to make bankers and elite richer by the month - its just like renting and pimping your life out.

Truth be told most people just need a place to eat sleep and shit(small condo) but marketing has done a fine job as well as finance.

vicre said...

25 year car loans? Why not., Ferrari testarossas that were going for about 75k a few years ago now fetch well above 200k, so why not finance such things, old 911 from the 70's and 80's also up tremendously. Look at haggerty price charts.

JJ where is that coffee shop, better than "buying" a condo.

The DP said...

Whatever else you can say about the market, it's kind of fun that the blog has picked up with new posters and renewed interest. Last fall it seemed kind of dead in the water.

Where's Info in all this?

Just Jack said...

I'm in agreement with Marko on the interest rates. I would not have foreseen that such a small drop in rates would stimulate this much demand.

Luckily listings have increased which has kept prices from leap frogging substantially higher. New listings for housing in the core are keeping up with demand but we're not adding to inventory.

Can this increase in demand be sustained? Or has this slight drop in interest rates caused us to draw from future sales? Then we could be looking at a future bust in sales if prices went higher or this irrational exuberance continued for very long.

It's a tricky balancing act with the historically most active market, the spring market, beginning on Sunday.

Personally, I see this increase in sales as just a blip and won't have any long term effect. Those thinking of buying are just going to have to be patient and wait out this anomaly happening in the marketplace.

Marko said...

But don't sweat it, I'm sure the house your building will also appeal to the Vic boomer tsunami over the next ~20 years and you shall reap some nice tax-free capital gains ;)

You do know that I own three near new condos downtown?

I wish condos were up as much as you think, but they aren't.

I've been putting deals together at the Era in the last two weeks that are below 2009 per square foot prices at the 834 and the Era is a much better building in a better location.

Marko said...

Wholy crap to some of the sales reported in the last two hours...

2015 Dron listed for $838,800 and sold for $899,300.

3100 Beach Dr listed for $1.35 and sold for $1.45 million.

vicre said...

Real estate and stocks go with how the general economy goes. I bought BMO at $69 in 2007, it is now at $75, wow not even 10% capital appreciation in 8 years but ok dividend, better than interest.

Everyones trying their best to build wealth, why doesn't Kevin Oleary start a show where he helps individuals become millionaires -its very hard, even some of the wealthiest people have had a little luck with their hard work.

Thanx again JJ with your wise vision.

The condo market is doing so poorly that the 2 towers that were to be built at Uptown have been scrapped. Whole foods and a parking lot will go there.

More headwinds for vic re is higher property taxes due to bridge, sewage and 25k just to kill 25 deer while the homeless go hungry and eat canned junk food. Victoria is a beautiful city but run by useless -Fortin, Helps, probably do better with Rob Ford- picture him with a hunting rifle to get the deer cull over and done with for free.

Tren said...

mark

Leo S said...

Whatever else you can say about the market, it's kind of fun that the blog has picked up with new posters and renewed interest. Last fall it seemed kind of dead in the water.

Trying to get in touch with HHV. Wanted to modernize the theme of the blog and update some bits but I only have permission to post articles. Anyone know his contact info outside of the blog email let me know.

Some renewed interest in this topic now that the market is changing again.

Chris said...

I did mention last Fall that this would happen.

The 1986 version of this movie had Victoria rise 175% between 1986 to 1994. I’m not predicting the same outcome, however this time there is the added plot twist of a much larger retirement cohort as well as the much larger and mobile populations of neighbouring provinces. Alberta has 4.2 million people of median age 36.

- after remaining high & range-bound for years oil crashed for similar oversupply reasons to less than half its price in late 1985
- our currency tumbled from above par into the high 70 cent range, same as now
- most resource prices fell sharply between 1981-85, and between 2011-2015
- everyone thought recession as GDP growth dove in 1986, but then the currency kicked things into high gear like tourism, et cetera.
- 1960-born BBs were turning 25 in 1985, their 1990-born BB kids are now turning 25. The difference this time is a far larger cohort of retirees.
- 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% from ’81-85 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.


The only reason skyboxes have bounced hard is because they got hit so hard.

Just Jack said...

I don't know if it was Albertans fleeing west or the boomerang generation leaving the more expensive homes to the less costly apartments and parents homes.

The vacancy rate is only for apartment buildings so it will be affected by those needing low cost housing.

SJ said...

You do know that I own three near new condos downtown?
I wish condos were up...


With all due respect Marko, yes we're all aware you poorly timed your condo buys. Timing is a tough task for most realtors, as they tend to get caught up in the emotions of the market and believing their own sales pitches at the peaks.
And this last bit is equally friendly advice. The boomer segment will begin downsizing next 20 years, but not to as small as 600-700 sq ft units. 1000+ gives you more marketability to all segments.

DavidL said...

@Leo S

According to Google, the househuntvictoria@gmail.com is still valid - but not guarantees that HHV is still checking the account.

Marko said...

With all due respect Marko, yes we're all aware you poorly timed your condo buys. Timing is a tough task for most realtors, as they tend to get caught up in the emotions of the market and believing their own sales pitches at the peaks.
And this last bit is equally friendly advice. The boomer segment will begin downsizing next 20 years, but not to as small as 600-700 sq ft units. 1000+ gives you more marketability to all segments.


Really, so why is it that buildings like the Bayview (large luxurious units) are struggling so much in terms of re-sale? Shouldn't baby boomers be buying them up? Why has the Sovereign struggled?

Why is it that Bosa took a totally different approach to the Promontory (next door to Bayview)? It is interesting that the Promontory ended up being a sales success even though only 1 out of every 10 units on each floor is over 1,000 sq/ft. Guess what sold out first? The studios and the one bedrooms.

Your theories are great, but they are only that, theories.

And yes, I've done so poorly with my condo purchases which has resulted in another poor decision to build a large luxrious custom home on a 1/2 acre which will obviously be impossible to sell down the road, as will be my condso because they are not in the magical 1,000 sq/ft+ range.

Fun fact....my 440 sq/ft Promontory condo (under 200k) rents for $1,150 per month. 650-700k, 1160 sq/ft 2 bed+den units at the Promontory are renting for $2,200 to $2,500. Keep in mind the strata fees are triple as are property taxes. What a great investment those bigger units are :)

Just Jack said...

More likely to occur is that a quarter of the boomers will be dead in 20 years from now. 20 years from now, a boomer born in 1945 will be 90 years old. The peak boomer born in 1958 will be 77 years old.

-Not really the prime real estate buying years. Through death and nursing homes what we will have is lots of inventory. Relative to incomes we'll likely see the inverse of what is happening today. The lowest income to home value in history.

The provincial and local governments will continue to increase property and user fees making owing a rental property unprofitable. And we'll have a lot of derelict 1970's built apartment blocks that are too expensive to maintain.

There might even be an exodus of retirees leaving the cities for smaller communities as the living costs are too high in the big cities.
That happened in the late 1980's in Vancouver as retirees left the city for the Fraser Valley.

What we are experiencing today might be considered the golden age of real estate 20 years from now.

or not.

vicre said...

Marko good points you definitely know your stuff. What area is your half acre?

We keep hearing how great Victoria is but with a pop of 350 000 obviously not that many people want to live here. Our city is one of the slowest growing pop. Most people will just stay where they and their families have established themselves.

I bought a condo in 2002 for 80k downtown that had sold in 1994 for 120k. I sold it in 2006 for 170k. No improvements on it at all, same old 80's carpet, washroom etc.

SJ said...

Forward looking statements boomer segment will begin downsizing next 20 years
The trick to RE is looking to future. Everybody and their dog, but esp the boomers, were buying up US until recent. I'm only trying to help you see what RE will perform best for future, and it's not tiny condos... nor will you make as much ROI on buying a MILLION dollar Bayview or Sovereign today, but that one should be obvious.

SJ said...

You need to work on your exit strategy ;)

And JJ it's nice to see you're getting closer to the peak boomer birth year of 1959 ;)

SJ said...

...and your skill testing question for today is how old does that make the peak boomer this year?

SJ said...

You will all be happy to know that I'm out of country for 10 days and won't have any time to blog ;)

toodaloo

Katyusha said...

Two SFD listings on Clarke Road (lovely location in Brentwood Bay) sold fast -- under 20 DOM -- but for less than asking. JJ / Marko -- do either of you (or others) have a sense of the present market on the Peninsula?

Introvert said...

Where's Info in all this?

info's head exploded when the Bank of Canada actually lowered the country's "temporary, unprecedented, emergency" interest rates.

R.I.P.

Just Jack said...

Since the discussion is pertinent to retirees, then using the government's date when they chose to raise entitlements is relevant.

If you were born before March 15, 1958 you can receive benefits at 65. Born after that date then entitlements begin at age 67.

Introvert said...

According to Just Jack's calculator, Victoria real estate is in real trouble going forward. However, it is good to be mindful that JJ has essentially been wrong about absolutely everything since he started sharing his thoughts on this blog.

Just Jack said...

There's quite a variety of types and styles of housing in the Peninsula.

Acreage and waterfront are very difficult to figure out because of the lack of reliable date.

If you could be a little more specific, I might be able to run some numbers.

Katyusha said...

Thanks JJ. I'm most interested in Brentwood Bay/Saanichton SFD...can exclude acreages. I found your analysis from a while back of the Sidney area a good read.

Leo S said...

Timing is a tough task for most realtors, as they tend to get caught up in the emotions of the market and believing their own sales pitches at the peaks.

The guy buys one condo and suddenly he's an expert.
C'mon Marko take his friendly advice and see the error of your ways

SJ said...

I can pretty much guarantee I've held title (and deed) to more property at one time than everyone who frequents here combined ;) and that doesn't even include the reits I own.

Sorry but I couldn't let that snide remark pass ;)

Toodles



S-J said...



I've always pictured JJ living near Cook Street village, drinking coffee outside a cafe, whilst writing up his next appraisal or comment on HHV.


Also, noticed "Victoria Real Estate Update" on Garth's blog today talking about the decline of Victoria house prices. Someone thought this was "Info".

jwalbren said...

Good afternoon all.

Just a little note to point out that my short track record of being correct about the market so far has been more correct then 8 years of predictions by all the old(er) posters on this blog.

I'm enjoying the younger, educated, and clear thinking posters.

The market is set to go up 15% this year in the core for houses that are not teardowns.

Get in while you can.

Marko said...

The trick to RE is looking to future. Everybody and their dog, but esp the boomers, were buying up US until recent. I'm only trying to help you see what RE will perform best for future, and it's not tiny condos... nor will you make as much ROI on buying a MILLION dollar Bayview or Sovereign today, but that one should be obvious.

Condos are simply the worst appreciation play, always have, always will be.

First of all, the majority of the value in a condo is in the improvements and improvements depreciate. I remember in the mid-1990s I had a friend that lived at Regents Park and at the time I remember it being high-end. Now when I go from Regents Park to Bayview it's like going from a Yugo to a Rolls Royce, the ceilings are taller, the kitchens are bigger, the bathrooms are night and day, etc.

Than you have the problem of supply. Downtown Victoria can easily support another 10,000 - 20,000 condo units. Fairfield can support 5 more single family homes :)

Etc.

I buy an investment condo every two years for various reasons but appreciation is certainly not one of them. If I had a 9 to 5 type job and was free on the weekends I would most certainly buy a triplex in Fairfield on a large lot every 6 years instead. I could spend my weekends puttering around the property fixing things up and mowing the lawn for tenants, but I am not in such a situation, condos it is.

BillW said...

I hope that comes even halfway true so we can sell our place in Gordon Head and move. Love Victoria, but we are pretty close to being able to move from GH to an acreage with a newer house up island and still bank a nice chunk of change for retirement.

Marko said...

I am finding that condos that would appeal to downsizing baby boomers are at bargain prices. For example, take a look at this recent sale at the Bayview for $583,500. $377 a foot is bargain for a unit of this quality (take a look at the pics in the link below).

http://grahamsingh.ca/bayview.html

Marko said...

What area is your half acre?

Central Saanich

DavidL said...

Where's Info in all this?

I miss those ASCII charts ... ;-)

Marko said...

Two SFD listings on Clarke Road (lovely location in Brentwood Bay) sold fast -- under 20 DOM -- but for less than asking. JJ / Marko -- do either of you (or others) have a sense of the present market on the Peninsula?

I've been showing a lot of properties in North Saanich and the market is nothing like the core but there is definitely more activity on the Peninsula than there has been in the last 5 years.

If the market in the core has gone from balance to leaning towards a sellers market the market on the Peninsula has gone from buyers market to balanced.

BillW said...

Marko, I usually agree with you, but that place looks claustrophobic and already outdated. Whats up with the zero privacy and the big pole in the room.

The finishings look like they are from 2005.

Marko said...

Bill, send me a link to a unit you feel has better finishing/quality and I'll give you my comments.

I've rented at the Bayview and sold units there....there are quality components at the Bayview you simply won't find in any other building. I made a short video for the last unit I sold in there ->

https://youtu.be/9xZNZLugq0Q

Marko said...

I own a unit at the Promontory and even though the Promontory is 5 years newer and built by BOSA it does not compare in terms of quality to the Bayview.

BillW said...

http://www.realtor.ca/propertyDetails.aspx?PropertyId=15239923

This one looks very nice. Same exact price, but brand new, and a much better location, with ocean views.

BillW said...

Thanks for that video, I see what you mean now about quality.

It would be great if you did more in-depth videos, cover more details and longer videos, would be great to see more info covered on that condo.

Marko said...

Bill, I am in a weird position that as a realtor I cannot negatively critique other listings. I can provide some facts to an extent. The listing you are referring to is wood-framed. The Bayview is concrete with a 10'' slab between the floors.

All I can say is a lot of things are not apparent unless you are looking at them closely.

Quick example, take a look at this brand new high-end and the shower tray/glass assembly.

http://www.realtor.ca/propertyDetails.aspx?PropertyId=15231723

Then compare to the Bayview showers that are now 6 years old.

dasmo said...

I have been mostly right on this blog... And I'm old and not very hip. I think all the recent bullish posting on here is the preamble social media campaign to the 1.99% mortgages. It could all work but don't expect a hockey stick forming this year....

Grezilda said...
This comment has been removed by the author.
Leo S said...

short track record of being correct

You mean no track record. Commenting on current conditions is not a prediction.

The market is set to go up 15% this year in the core for houses that are not teardowns.

Now that's a prediction guaranteed to be wrong, but conveniently made with completely subjective criteria so you can claim to be right no matter what happens.

jwalbren said...

Meh, a lot of the SFH selling these days are up over 10% already... it's really not hard to see another few % points.

If you are on the rising boat enjoy the ride up, or hop on for the ride.

And yes, 15 rentals, AND owning a ton of real estate... interesting.

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

FYI

The average one-storey home weighs between 52 to 86 tons.

Therefore it is very easy to own tons of real estate.

Leo S said...

The market is set to go up 15% this year in the core for houses that are not teardowns.
Meh, a lot of the SFH selling these days are up over 10% already... it's really not hard to see another few % points.


Let's see. This year is 2015, so we have 2 months of data. Benchmark price for single family homes in the core in January was $561,600. In February it was $557,000.
So far we're down 0.8% then. Only 15.8% to go for the year.

Unless you meant the last year rather than this year. In which case SFH in the core are up 1.3% compared to a year ago. Only 13.7% to go.

jwalbren said...

Leo, you are cherry picking data again.

Do the math in decent areas of the core, not Westshore or esquimalt or gorge.

Leo S said...

Do the math in decent areas of the core, not Westshore or esquimalt or gorge

Actually I'm using the only verifiable data which is the HPI for the core. I'd say you're cherry picking but that would require some actual data.

A prediction that can't be falsified is not a prediction.

patriotz said...

It is cheaper long term to buy then to rent.

You don't know "is". What you know is "has been".

And what we all know is that the last 30 decades have seen the largest decline in interest rates ever. That's what has made home ownership a winner for those buying in the past.

jwalbren said...

HPI is a joke for places like Victoria.

Might work in homogeneous places like Surrey where vast amount of houses are 'same same'.

Victoria is way to varied for HPI to be accurate.

Don't be lazy, do your own math.

Leo S said...

Might work in homogeneous places like Surrey where vast amount of houses are 'same same'..

If you claim that the "good" houses have appreciated 10% while the HPI is basically flat, that means other houses must have dropped 10%. Sound reasonable? Which houses are down 10% from last year in the core?

as for doing the math, I'll just wait for you to back up your statement instead. I've shown that the data doesn't support you already.

Introvert said...

Leo, you're awfully quick to call out the bullish vague predictions but a lot slower to call out the bearish vague ones.

Marko said...

How did this blog go from arguing with bears on unrealistic predictions to arguing with bulls in a matter of a few weeks?

Here are the facts. Average homes prices last 4 years

2011 - 613,839
2012 - 603,298
2013 - 598,637
2014 - 609,342
2015 YTD - 594,102 (will be over 600 after this month).

For there to be a 15% increase we would need to be close to $700k average. Even if one argues only the "decent" areas will increase 15% I would expect to see the average pulled up to at least 650k.

Marko said...

15% wasn't a lot when homes were 200k but I just can't see the average Gordon Head ("decent" area) box going from 600k to 700k in the next 12 months given sales volumes are no where close to those of 2003-2007.

jwalbren said...

610k to 650k is not that hard to envision given the rate of sale and hot bidding wars happening... it really is not that far off.

Marko said...

The market only feels hot cause it has been so slow for the last 5 years.

February Sales

2004 - 651
2005 - 662
2006 - 658
2007 - 707
2015 - 542 (including a lot of sales in areas that did not really exist 10 years ago such as Happy Valley)

jwalbren said...

We shall see.

The market is just warming up.

Katyusha said...

Irrational exuberance, if you ask me ;)

Tren said...

mark

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

Dasmo said
“I have been mostly right on this blog…”

No offense dasmo but I find you have been one of the least aware of the upturn in activity. You also bought one of your places near the top.

Marko said
“Condos are simply the worst appreciation play, always have, always will be.”

Starngely enough they have outdone houses by 3.5x since last winter.
http://www.timescolonist.com/business/greater-victoria-s-february-real-estate-sales-blossom-forth-1.1780206

Patriotz said

“That's what has made home ownership a winner for those buying in the past.”

Strangely enough increasing rates from 3 % in 1950 to 20 % in 1980 also made home ownership a winner.

totoro victoria said...

Marko was absolutely right.

Condos do not appreciate at the rate of SFH's for the reasons identified repeatedly here: they have a smaller land component (the appreciating asset) and a larger structure component (the depreciating asset).

I've lost track of what people have been mostly right or wrong about except for those who were predicting a bust.

BTW, if anyone misses the info ascii charts you can get your fix at: http://www.greaterfool.ca/2015/03/19/the-goal-of-life-3/#comments

Marko said...

Starngely enough they have outdone houses by 3.5x since last winter.

Let's look at some sales from yesterday where condos have been purchased in the last three years.

401 - 1615 Bay purchased for in 2012 for $327,000 and sold yesterday for $317,000.

502 - 940 Boulderwood purchased for $420,000 in August of 2014 and sold yesterday for $420,000.

5-1231 McKenzie St purchased for $503,000 in September of 2014 and sold yesterday for $507,900.

There are many condo complexes that are large enough with enough sales over the span of a year that it would be very easy to identify a 4.4% yoy increase, but I am not seeing it.

When I take complex A (500k average condo) and take a look at the last year condos are still selling for give or take a 500k average.

When I take a look at complex B (300k average condo) and take a look at the last year condos are still selling for give or take a 500k average.

The 4.4% increase is coming from more complex A condos selling than complex B.

If condo prices were up 4.4% it would be very easy to prove. For example, one could say a unit at Regents Park on the 8th floor sold last year for $350,000 and this year the 7th floor in similar shape went for $350,000 x 1.044 - $5000 (floor differential) = $360,400....but I am not seeing this.

Katyusha said...

Central Saanich.

Good man, Marko. Little pieces of heaven up here in CS ;)

dasmo said...

It's true I have bought 2 house near the top. 2003 and 2012....

Just Jack said...

For those that might not understand what a strata lot is...

The strata lot is a legal concept of a type of ownership introduced to BC in the early 1970's. For condominiums there is no physical land associated with the strata titled property.

If the building is destroyed then your strata title and lot ceases to exist. Eventually when the land is sold you will get a portion of the value in accordance with the Units Upon Destruction schedule shown in the strata document.

Individual vacant condo strata lots can't be sold because they no longer have a title to the property. There is no marketplace for vacant condo lots. Therefore vacant strata lots do not have a market value.

Instead they have a value "in situ". A value that can not be separated from each other. The strata lot has a perceived value because the building is there and the building has a perceived value because the strata lot is there.

Legislation in BC states that BC Assessment shall provide a reasonable break down between land and improvements for taxation purposes. In contrast International Valuation Standards says it isn't a valid method. Legal advisory bulletins from the Appraisal Institute of Canada have stated that an appraiser providing a cost break down in an appraisal report between the strata lot and the improvements may be voiding their Errors and Omission insurance by doing so.

Separating allocating values between land and improvements for strata properties is not valid unless you happen to be the government and then you just pass a law to make what you do right.

This is also important to understand when looking at the diminished utility or accrued depreciation of the strata as it nears the end of its economic life.

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

No offense dasmo but I find you have been one of the least aware of the upturn in activity. You also bought one of your places near the top.

Many people don't want to wait two, three, five, ten years to buy at the bottom--a state that cannot even be determined until after the fact.

Also, since money isn't most people's only motivator (and it shouldn't be), buying at the top isn't an unequivocal mark of poor decision-making.

Numbers Hack said...

@ Curious Cat
Saw the Gorge property, decent location, but layout had some issues. Thanks

@ Dasmo
Great RE Analysis. Didn't have as many data points as you in terms of calculations, helpful indeed.

@ JJ
Is commercial RE super dead in Vitoria or what? Everywhere there is for Lease Signs. Retail is now online, I guess no need for physical stores. Remember Blockbuster?

I don't know if municipalities allow commercial/residential together on a single lot (e.g. like in Europe, your bakery is downstairs and you would live upstairs)

That would nice to have MORE OF in Victoria. Might ease the vacancy rate % and have more smaller businesses, which IMO are the drivers of our local economy


Your opinion would be appreciated TIA

Chris said...

Skyboxes may be out of the gate quicker, however houses always win in the end. The only advantage I see to apartments is with the elderly; elevators, lower costs and security. If we get a prolonged influx of elderly I imagine it’s possible to keep up with single family. I wouldn’t be banking on that.

dasmo said...

@Numbers Hack. My worksheet didn't have PTT or selling expenses or income tax on the rental income actually so it's not as rosy as that set of numbers.

patriotz said...

Strangely enough increasing rates from 3 % in 1950 to 20 % in 1980 also made home ownership a winner.

First of all, mortgage rates in 1950 were about 5% not 3%. A homeowner is not the Government of Canada and does not borrow at the same rate. Also the down payment requirements were much greater then, limiting the buyer pool.

Second, real wages increased over this whole period, and the norm changed from one income to two. Obviously increasing house buying power.

Third, there was a period of high general inflation beginning in the late 1960's which increased all nominal prices and wages across the board. The higher interest rates reaching a peak in 1980 were introduced to stop this inflation. And surprise, BC saw the biggest RE crash since the 1930's.

These trends above have not continued since 1980 and only declining interest rates have enabled rising house prices since then.

dasmo said...

According to VREV 2012-2013 is potentially the new bottom....

totoro victoria said...

I'm strongly in favour of mixed commercial residential. There is simply not enough - I've been looking for some for years now.

All municipalities should permit and promote it imo in specified zones. Mixed use adds to walkability and charm and provides an option for people who can work from home but want some separation - as long as it doesn't create parking chaos.

I too wonder about the future of commercial real estate in the internet shopping age. There are loads of for lease signs on Oak Bay Avenue and few takers. High lease and property tax rates competing with internet ordering to the comfort of home.

This year for the first time I ordered a lot of my garden supplies online. With free shipping and a ratings system to rely on there was a wider selection and it was hassle-free.

S-J said...

Wow, this one on Newport went quickly and for over-asking ($910,000).

http://preferredhomes.ca/officelistings.html/details-46514398

Lots of multiple offers going on - is this just to do with the small interest rate drop, or are there other factors involved?





Leo S said...

The situation in Vancouver since 2008 illustrates very well how condos often don't appreciate as well as houses. The demand is there, but so is the supply.

Chris said...

San Francisco illustrates the difference very well too. Since the 2011 bottom, skyboxes have only gone up 50% while houses have increased 55%
, **even though the first year post-bottom saw skyboxes beat houses same as they have here**. The only cycle on that chart where they outright beat houses was from the 1995 bottom to 2000 during the tech boom.

Introvert said...

Victoria, The Sunshine City: a promotional film from 1936.

DavidL said...

@Introvert

That's a interesting/quaint slice of history. Thanks for sharing...

Just Jack said...

There have been 95 re-sales of freehold strata condos in the core over the last 30 days. Median price at $280,000 for a 1,000 square foot 2-bedroom suite built in the early 1990's. The median a year ago was $275,000 for a similar condo.

The average price is a lot higher at $338,820 because of several high end water view suites selling. Coupled with the low volume of sales and you get a lot of skewing in the numbers. The average a year ago was higher too, for similar reasons at $360,000.

Exclude the water view suites and the average drops to $292,000. But so does the sample size down to 68 sales. The same criteria for the same 30 day period in 2014 showed 59 sales and an average of $275,500.

In my opinion there isn't enough data to clearly indicate how prices are changing on a month to month basis.

If you got rid of the arbitrary month to month comparison and compared say blocks of 500 sales then you would get an increase in accuracy and a clearer indication in the direction of the marketplace for re-sale condominiums.

Just Jack said...

When I block sales of freehold strata condos in the core by blocks of 500 it shows and increase from $269,500 to $280,000 in the periods from April 10, 2014 to September 5, 2014 relative to the period from September 6, 2014 to today.

In my opinion, that would strongly indicate that re-sale condos in the core districts have increased in value in the range of 4% between the two time periods.

Is that better than detached houses in the core?

DavidL said...

@Just Jack
Is that better than detached houses in the core?

I suspect that condo re-sales are doing better than SFH re-sales in the core. However, as you have access to all of the raw data - please let us know!

DavidL said...

@Just Jack
Is that better than detached houses in the core?

I suspect that condo re-sales are doing better than SFH re-sales in the core. However, as you have access to all of the raw data - please let us know!

Just Jack said...

Median prices of similar blocks of detached houses in the core also increased from $580,000 to $600,000 or just under 4%

For the periods of June 17, 2014 to September 5, 2014 and from Dec. 1, 2014 to today.

DavidL said...

Thanks! So no big shift to/from houses and condos. The current very low interest rates make for a similar monthly mortgage payment for a new sale as compared with a sale last summer (slightly lower price, slightly higher interest rate).

Introvert said...

This blog is so much more enjoyable now that the doomsayers are outnumbered by the realists and by the optimists. We'll see how long this condition lasts.

Just Jack said...

Where have buyers been buying for the last month?

Just looking at houses in the Core, Peninsula and Western Communities the answer is....

65% in the core
24% in the Western Communities
11% in the Peninsula

In the last month where are the new sellers coming from?

55% in the Core
32% in the West
13% in the Pen.

We're adding new inventory to the core at the rate of 1.5 homes for every one that sells. When you consider that a portion of these homes are priced too high and that some sellers get cold feet and cancel their listings a ratio of 1.5:1 isn't enough and prices rise.

The Western Communities is balanced with a ratio of 2.3:1 . You're not going to see prices increase with that many new listings coming to the market relative to sales.

And it's the same for the Pen, more than enough listings to keep prices stable.

Just Jack said...

And just looking at the main areas in the core.

Victoria is adding 1.85:1
VicWest, Esq. and View Royal 1.4:1
Saanich 1.45:1
Oak Bay 1.31:1

No relief for buyers in the core. You're going to have to step up and pay the price because there will be several others willing to buy that same home.

Not really the market to be looking to buy a home in. If you're someone who wants to time their purchase - then the best advice is pack the family up and go on vacation.

LeoM said...

Someone mentioned that from 1981 to 1985 SFH prices in the core areas declined 25%. The decline was actually 30%. I know this for a fact from being involved in several sales and purchases during those years. And it was very tough trying to find a buyer and for every one buyer there were over a dozen SFH to choose from. It was a great buyers market.

LeoM said...

SJ keeps posting about the tsunami wave of retirees moving to VICTORIA in the next few years. The naive have been saying that for over 50 years, probably longer. In fact that was one of the first 'tips' I got as a young guy in 1965 from a novice real estate 'investor'. He went broke as did many others with that investment strategy. Check out Stats Can statistics on population history of greater Victoria for the past 50 years. We have always had some retirees move to VICTORIA but just as many leave.

Introvert said...

SJ keeps posting about the tsunami wave of retirees moving to VICTORIA in the next few years. The naive have been saying that for over 50 years, probably longer.

Maybe it is naive, but then again so is declaring that, any year now, a tsunami of boomers will be downsizing, thus wreaking havoc on the SFH market. (I'm not implying you've said this, but others have.)

Leo S said...

Victoria, The Sunshine City: a promotional film from 1936.

Amazing how little has changed in Victoria in 80 years.

vicre said...

Has anyone read Hilliard Macbeth's new book yet? Maybe he might get luckier than G Turner with his prediction years ago. MacB predicted a black swan event that would devestate real estate by 50%. I don't really think he cares if he's wrong just as long as he sells books. So far even Calgary is still doing ok.

Marko said...

Monday, March 23, 2015 8:00am

MTD March
2015 2014
Net Unconditional Sales: 491 575
New Listings: 1,040 1,286
Active Listings: 3,693 4,050

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

mooselessness said...

vicre wrote "I don't really think he cares if he's wrong just as long as he sells books."

What makes you say that? Is there something about this author in particular that troubles you, or is it something you believe about all authors -- they all value sales over accuracy?

SJ said...

Intro & LeoM, the shift to mild climate easy-living will be somewhere between epic and f'in epic ;)
Thus, by 2030, four out of every five new households will be formed by people in their golden years (65 and over)...Older cohorts are expected to look for smaller, less burdensome housing boosting demand for multiple housing units, especially condo's
http://www.conferenceboard.ca/economics/hot_eco_topics/default/11-09-01/retirement_homes%E2%80%94the_future_of_canada_s_housing_market.aspx

Your GHead house will do fine, cuz some TO/Calg boomers will happily downsize their 4000 footer to be in a 2000 ft house between Mt Doug and Caddy Bay (I'm assuming you don't live in a burdensome mansion)

SJ said...

Hilliard M is just another GT.

Just Jack said...

We're always so pre-occupied with our inner city homes that we forget about the rest or might I say the real world.

Port Renfrew is a small village about 2 hours drive from Victoria. It has local shopping, wonderful outdoors and a place you can get a bite to eat, sit around a fire and get drunk.

Several years back starter homes were selling in the $300,000 to $350,000 range.

Now there's 11 listings in this ink spot of a location along the West Coast. That's now five (5) years of inventory.

Any offer on a home here would be considered a mercy killing.

Just Jack said...

The tale of two cities.

Langford and Colwood population:33,000
# of houses for sale 282
# sold in last 30 days: 55
Days-On-Market: 34

Median Price is $500,000 for 20 year old 2,300 square foot home on an 8,000 square foot lot in Triangle Mountain.



The City of Victoria population:80,000
# of homes for sale: 97
# sold in last 30 days: 41
Days-on-Market: 15


Median Price $580,000
Typical home is a 65 year old house with 1,900 finished square feet on a 5,500 square foot lot in Oaklands/Fernwood

vicre said...

As along as there is alternative inventory such as the Westshore which is a part of Greater Victoria - a few kilometers further out the core will not experience an increase in prices. There are fewer buyers at the middle upper to top end of the market, the rest just buy on the outskirts. Society's wealth and income is distributed much like a pyramid - few at the top, lots on the bottom.

vicre said...

Many developers are now getting into building rental units because of a lack of presales to warrant financing for developments. The 650 unit twin towers for Uptown is a case where plans have been scrapped because of market forces. But because rentals are built to new standards they can be readily stratified later if the market turns.

Just Jack said...

A marketplace is interwoven with first time, middle income and upper income households, strata homes and detached homes. Much like a rope is made up many different strands.

Rarely will the marketplace, like a rope, completely snap. More often the marketplace begins to fray and unravel until it finally gives way.

That's why it may be important to watch the outlying areas and the less desirable properties. They could be a precursor of things to come.

vicre said...

Moose people have been predicting a real estate collapse for years now yet nothing has happened and they use all kinds of excuses for nothing happening. There's a lot of great authors out there and Macbeth is great but I'm not sure about what he claims. Look at all those Canadians that took Garth's advice and missed out.

Introvert said...

Rarely will the marketplace, like a rope, completely snap. More often the marketplace begins to fray and unravel until it finally gives way.

That's why it may be important to watch the outlying areas and the less desirable properties. They could be a precursor of things to come.


No, watching the outlying areas won't provide any magical insights into what will happen in the core. That's just dumb.

First it was a wave metaphor. Now it's a rope metaphor. A dumb idea with a metaphor is still a dumb idea.

Just Jack said...

Here's another metaphor for you then

Some of your cheese slid off your cracker

jwalbren said...

Not many houses coming online at all right now.

Lots of buyers, housing coming online has slowed down dramatically this last week.

Maybe the small 4% uptick is just barely worth it for a lot of people to put their house on the market and sell.

I suspect the market will be 'good' houses will have a ton of activity and sell well and for more then asking, and the over priced high flyers and the teardowns will just sit and fill up the inventory numbers like they have the last few years.

jwalbren said...

It appears to us when we look at places, that 7 houses on the market are out to lunch, and 3 are decent places at ok prices that sell right away.

If you view it that only 30% of real estate on the public market today is actually seriously for sale at realistic prices, then there are only about 900 homes on the market at any given time that are actually serious about selling within a 3-4 month time frame.