Monday, March 23, 2015

March 23 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
491
575
New Listings3967071040
1286
Active Listings356236333693
4050
Sales to New Listings
33%
43%47%
45%
Sales Projection--675720

Months of Inventory
7.0


Last time we had over 700 sales in march was 5 years ago at 789.  Before that it was 2007 (833 sales).   So not a hot market yet (that would be between 800 and 900 sales with an inventory of half of what we have now) but decent.  Enough to draw the bulls out of the woodwork at least.

337 comments:

1 – 200 of 337   Newer›   Newest»
Introvert said...

I see you're proofreading your work, Leo. Well done.

jwalbren said...

Its all about how you frame it to fit your personal outlook.

"It's an ok market, not hot like in 1986 when we had 15% more sales then."

Or:

"Victorias housing market is clearly in a hot sellers market currently with well over 35% gain over last year, making this potentially one of the best markets in a decade"

Leo S said...

Its all about how you frame it to fit your personal outlook.

It's more about facts. If we get 750 sales in March that makes the months of inventory about 5. That is generally considered to be a balanced market (4-6 months of inventory).

A hot market is what we had in 2003, 2004, 2005, and 2006 when MOI in March was 3.3, 2.0, 2.2, and 2.9.

But if we're talking about participation trophies, then yes Victoria's market gets a "Nicely improved" award.

Leo S said...

making this potentially one of the best markets in a decade

I guess you don't remember the market of a decade ago. We are a far cry from that.

vicre said...

Right now banks are desperate for mortgage business that's why they are willing to lend out and people will pay over asking regardless of how many houses sell and how many are for sale. If the banks became very conservative, regardless of the market, people would not be willing or able to pay as much.

jwalbren said...

Those years were not 'hot' markets', they were insane markets which have never been seen before in history.

The new 'hot market' is this one we are seeing now.

Leo S said...

Well it sure is convenient to just define words to whatever you like. I assume that when you say this could be the best market in a decade you mean the lesser known 4 year decade.

Numbers Hack said...

@ Marko

Marko, for the new houses you see in general in Oak Bay, Vic and Saanich and their level of finishing, what do you think the cost per square feet is for these builds? I understand the level of finishing can make double or triple the final $/ft2 price. But thinking AVERAGE to ABOVE AVERAGE finishing...like the $1.3 to $1.7 MM new homes in OB.

You think it is $150/ft2? TIA.

BTW, building permits in OB are crazy expensive, application fee is $1000 and get this, your permit is $1300 + 1% of the value of the construction.

What does the city do for you for that?....absolutely diddly.

We are in the AGE of where governments are NICKELING and DIMING people to death and OVER REGULATION.

Just to tear down a home and get it ready to build, without actually starting to build is like a hidden sales tax of 5%-10% of a properties price.

Got to love government!

Just Jack said...

FYI
The difference between standard construction and custom isn't double the price per square foot rate.

You're exchanging a standard feature for a custom feature. Standard construction is 8 feet ceilings and you're replacing 8 feet with 9 feet. The same for labor costs they only increase marginally.

Custom builds, not eccentric builds, are typically 20 to 25% over standard construction.

Eccentric builds are when people want to build a Louis Quatorze castle in Saanich.

There really is no standard cost to build. A builder is free to charge as much as he/she likes. It's up to you to determine if what they are charging is reasonable.

One way is to look at the difference in what the market pays for a completed home and the original land purchase. Take that residual value and express it as a price per square foot.

That would give you a base to compare your builder's cost. Yet you may still elect to pay more because you feel he/she is worth a little or a lot more.

You may also buy construction cost software - which is junk.

Death said...

Can someone enlighten me as to why the new bridge will make Vic West real estate take off like a rocket to the moon? I've heard this theory around and I think some user here has said the same thing. What's the rational here? It's not like the new bridge will be better in any way to current one so what's the deal?

Just Jack said...

When it comes to taxes, all three levels of government want their piece of the pie.

A few builders have said that for a standard house they'll pay around a $100,000 in taxes and fees. That's a big reason why cities, like Victoria, encourage development.

The cities then add more employees and spend all of the windfall on crap. When the next economic recession happens, the cities don't cut back fast enough and property taxes and user fees skyrocket. I spoke with the then Mayor Fortin about this subject during our last recession. He refused to let anyone go employed by the city. His solution was to tax people more and increase user fees or invent new ones.

All this in a city that has a lot of people on fixed incomes.

We are no longer a retirement community. We've have gotten just too expensive.

Just Jack said...

A good example of what can happen with large stimulus packages, such as the blue bridge, is the new interchange by the airport.

Search Gary Lunn the MP that pushed the project through and Canora Mews Development.

Numbers Hack said...

@JJ
You are absolutely right. Taxes and the willingness of all levels of government to spend are going to lead to revolution haha.

Not a politik, but imagine if we had even more leftist government like the NDPers. Raise sales tax, and have a bunch of levies and fees on stuff that we haven't even heard off. All one needs to do is examine utilities/water/etc. Want to cut power to your house while you construct, oh sorry there if fees A to Z. Want customer service or someone to help you...oh just wait while we route your call to India. Crazy.

dasmo said...

@Death Although way too expensive and the project infected with bad decisions and cronyism the new bridge will be better than the construction mess that us there now. Plus it will be a way better pedestrian experience and will be shiny and new.... Its just another element that improves the neighbourhood beyond market conditions. Railyards, Roundhouse, Bayview, Dockside, Bridge, Streets are all being completed to "finish" the hoods transformation. Its not that hard to figure out... The new bridge might entice more people to have a look over here and "discover" it.....

Numbers Hack said...

Final thought. What a tremendous waste of time, consultation, and BS on the world's worst interchange. If it was WC Bennett, it would have been done on time and for 1/2 the price!

Just Jack said...

It isn't just the bridge. The hope is that a new bridge would increase economic activity in Vic West.

Vic West is a tired old neighborhood made up of some of the shoddiest construction on irregular postage size lots along with industrial properties. You have to pass a cement plant to get to the neighborhood. It's the Windsor of Victoria.

We've gone through the largest sustained economic expansion in history and Vic West didn't change. Replacing a functional bridge with another bridge wouldn't have the same impact as say building an entirely new bridge to an undeveloped area.

Like a new Airport on James Island and then sell off the old airport to developers. You can buy the entire island for $75,000,000 or less than the cost of a bridge to Vic West.

dasmo said...

^ This man has never been to VicWest....

dasmo said...

VicWest from 2003 - 2014

Yellow highlights the vacant land developed. (Point Hope wasn't vacant just delinquent). Nope nothing happened here....

Just Jack said...

Seriously Dasmo, wouldn't a major fire be an improvement for the hood.

Would it not make better sense for this area to be bull dozed for higher density housing. Rather than trying to save the natural habitat of the Powder Post Beetle.

As it is now all that the new bridge might do is make it easier for people to get through Vic West faster.

People aren't likely to shop in Vic West. They're going to shop where it is easier to get in and out without having to cross bridges - and that's Uptown with several floors of FREE parking.

Compare the two areas on weekends when people are grocery shopping. Which area is busier - Uptown.

Vic West is where you go to buy lumber.

dasmo said...

Go to SaveonFoods on a Sunday afternoon... or Fol Epi on a sat morning....
Like I said, you have no idea about what is happening in VicWest. How can one trust your appraisal skills for anywhere but the westshore when you obviously don't have your finger on the pulse? Did you even look at the image? That is a lot of area developed in 10 years. The prior 10 had a lot too....

dasmo said...

Mind you a fire in a few spots could help yes....

Just Jack said...

Businesses are moving out along the Douglas corridor not into Vic West.

For example Michaels they didn't move to Vic West they chose Uptown.

Vic West will always be a bedroom community. Most of it is already built up with small marginal detached houses that makes it near impossible to assemble and redevelop to a higher density. And that's why Vic West will not change much in the next several decades.

The areas marked in yellow were mostly contaminated sites and that was why they were left undeveloped for so long.

Vic West still remains the least expensive place to buy a house. Esquimalt is more expensive than Vic West and it has the Navy Base which makes it a first strike in a nuclear war! You bought in Vic West because it was the least expensive area to buy in the core districts. When it comes time for you to sell, the person buying your home will do so because it's the least expensive area to buy in all of the core districts.

jwalbren said...

What I worry about is new people reading this blog and reading Just Jacks numbers.

They are constantly 'slanted' towards his super negative view of the city.

With his near hourly comments for 8 years on this blog, there is a high likelihood that he has aspburgers or another OCD type of disorder that makes him compulsively post.

So there are a lot of new readers on this blog, now that the market is doing well and there are obviously a lot of new people moving here and interested in buying a house, so new readers, just ignore Just Jack.

His numbers about the core recently are so far off, the average price of a house will be close to 620k at the end of this month, not 580k.

If you are looking to buy, just go for it and make sure you like the place you will buy and can afford it, prices will just go up from here, we have had prices deflate due to inflation by close to 22% since 2006.

dasmo said...

Confirmed again. No idea...

dasmo said...

“In the Craigflower area, yes. People are moving to Victoria West because of neighbourhood pride”

“People come here looking for community – it is no longer just a cheap place to live in Victoria… but people come with that attitude and are more open to change because of this. This has been a gradual change
over the past 10 years”.

http://resilientneighbourhoods.ca/wp-content/uploads/2014/02/Appendix-FINAL.pdf



dasmo said...

http://www.victoriaheritagefoundation.ca/Neighbourhoods/vicwesthistory.html

dasmo said...

http://www.victoriawest.ca/

dasmo said...

http://www.vicnews.com/community/133042578.html

dasmo said...

http://www.victoria.ca/assets/Departments/Planning~Development/Community~Planning/Documents/OCP/OCP%20Neighbourhood%20Directions%20-%20Victoria%20West.pdf

DavidL said...

@jwalbren
... now that the market is doing well and there are obviously a lot of new people moving here and interested in buying a house

Care to provide an impartial source for that bold assertion?

Chris said...

The biggest problem with Vicwest is remediating the contaminated soil from past industry.

I have heard the Bayview site has spent over 10 million in soil remediation work and not yet done.

dasmo said...

https://www.placespeak.com/uploads/assets/DG_September_16th_presentation..pdf

dasmo said...

http://www.johnsonstreetbridge.com/wp-content/uploads/2012/06/engtran_vicwest_plan.pdf

dasmo said...

http://www.roundhousevictoria.com/

dasmo said...

http://www.therailyards.ca/

dasmo said...

Just to catch you up a bit....

DavidL said...

@dasmo

Careful! That is six posts in 42 minutes ... I think that jwalbren is about to diagnose you with some ailment. ;-)

On the subject of Vic West, there are some really nice houses along some streets. For those who work downtown, it is a very convenient commute. However, there are vagrancy issues in some areas. It is being slowly gentrified, and I think that the new bridge will be a huge improvement for pedestrians and bicyclists. On the other hand, the Bay Street (Point Ellis) bridge also needs replacing ...

dasmo said...

"The biggest problem with Vicwest is remediating the contaminated soil from past industry"

Not is...was. This is pretty much done or WIP...

I purchased in VW not because it was cheap but because it was undervalued.

dasmo said...

@DavidL ;-)

Just Jack said...

White Rock in South Surrey is a bedroom community. So is the West End in Vancouver.

Why when I say Vic West is a bedroom community does it become a negative?

When did inexpensive housing become a negative?

Will Vic West ever eclipse Oak Bay?
No - it won't. Is there anyone on this blog think that it will?

You can keep saying that Vic West is gentrifying, densifying and maybe even diversifying but it's all spin.

The typical house in Vic West sells for around $460,000. About the same as a home around Uptown in Saanich today. In Esquimalt it's close to $500,000. Being closer to the downtown core isn't helping this neighborhood.

Marko said...

Marko, for the new houses you see in general in Oak Bay, Vic and Saanich and their level of finishing, what do you think the cost per square feet is for these builds? I understand the level of finishing can make double or triple the final $/ft2 price. But thinking AVERAGE to ABOVE AVERAGE finishing...like the $1.3 to $1.7 MM new homes in OB.

You think it is $150/ft2? TIA.


$150 is good ballpark number but it can range from $100 to $200 per square foot depending on a number of variables. Don't forget that garage is included in the cost calculations. 2,300 sq/ft home plus 400 sq/ft garage is 2,700 sq/ft x $150.

BTW, building permits in OB are crazy expensive, application fee is $1000 and get this, your permit is $1300 + 1% of the value of the construction.

If it was only permits. Sewer/Storm/Water hook up in most municipalities will set you back about $10,000. City of Victoria, for example, will force you to replace the entire sidewalk frontage, curb, repair road after new curb installation, etc.

Let's not forget surveying, engineering, warranty, HPO paperwork, etc.

I think on my house we spent around $27,000 before the excavator even arrived to start the excavation.

Some things I find hilarious, for example, if you are building a dead simple box you need an engineer to stamp it; whereas five years ago it wasn't required and the same boxes has been built for the last 50 years. There is a $2,000 extra cost for paperwork. Complicated three level home, sure mandate an engineer, but an engineer for a two level home a slab is just the city trying to mitigate absolutely all liability away from themselves.

Our house also cost a fortune on framing given the new code and engineer requirements....but does some of this stuff even really work? Scroll down to the middle of the page, what would happen first in a big earth quake? The bracket coming undone or the wood splicing due to over-engineer and too way many nails in my opinion?

http://vibrantvictoria.ca/forum/index.php?/topic/5120-constructing-an-owner-built-home-in-greater-victoria-personal-experience/page-6

Until one goes to build a house they have no idea how much regulation has been piled on in the last 10 years. It is a little insane. Everything from WCB (tearing down a home) to start the project to the finish.

I don't think prices in the core for brand new homes will every come down.

Teardowns/building lots in the core are the only segment of the entire market that did not correct from 2010 to 2014. Obviously there is limited supply of land and the demand is there, throw in numerous fixed regulatory costs in terms of building a home and I just can't see a newer home in the core every again being affordable for an average family.

Chris said...

In addition to not much of the carcinogenic soil being dealt with, much of VicWest is also a liquefaction zone. So much so, the bridges may not survive a big earthquake.

http://www.vicnews.com/news/129731778.html

Just Jack said...

And the person that will buy your home from you in the future will do so because they feel it is under valued too.

That's a personal observation and has nothing to do with market value.

You bought a house in Vic West and home prices in your hood have increased. So has every other hood.

dasmo said...

"VicWest is also a liquefaction zone. So much so, the bridges may not survive a big earthquake."

False. Only that George coast zone is....

http://www.empr.gov.bc.ca/Mining/Geoscience/PublicationsCatalogue/Maps/GeoscienceMaps/Documents/composite_new.pdf

dasmo said...

It's not insulting. I live in VicWest. I'm well used to people thinking funny thoughts about here. I just expected more from someone who should be in the know. Anyway you have lots of reading now to catch up with all that has happened....

Just Jack said...

I didn't realize how serious the potential for liquefaction was in the area. It's quite noticeable for anyone who has kayaked or canoed in the harbor of just how thick the ooze can be.

It's all good information for those thinking of buying in any neighborhood.

DavidL said...

@Just Jack
Vic West is gentrifying, densifying and maybe even diversifying but it's all spin.

I remember Vic West being a pleasant neighbourhood when playing at Banfield Park when I was a kid. Of course, that was 40 years ago - so the houses are a lot older now (like me!). Vic West was getting rather "run down" in the 1980's. The Songhees development in the early 1990's was the beginning of a slow turn around. More recent developments like the Railyards, Bayview and other developments are improving the area. I expect over the next 5 to 10 years that there will be more SFH teardowns and new homes being built, just like what is now happening in Fernwood.

cycoastal said...

I've been reading these postings off and on for several years now and it's always interesting reading so many different perspectives-thank you! Having lived in Vic west and Esquimalt on a few occasions over the past 15 years, I've enjoyed and appreciated many aspects of the communities, especially the waterfront access such as along the West Song walkway and Saxe point park. Unfortunately, I ultimately decided against living in the area on a longer term basis. Despite the proximity to downtown and some lovely views/landscapes, I prefer other neighbourhoods. I realize this is entirely subjective but I found the waterfront access/views to be suboptimally utilized and not quite as welcoming/enticing as other waterfront areas such as Ogden point, Dallas Road, the inner Harbour, Willows Beach, etc. Although I have taken many walks along the walkway, I always perceived the Songhees area to be a bit sterile and lacking in public engagement. For me a commercial property or several and an engaging public space close to the water would add favourably to his area. The Roundhouse, although a beautiful building with a lot of potential, is separated front he water by a bland stretch of road and a wall of (to me ) uninspiring condo buildings. A lot of the time, I opted out of the stretch between Spinnakers and the Delta so that I could more quickly access downtown despite the lovely views of the harbour. I guess I just had the sense of being in the backyard of a wall of concrete. I don't see how the Roundhouse development will change that perception for me, but perhaps it may contribute to a more inviting space for the general public.

cycoastal said...

sorry...typo..."separated from the "

dasmo said...

^This person knows VicWest....

Leo S said...

^This person knows VicWest....

So those that know it leave?

Marko said...

The problem with the Roundhouse is the build out time. The Bayview One started construction in 2006/2007 and the third and final building likely won't be completed until 2018 at the earliest. That is just three buildings. Roundhouse could be a 20+ year build out.

Numbers Hack said...

@ Marko

Thanks so much. Your project is much faster than ours. Very helpful indeed.

Working on the demolition stage and excavation. Great link on Vibrant Victoria.

dasmo said...

It's not that they left Leo. I know someone that hated Fairfeild and left that neighboyhood.... It's that they obviously lived in VW. I don't think JJ has even crossed the bridge in the last ten years. Saying the place would be better off if it burned to the ground and that the city would be wiser if it built a bridge to nowhere instead is not really comedic prose. Sounds more ignorant than funny to me...

cycoastal said...

although I left the Vic West/Esquimalt area, I've also since left the Cook St. Village area for different reasons although I have many positive things to say about both neighbourhoods. Ultimately, there were many factors influencing where we've chosen to live. When looking for a house, we limited our search to neighbourhoods we liked...and yes, including Vic West. In our search, we were unwilling to sacrifice interesting/appealing/central location (all subjective and relative to our lifestyle) to commit to a mortgage in an area that we don't enjoy. We elected to rent for many years and enjoyed the flexibility and lower monthly costs and we were willing to do so indefinitely. Over the years, I lived in both Vic West and Esquimalt, and enjoyed the many facets of the community. I do think, however, that the waterfront areas are underutilized and that a more welcoming public space on the water would go far to enhancing the appeal of Vic West as well as illuminating one of the best natural features of the area.

Introvert said...

Gee, who knew Just Jack had such a hate-on for Vic West? And this animus led him to say something nice about Oak Bay. Double weird.

On the topic of Just Jack, I've always wondered how someone who thinks Victoria real estate is so overvalued could actually spend his working hours objectively appraising that same real estate.

Just Jack said...

I don't think Victoria is overvalued or undervalued.

I just think it's expensive.

I do realize that most people believe a lot of myths they're told about real estate. And that the market is more magic than fact to them. And then there are others whose agenda is to perpetuate the irrationally mysterious over the rational prosaic.

And then there are just two twats.

dasmo said...

three twats...

Just Jack said...

Never let accuracy get in the way of a good alliteration.

Just Jack said...

Ever wonder what are the hot hoods in Victoria and if they have changed much in prices. Or if your hood has improved more than others?

Here's a list of median prices from the 6 year period between 1995 to 2000 compared to 2009 to 2014. Numbers in brackets are the number of sales over the 6 years.

1995-2000 2009-2014
170,000 (27) 517,000 (24) Downtown
173,000 (175) 440,000 (124) Vic West
175,000 (59) 447,500 (44) Cen. Park
179,000 (111) 498,500 (114) Hillside
179,000 (362) 475,000 (373) Oaklands
182,000 (95) 463,250 (86) Burnside
185,000 (162) 471,600 (179) Mayfair
186,000 (151) 495,000 (158) Jubilee
186,750 (198) 513,000 (207) Fernwood

233,500 (140) 627,450 (148) James B.
244,500 (280) 667,500 (282) FFD East
249,950 (317) 675,000 (346) FFD West

311,250 (126) 824,950 (184) Rockland

LeoM said...

I don't see JJ's comments as a 'hate' for Vic West, he's just stating some facts about the area. If you don't believe JJ then use Google Earth to do a 'fly over' of Vic West, Fairfield, Oak Bay, Fernwood. A Vic West fly-over shows small pockets of old houses surrounded by busy streets, industrial areas, train tracks, high rises, and other noisy non-residential infrastructure facilities. Now fly-over the other neighbourhoods and compare. If that's not enough to convince you that JJ's got valid points, then use Google street view to cruise the Vic West neighbourhoods to see the typical derelict looking front yards with overgrown weeds surrounding the broken down vehicles parked in the front lawns- every street in Vic West seems to have issues. But it's all subjective; some people prefer to pay 20% less than overall average for a house in Vic West and other people prefer to pay 20% more than average for Oak Bay or Fairfield.

Grezilda said...

That shows it pretty clearly. Vic west is the laggard on appreciation despite starting off at similar levels 15 years ago.

dasmo said...

It's the next 15 that matter....

vicre said...

Can someone explain why prices vary from city to city? Considering Greater Victoria only has a pop. of 350 000 it has about the tenth highest prop. values in North America.

Also I have noticed that permit fees and other fees are higher so the municipalities can keep their prop. taxes lower and that way things are subsidized by people taking on higher mortgages.

Nanaimo, Duncan and Port Alberni all have lower prices. Some would argue because they have endless land but so do we if we builder upwards for higher densities which the developers should but why they don't and then the chamber of commerce complains its hard to attract new workers to the region.

Tren said...

mark

DavidL said...

@vicre
Nanaimo, Duncan and Port Alberni all have lower prices.

As most people need to be actively employed in order to pay off their mortgage, the higher selling prices in Victoria reflect the higher wages and salaries offered. Simply put, it is hard to earn as much for the same work in Duncan, Nanaimo and Port Alberni.

DavidL said...

@vicre
Considering Greater Victoria only has a pop. of 350 000 it has about the tenth highest prop. values in North America.

It doesn't make sense to compare Victoria to American cities with vastly different population dynamics, economic cycles and mortgage rules (such as 25 - year fixed rate mortgages and deductible interest). Comparison to similar-sized Canadian cities such as Halifax or Windsor makes more sense. Bottom line is that for a small city like Victoria, we are awfully expensive!

Numbers Hack said...

Greater Victoria Population
1990 307679 5Yr% Base
1995 328370 5Yr% 6.7%%
2000 337858 5Yr% 2.9%
2005 352330 5Yr% 4.0%
2010 366515 5Yr% 4.0%
2015 377535 5Yr% 3.0%
1990 to 2015, 25Yr% 22.7% or +69856 people.

Avg Housing Starts
1/ 1750 units SFD and MFD/yr last 10 years
2/ 17500 new units added 2004 to 2014
3/ 25000 population change over same time (not including Transient population like recreational homes/apartment from Alberta)

Demand Drivers for Real Estate
1/ People/Population
- wages in Victoria
- liveability for retirees
- returns for investors

Make your own assumptions of how that affects the housing market. My take is if you ASSUME all the new housing was assigned to permanent residents, 1.4 persons/new house, then there should be sufficient supply. But you throw in people from other parts of Canada/world that buy for investment purposes then there could be some shortfalls and therefore price increases.

Analysis is simple demand/supply. Does not factor in interest %, so ownership participation if rates were lower to people who otherwise would be renters.

Numbers Hack said...

Crystal Ball

Victoria RE values have increased faster than Population growth and Wage growth. Desirability of Vic as an investment opp, retirement hub, and low interest rates likely have facilitated excess increases in valuation.
As long as it remains an investment opp, retirement hub and interest rates remain low, from 30000 ft looking down, prices will remain robust with positive upward pressure. Now whether it goes up 1% or 10% YoY, I have no idea.

Just Jack said...

Most of the time home prices are being affected by local economics. The sewer expansion opened up new areas and new developments created jobs and demand for homes in Greater Victoria.

In contrast a city of similar population, such as Windsor, Ontario lost jobs with the downsizing of the auto industry.

And then there are political, social and geographical reasons. CMHC lowered the down payment, increased the amortization and lowered the bar on who qualified for a mortgage. That caused a universal increase in prices across Canada.

Vancouver and Victoria had a double impact because of the construction created by sewer expansion and the Olympics.

Just Jack said...

If you want to retire in Victoria, you're going to have to be wealthly.

I see that in the number of transactions between the two time periods of 1995-2000 that were pre-boom years and the last 6 year period from 2009 to 2004.

The number of transactions between the different starter and middle income hoods were mostly unchanged indicating local demand. However, the number of transactions increased substantially in Rocklands from 126 to 184 and so did Rockland's prices.

Vic West's volume likely decreased because there were new alternatives to buyers in the form of downtown condos. Your first home no longer had to be in Vic West - you could own a new condo downtown.

dasmo said...

Sure would be nice to see the data by hood. VREB doesnt break it out for the public.

Just Jack said...

The happy news about our market is that the number of listings is growing at a rate similar to that of the last half dozen or so years. A natural increase in listings - not a panic.

And in this last month I've also seen an increase in sales. About twice as many households have been able to buy a home in the last month relative to the last half dozen years.

The last time this occurred and the supply/demand imbalance was sustained we experienced double digit inflation in house prices.

But this time it's different. The imbalance is only in houses in the core districts and the house prices are already high.

The other question is where are these buyers coming from? My guess is that it's mostly rental properties. That could mean we're robbing the rental market to pay for the housing market. Not necessarily the older purpose built apartment buildings but the basement suites, town homes and rental condos. And I only say this based on a few people that I've spoken to that have just bought.

This increase in sales may be a release of pent up demand. Those that have been able to save over the last few years and this dip in the interest rate made it possible to fulfill their dream of home ownership earlier than they thought possible. If that's true then the sales increase is temporary as soon as prices rise demand will fall.

S-J said...

@ JJ

"Ever wonder what are the hot hoods in Victoria and if they have changed much in prices. Or if your hood has improved more than others?"

JJ, where did the Oak Bay numbers go!

CS said...

@JJ

Never let accuracy get in the way of a good alliteration.

I think you are quoting the historian Titus Livius who said he would have had Carthage victorious over Rome if it suited the turn of his sentence.

CS said...

Can someone advise me about BC Assessment valuations of property sold in the the previous calendar year. Is the actual sale price reflected in the valuation, or does BC Assessment make their own judgement of value independent of the market price?

Just Jack said...

Those are just the hoods in Victoria. I'd have to set things up to look at Oak Bay neighborhoods to see how they have changed.

CS said...

Can someone explain why prices vary from city to city? Considering Greater Victoria only has a pop. of 350 000 it has about the tenth highest prop. values in North America.

Globalization is one factor. That's why Sotheby's and Christie's are hyping Victoria RE to the global elite, which jacks up prices at the top end making the best properties unaffordable to locals, even heart surgeons.

For example, Sotheby's are offering a new house on Beach Drive for $6.9 million (originally listed at $10 million, then at $7.5) that BC Assessment has valued at $4.1 million.

If they get anything like the 70% over assessment that they are asking, they will likely have snagged an out of town buyer and thereby raised the median price of the top 1 to 10 % of properties.

Some such divergence in the market seems to be taking place, a possibility that Leo S raises some days ago.

There are many crazy prices being asked in the Uplands and nearby, which most likely do not reflect the market as a whole.

Just Jack said...

BC Assessment uses sale information around the date of July 1 of the previous year and the condition of the property as at October 31 of the previous year. If you bought on July first then spent a hundred grand updating the home over the next two months. Then they're considering the condition as at October not July.

Your 2015 property assessment is at July 1, 2014.

If your property sold around that July date they will look at the transaction to see if it is at arms length.

For example, If the buyer and seller had the same last name then the sale could be considered unsuitable for analysis. Similarly if the purchase price is too high or too low relative to other similar properties that sold.

I don't blame you if you're confused.

CS said...

I don't blame you if you're confused.

Thanks. And thank you for the explanation. But I am still a little confused.

In particular, if I bought a house on June 30, 2014 (an arm's-length transaction) for xxx dollars, will BC Assessment take that price as the true market valuation and use that price for the 2015 assessment, or will they merely take that price into account, while applying some other considerations in arriving at an assessment?

dasmo said...

I would be curious to see townhouse and condo valued for vic hoods from 2000 to 2014....

Just Jack said...

Assuming that you paid Fair Market Value.

BC Assessment won't just use the price you paid for your home. They'll run a computer program that will most likely come out close but not exactly what you paid.

You have an opportunity to appeal the assessment in the beginning of each year. It costs nothing to appeal and it can be as simple as bringing your purchase price to their attention.

Just Jack said...

What you paid for your home is market price not market value.

That's a tough one for most people to get their head around.

Most of the time the market price you paid for the home lays within a reasonable range of what other properties like yours have been selling. Then the price you paid would be considered at market value.

Sometimes you overpay or underpay for a home then the price you paid would not be reasonable relative to what others have been sold. Then what you paid for the home would not be at market value.

Market value is a reasonable price range which is supported by the marketplace.

Actual Value from BC Assessment most of the time means the same as Market Value. However, sometimes legislation trumps Market Value. Such as properties in the Agricultural Land Reserve.

vicre said...

Great responses.

Didn't that house on Homer sell last fall or spring, listed at 459k.

How about that house on Feltham lowered to 469k, buy or no buy. Needs some work.

dasmo said...

Interesting note on VicWest appreciation. My assessment increase from 2003 to 2014 is 300%. It even went down around 10% this year....

Just Jack said...

Since we're trying to make the site a bit more posh. My response was more orientated to that of...


Illegitimi non carborundum

DavidL said...

@CS
In particular, if I bought a house on June 30, 2014 (an arm's-length transaction) for xxx dollars, will BC Assessment take that price as the true market valuation and use that price for the 2015 assessment, or will they merely take that price into account, while applying some other considerations in arriving at an assessment?

The house next door to me last sold at the end of March 2010 for $525K. The assessed value (release January 2011) as of July 1st, 2010 was $515K. I think that this accurately reflected the market value (at that time) as my neighbour overpaid.

The same house is now assessed at $445K, a 13% drop from the price paid 5 years ago. I expect that quite a few people who purchased in 2010 may be getting less-than-preferential treatment from their banks/mortgage companies when it comes to renewal time. The banks don't offer their best rates to someone whose mortgage is close to the resale value.

CS said...

Thanks for the comments on the way BC Assessment works.

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

Vancity finds the price for an average house in Vancouver will reach $2.1 million by 2030. That’s only about 2.5% per year for the next 15 years, thus probably not keeping with inflation. Who knew a bank like Vancity would get so bearish--lol. I will forecast a less bearish scenario where Vancouver beats inflation by 2 % a year and reaches 2.8 million by 2030.

Chris said...

> Rockland is the one area of Victoria you have the best chance of surviving the 'big one.' Or should I say 'Bedrockland'. Perhaps the richierich have that one figured.

Death said...

When I was shopping mortgage rates recently I found banks now give the best discount fixed rates to CMHC insured mortgages. I put more than 50% down so my rate is higher.

Introvert said...

Rockland is the one area of Victoria you have the best chance of surviving the 'big one.' Or should I say 'Bedrockland'. Perhaps the richierich have that one figured.

No need to worry about death by earthquake where we live. The 1989 earthquake in the San Francisco area killed only 63 people out of several million. Wood-frame houses hold up well compared to other kinds of structures.

The recent earthquake in Haiti is a different story.

mooselessness said...

@Death, yes, one of the headline stories on the Globe right now is about Spin Mortgage's 2.44 per cent five-year fixed mortgage, which is only available to people who use CMHC insurance.

Ben Rabidoux has an article he teases with "Why it's often easier to get mortgage w 5% down than w 20% down, why taxpayers should care, and what should be done." But I'm not a Globe subscriber so I haven't read it.

It's totally rational from the broker's perspective, but I find it alarming as a taxpayer.

Marko said...

I think I've received more phone calls about purchasing investment properties in the last month than the previous 5 years combined.

LeoM said...

Marko said: I think I've received more phone calls about purchasing investment properties in the last month than the previous 5 years combined.
------------------
Deja vu 1980...
I know, I know... "It's different this time..."

Just Jack said...

What's hot and what's not in quick sales. Houses listed and sold in under 30 days.

38 in Saanich Esst
21 in Victoria
17 in Oak Bay
14 is Saanich West
5 in Esquimalt
3 in View Royal
1 in Vic West

The median Sales to Assessment ratios shows half the buyers are paying more than 109 percent of the houses' assessed value. And half the quick sales sold in less than 10 days.

With the Months of Inventory hovering just above 2 and new listings not coming onto the market fast enough at a sales to new listings ratio of 70% the market is set to go into irrational exuberance territory.

It's an orgy of house buyers that refuse to wear condoms.

totoro victoria said...

Well maybe it is time to list...

Introvert said...

I think I've received more phone calls about purchasing investment properties in the last month than the previous 5 years combined.

Here's hoping our real estate prices explode à la Vancouver!

Introvert said...

It's an orgy of house buyers that refuse to wear condoms.

And you, Just Jack, are the 42-year-old virgin.

dasmo said...

Curious what 716 Suffolk went for.... Listed at 529.

vicre said...

Just Jack should people start buying in sann. east yet or is this a blip. Whats your crystal ball showing.

vicre said...

Like how all the big banks have been saying it looks like a bubble but don't worry.

Lots of manipulation going on- cheaper rates if you put down less than 20%.

CuriousCat said...

What's hot and what's not in quick sales. Houses listed and sold in under 30 days.

38 in Saanich Esst
21 in Victoria
17 in Oak Bay
14 is Saanich West
5 in Esquimalt
3 in View Royal
1 in Vic West


Of the houses that sold quickly, can you break it down by price? I'm curious what price range has the most buyers.

CuriousCat said...

Didn't that house on Homer sell last fall or spring, listed at 459k.

Purchased Sept 2014 for $429k. Did it really go up $30k in the last 6 months? It doesn't look like there were any improvements made. Still original kitchen, bathroom, basement, etc. A 7% increase in 6 months... hmmmm...

vicre said...

Curious Cat we will see if Homer sells that would be an indication if things are really hot as its in the core and really close and handy to everything.

Just Jack said...

Here's the frequency table for house sales in the core since January first


Sold Price Sales, Number of
$0 - 200
$200 - 300 1
$300 - 400 36
$400 - 500 69
$500 - 600 117
$600 - 700 88
$700 - 800 52
$800 - 900 30
$900 - 1,000 14
$1,000 - 1,250 22
$1,250 - 1,500 8
$1,500+ 13

Marko said...

716 Suffolk sold for $525,000.

dasmo said...

Tnx Marko

CuriousCat said...

Thanks JJ.

CuriousCat said...

I expect that quite a few people who purchased in 2010 may be getting less-than-preferential treatment from their banks/mortgage companies when it comes to renewal time. The banks don't offer their best rates to someone whose mortgage is close to the resale value.

This comment peaked my curiosity... banks ask for appraisals on renewal time? I haven't gone thru a renewal yet so I don't have first hand experience there. I kinda thought once you had a mortgage, renewal was a breeze as long as you never missed a payment, etc.

dasmo said...

Talk to your bank 6 months before. My contract allows me to lock in a rate early for renewal. If if yours doesn't it's still good to find out if you have issues early....

Just Jack said...

When you read your mortgage papers you'll find that the lender is NOT obligated to renew the mortgage. This is most likely to happen when you're behind in property taxes or you have liens against the property.

But most of the time it should be simply rolling the mortgage over for a new term at a new interest rate. However, you'll need an appraisal if you're increasing the amount of the mortgage, consolidating credit card and other debts.

The lenders' interest rate on renewal is not going to be their best rate. The best rate was given to you when the lender wanted to hook you as a new client.

You can of course negotiate the rate and suggest that you'll take your business to another bank unless they match rates. Just be prepared to follow through with your plan.

The lenders have access to your property assessments and risk management tools that will give them an idea of the value of your home. They can tell when there isn't enough equity in your home. And they'll call your bluff.

Just Jack said...

I was reading an article about Genworth Financial, one of the other two high ratio insurers in Canada.

They are worried about Alberta and tightening up their policies suggesting that those employed in Oil related industries may find it more difficult to obtain mortgage insurance.

This is what happens in recessions. The lenders get worried and tighten up credit which pushes us further into a recession. And then the lenders tighten up again on credit.

And you have people that own a half million, million or two million in real estate but can't get a car loan.

totoro victoria said...

Curious Cat that post is incorrect. I've had no problem with renewals ever even when prices have dropped and the mortgage was large.

What the bank cares about is your credit rating, payment history, and CMHC insurance on properties with less than 20% down initially. This is what they use to mitigate risk.

If you purchased in 2010 and you have maintained good credit I expect the renewal would be offered automatically.

Marko said...

The market went on a blister from May 2009 to April of 2010, by May 2010 sales dropped off the cliff and by August 2010 the sales volume was the lowest it has been in the last 25 years.

There is really just one month worth of buyers left that bought during the peak in 2010.

Introvert said...

We just renewed for the first time a few months ago. Our mortgage is with Coast Capital Savings. At the time, Vancity was offering a lower rate, so we asked Coast Capital to match it and they did so without hesitation. Renewal was a piece of cake.

Chris said...

This house sold for $567K above asking price

Weird how in Fernwood a 2154 foot house like that wouldn’t fetch a third of that sale price.

Just Jack said...

So Coast Capital DIDN'T offer you their best rate at renewal. You had to negotiate a lower rate by inferring you would take your mortgage to VanCity.

If you owed more than the house was worth, had not paid your property taxes for several years and had several liens against your property.

Why would they negotiate!?

In fact if you have all of these strikes against you Coast Capital may prefer that you go to VanCity. And VanCity will look at your title and tell you that advertised rate does not apply to you.

And that coincidentally is what Genworth is contemplating. Making it more challenging for those employed in high risk jobs to obtain high ratio insurance from them.

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

We were a bit anxious that we would have to actually bargain/negotiate with Coast Capital to get them to match Vancity's rate. We thought Coast Capital might put up a fight, but luckily they matched it with no questions asked and without any fuss.

I think Coast Capital just hopes that people aren't paying attention and will simply renew at whatever rate they're offering. But ask them to match the rate of the credit union across the street, and they probably will for all borrowers in good standing.

Leo S said...

Well maybe it is time to list...

The time to list is at the top, not when the market is improving after years of decline/flatline.

totoro victoria said...

Maybe, but I have other profitable things I'd like to do with the cash and I don't know if it is worth it to wait out another year or two.

If I knew how to call top with certainty I'd have know problem waiting. As it is I'm okay to make a certain percentage and move on.

dasmo said...

We are in a top right now. There will always be other tops. I guess that's why they came up with the saying "never sell"....

jwalbren said...

So, can someone sum up whats happening with the market right now? Marko?

Is it just a balanced market, or is there a real restriction in new places coming onto the market.

It's so nice out, and with spring well under way, a lot of people would list now because their yards look good, there is no reason to 'delay' like last year.

totoro victoria said...

no not know... damn iphone

Leo S said...

the top was 5-7 years ago. The market has been slowly improving for 2 years. There are lots of indicators of increasing prices and currently essentially none of declining prices. How you come to the conclusion that it's anyone's guess whether this is the top or not I don't know.

dasmo said...

That was a summit or a peak. We are on top of a plateau right now. But yes odds are you will get more ten years from now but then again you will just get more later still...

Introvert said...

no not know... damn iphone

Not to worry--we know that you know the difference. We also know that Just Jack does not know the difference between "its" and "it's." Too tough.

Leo S said...

>> But yes odds are you will get more ten years from now

Just saying it seems odd to hang on to a house for years while the market declines and then list it when the market is just starting to improve but before prices have really gone up

Just Jack said...

And Introvert doesn't know the difference between a simile and a metaphor.

totoro victoria said...

It is not really odd to hang in during a decline - only makes sense imo.

Selling during a decline makes less sense unless you are pulling equity out to reinvest in a better place that has declined similarly.

As for selling when prices start to rise, I guess it depends if your ROI is adequate.

In my case I'm not sure where this is at but it seems possible my money down has enough of a return that holding is no longer the only option based on acceptable rate of return.

Will prices continue to rise? Seems like they might but, then again, they might not after a good spring/summer run.

jwalbren said...

There is NOTHING coming on the market lately, it's the slowest I've seen all year, its like all the houses that were serious about selling already put their place on the market.

Just Jack said...

The big winners this year are condo developers. The drop in the interest rate and surge in demand means that one out of every four condos bought, in the core, so far this year has been a new condominium. At a median price of $350,000.

In contrast the median price for an updated 20 to 25 year old pre-owned condos is $270,000.

If you thought that buying a condo in order to move up the property ladder was the right choice. You may be disappointed to find that the gap between a re-sale condo and a middle income house widened. A middle income home in the city now costing $600,000. That means you're most likely going to need a basement suite to cover the mortgage difference or you're going to have to buy a starter house without a suite.

Essentially you haven't moved up the property ladder through appreciation.

HGTV was wrong.

Chris said...

That’s the emotional rollercoaster of property investing. I know of several yocals who jumped on the suited house bandwagon near the top who are now jumping ship after years of discouragement.

Introvert said...

I know of several yocals who...

Yokel.

Just Jack said...

You don't have to go far outside of the core to see how irrational the core market has become.

Langford and Colwood just 15 kilometers away from downtown has a population of 33,000 and has 285 houses listed for sale or one house for every 115 people.

The core districts have a population of around 250,000. If the core had the same ratio of population to active listings as Langford and Colwood there would be some 2200 house listings.

But there is only 500 houses listed for sale in the core.

The good news is that so far this month another 305 houses have been listed in the core districts. This coupled with already existing high prices have kept price increases moderate. Likely we're at or very near the price ceiling for starter and middle income houses in the core districts.

So what should agents be seeing with so little supply, strong demand and a price ceiling being met. I think it would be a lot of collapsing sales due to the inability to get financing.

Supernova said...

Hey group. Any insight with respect to purchasing a property with a garage encroaching onto the neighbour's land? A small encroachment, but an encroachment all the same. I suppose it may be covered by title insurance if the neighbour ever makes a fuss - is that right? In that case I guess title insurer would pay to relocate the structure or to purchase the neighbour's land. But if you have a survey done pre-purchase and determine there is an encroachment, is that still insurable?

Any other thoughts?

Thanks all, always enjoy the discussion (except when it goes into stock investing too much...)

jwalbren said...

so can anyone give an update on numbers?

Just jack, appreciate it when you post numbers, but making statements like 'doubt they can get financing' is pretty detatched from any real data.... its just that negative musing.

It is SUPER easy to get financing today, dual income regular incomes can easily get 800k+ financing w 20% down.

Just Jack said...

Your lawyer will advise you.

Typically, the seller will have to get an encroachment agreement with the neighbor before the title can be transferred. This happens most frequently after home owners construct additions whereby the eaves encroach onto the neighbor's property.

The title insurance company is not going to pay for a new garage if you knew the building was encroaching before you bought.

Also, a copy of the land survey will be deposited at land titles. The insurance company will know that you knew.

Just Jack said...

jwalbren, half the time I don't have a clue what you're talking about.

Where did I write...

"doubt they can get financing"

Introvert said...

So what should agents be seeing with so little supply, strong demand and a price ceiling being met. I think it would be a lot of collapsing sales due to the inability to get financing.

The above is incomprehensible horseshit. Can anyone else make sense of it?

... From a man who forgets to put question marks at the end of questions.

CuriousCat said...

Marko, what did 4031 and 4033 Rainbow St sell for? (I hear they both have offers on them, so I know it might take a few days to pop up).

jwalbren said...

"So what should agents be seeing with so little supply, strong demand and a price ceiling being met. I think it would be a lot of collapsing sales due to the inability to get financing."

That is what you wrote Just Jack... that basically means 'doubt they can get financing'.

Or do you just write stuff all day long rambling on and on and forget what you wrote a couple hours ago.

Again, appreciate when you post real numbers or real data or information, the rest of the negative rambles are super boring and I suspect most people skip over reading it once they see the ramble started.

LeoM said...

Supernova said:
Hey group. Any insight with respect to purchasing a property with a garage encroaching onto the neighbour's land.
----------

Property boundaries are a big deal in B.C. where we have the Torrens land title system. A land owner's boundaries are sacred in BC, so any encroachment by adjacent land owners is forbidden. The most common example, by far, is the issue of fencing and the unfortunate consequences to you if you paint your neighbour's fence. It's a common occurrence for a person to build a fence entirely on his property at his expense, and to setback the fence into his own property by a couple inches. If the fence is entirely on the builders property, then the neighbour can not trespass and paint the fence. But unfortunately, neighbours often do trespass and paint their neighbours fence and then end up in civil court with an expensive judgement forcing them to pay for a new fence.
However, if you accidentally built your new fence 2 inches past your property line, on your neighbour's land then your neighbour is smiling because you just built him a free fence which he can paint or burn at his discretion.

The shed owner can probably be forced to move it. If you check the Saanich.ca website for past council minutes you will find an example of one belligerent guy who allowed his shed to encroach, then he refused to remove it, so Sasnich and the lawyers got involved. In the end it cost the guy thou$ands because he had to move his shed and pay for all the legal costs.

The bottom line in BC is your property boundry line is always your property line. It does not change just because a neighbour encroached with a shed and it does not change based on the location of a fence.

jwalbren said...

Also, you keep using Langferd as an example of how the 'core is irrational'.

I mean living in Oak Bay is the same as Langhole right? Its the same thing, I mean Langhole has new builds and stuff right, and its 'just a 15 minute drive'.

BULLSHIT dude... 15 minutes? Why do you mix real good data with total bullshit.

Langferd is a shithole hick town with zero planning, its like someone dumped a bunch of plastic walmart looking houses randomly everywhere, it looks horrible and has zero appeal compared to Oak Bay or Cook St etc...

LeoM said...

jealbren- this is a blog of peoples' opinions mixed with personal experience, combined with some professional unique perspectives.
What gives you the right to censure people?

jwalbren said...

LeoM. The old timey doomers are thankfully getting called out on their doom and gloom bs.

dolly1980 said...

Well we put our house on the market last week and it sold without trouble. Now we are hoping to find something better in 4 months. Hope we can find something, not much out there right now.

LeoM said...

jealbren- if you think JJ is an old doomer, I think you've mistaking experience for doomer. JJ is just saying in his own way that today is not the end of the current real estate cycle. Things will change. And that reminds me of wise old quote that might apply to the current point we are experiencing I the real estate cycle:

Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.

Winston Churchill

jwalbren said...

Market is down over 22% over the last 7-8 years thanks to something called inflation. Market is well within reach of most working couples.

Introvert said...

Not only is it doom and gloom, but it makes no sense. Someone--anyone--please explain the logic in this:

So what should agents be seeing with so little supply, strong demand and a price ceiling being met. I think it would be a lot of collapsing sales due to the inability to get financing.

Introvert said...

Much of what Just Jack writes is dumb gobbledygook (see above), with the occasional re-used stale joke about sunshine coming out of people's asses. Time for some new material, a reality check, and some grammar lessons from your children, who I'm certain write better than you, unless of course you've been teaching them how to write.

DavidL said...

@totoro
Curious Cat that post is incorrect. I've had no problem with renewals ever even when prices have dropped and the mortgage was large.

My post about interest rates at renewal is not incorrect, it may just not match your personal experience. If the amount owing on a mortgage at renewal time is close to the resale value, due to the inherent risk of recovering the full mortgage amount (even if from CMHC) if the loan defaults, the lending institution is going to "pad" the interest rate at about 2% more than the discount rate. Not only will the interest rate be high, but it will be virtually impossible to transfer the mortgage to another lending institution.

Regarding my own mortgage renewal experience... Fifteen years ago, I got a mortgage with the Bank of Nova Scotia (BNS) for a 3 year term. It was a form of hybrid mortgage (no longer offered) where the interest charged was based off the variable rate, but the payments were based on a fixed interest of 6.6%. This effectively allowed me to pay down the mortgage and little quicker, as the average interest charged was just 4%.

In 2005, three months before the term ended, I proactively contacted BNS to try to set up a mortgage renewal meeting. They told me that I would have to wait until I receive the mortgage renewal papers, which I should receive a month before the term ended. As this seemed suspicious to me, I started doing research and discovered that this is a typical practice, as without much time before the term expires - it is harder for the mortgage holder to shop around.

Only ten days before the mortgage term ended, I received the renewal papers. In spite of an perfect payment history, excellent credit rating, owing less than 75% of the assessed resale value, BNS offered me their very worst rate.

I called BNS up to discuss and to try to negotiate a better fixed or variable rate. They refused,and I was told that my mortgage was not eligible for a variable rate. I told them that I then had no option but to move my mortgage to another lender. I was told "good luck" trying to do that. I told them that I had already negotiated a variable rate mortgage elsewhere (with ING) that was 3% less than the fixed rate they were offering.

But the story doesn't end there... ING processed the transfer the day following when the mortgage term came due. BNS contacted both ING and me demanding a $3700 fee for early repayment of the mortgage. Even after explaining how dates and a calendar work to the unhelpful BNS representative, they still said that I owed the money. The ING representative told me that this was typical, and that they would wait a week before trying to reprocess the mortgage transfer. A week later, the mortgage transferred smoothly and BNS ensured that I would never have any future financial dealings with them.

Justrenter said...

Introvert I feel so sorry for you! The best thing this blog has is Just Jack (Leo S too) as many others have already stated (many times). You are so jealous, you have nothing to contribute in this blog, everyone makes fun of you here and you still don't get it!

DavidL said...

Oh yeah, and isn't it ironic that ING Direct (now known as Tangerine) was bought out by the Bank of Nova Scotia in 2012?!

Just Jack said...

A short supply and strong demand will cause buyers to overbid on properties. As they are caught up in the frenzy of bidding, they make irrational bids over market value. Which is what we are witnessing with bids over asking price.

But that doesn't mean the lender is going to lend more than the property's market value. The buyer will have to come up with a larger down payment or may not even qualify at the higher bid price. The buyer will not be able to complete the deal. And if one of these deals was subject to the sale of another property that other sale will collapse too.

Which is what happened the last time prices began to hit this price ceiling, when the previous peak price hit $625,000.

Deals began to collapse and properties that were thought to have "sold" came back on the market. Causing supply to increase and prices to moderate lower.

For example. A young couple has come and offered you $500,000 for your home which you accepted. Later that week you put an offer on a home for $700,000 cash with no subjects. The young couple's financing falls through and they can't complete on the sale. And since you needed that $500,000 for your purchase - you can't complete either.

Just Jack said...

Rhetorical questions can be ended with either a question mark, an exclamation mark or a period. Using a question mark is probably the most common choice, but it is really up to the writer to use whatever punctuation matches best the intent of the rhetorical question. Add this to your misunderstanding of a simile and a metaphor.

Introvert said...

The best thing this blog has is Just Jack (Leo S too) as many others have already stated (many times).

Well, it's true: there's no accounting for taste.

Rhetorical questions can be ended with either a question mark, an exclamation mark or a period. Using a question mark is probably the most common choice, but it is really up to the writer to use whatever punctuation matches best the intent of the rhetorical question.

Yes, a gifted writer like you should really be given the benefit of the doubt when it comes to issues such as these. What was I thinking?

Marko said...

Monday, March 30, 2015 8:00am

MTD March
2015 2014
Net Unconditional Sales: 661 575
New Listings: 1,351 1,286
Active Listings: 3,769 4,050

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

The DP said...

DavidL -
Thanks for your mortgage renewal tale. I currently have a BNS mortgage, up for renewal in a couple of years, and expect a similar battle. Forearmed is forewarned.

Bman said...

@jwalbren You complain about other posters not backing up certain observations and claims with data, and then you post garbage like this where you don't define your terms:

"Market is well within reach of most working couples."

"Langferd is a shithole hick town with zero planning, its like someone dumped a bunch of plastic walmart looking houses randomly everywhere, it looks horrible and has zero appeal compared to Oak Bay or Cook St etc..."

"It is SUPER easy to get financing today, dual income regular incomes can easily get 800k+ financing w 20% down."

"Most working couples" and "dual income regular incomes" doesn't mean anything. If you take the median income for families in Victoria, which is around $81000 plus a $25000 down payment, that will put you in the neighbourhood of $450k-500k at current interest rates. Of course your mortgage payments are going to take up 45-50% of your income, so as long as you don't mind being in core housing need (CMHC's term, not mine), I guess the market is well within reach of most working couples.

As for this same median income family EASILY being able to afford $800k with 20% down, where are you getting this from? You'd be looking at closer to $650k for maximum affordability, i.e., mortgage payments taking up 45-50% of income.

This sounds like a house poor couple that can afford to vacation in Sooke for 3 nights in the shoulder season, and eat out at the Swiss Chalet every second Thursday. Doesn't sound like much of a life.

As for your wild and emotional claims about "Langferd", of course it has planning. That's why it looks the way it does. You can find the official community plan here: http://www.cityoflangford.ca/EN/meta/city-hall/community-plan/official-community-plan.html
You might not like it, but at least they have tried to create a city centre - unlike Saanich, with it's scattered stripmalls and complete lack of streetlife.

totoro victoria said...

"This sounds like a house poor couple that can afford to vacation in Sooke for 3 nights in the shoulder season, and eat out at the Swiss Chalet every second Thursday. Doesn't sound like much of a life."

I think that sounds fine except for the Swiss Chalet part.

If you have a happy home and you enjoy being a home-owner I'm not sure why it is not much of a life to cook your own food and stay home most of the time.

Bman said...

"If you have a happy home and you enjoy being a home-owner I'm not sure why it is not much of a life to cook your own food and stay home most of the time."

Fair enough. I like having enough disposable income that I don't have to worry about going out for meals when I want, and going on vacation. But I also understand that not everyone cares about those things. I was just trying to point out that by an objective measure like core housing need, housing affordability is a problem in Victoria for a family earning the median household income.

Just Jack said...

Starting to see an uptick in the number of houses listed for sale in the core relative to last year. Listings are up a little over 7%.

But the sales are double this time last year. That's about another 90 house sales this month over this time last year.

The market for houses in the core is strongly in favor of sellers. Either you buck up and pay the price or you sit back and wait for more homes to be put up for sale.

Because, the only time you'll ever get a good deal on a house is when the market is in your favor. And at this heightened demand that would mean house listings would have to go from the current 500 to over 1,500.

The core districts have some 250,000 people.

Would you think 1,500 house listings is out of the question?

If you think it isn't plausible - may you should buy today.

If you think 1,500 listings is a reasonable expectation for a city of our size maybe you should wait.

Bman said...

Does anyone have any information on the resale market for condos in the core right now? Boring 1970s wood frame Victoria special condos seems to sit on the market for months.

dolly1980 said...

Bman, median income in Victoria is skewed lower due to retirees on fixed income or other tax saving methods.

It is very easy to make 150k+ for a couple in a semi professional field.

It sounds like you live in Longford... why are you on house hunt Victoria?

They should have a house hunt lanferd

Just Jack said...

I hope this is a parody. Yet it's so true of the market these days.


https://youtu.be/wcAMtvNfp78

Bman said...

@dolly1980 - No, I don't live in Langford. And I don't want to. That said, I'm sure it's no more dull than your typical suburb.

That's nice that it's easy for a semi-professional couple to make $150k. The reality is of course, that median income in this city was around $81000 during the last census. $87000 for couple-families. Not $150000.

Supernova said...

LeoM, JJ - thanks for thoughts on garage encroachment.

Introvert said...

Marko, regarding 1808 Fairhurst Avenue, can you please tell me the list price, sale price, and days on the market. Thank you.

DavidL said...

@Just Jack
I hope this is a parody. Yet it's so true of the market these days. https://youtu.be/wcAMtvNfp78

The realtor sounds like a braying donkey ... https://youtu.be/gROO7xSTxfY

S-J said...


"It is SUPER easy to get financing today, dual income regular incomes can easily get 800k+ financing w 20% down."

Yes, it sounds so easy, doesn't it. It seems as though buyers today are only looking at what the monthly payments will be. At these low interest rates, then maybe paying $800,000+ for a house is achievable for them. I wonder if these same buyers consider what the $800,000 will be like if they were to end up paying higher interest rates in the coming years. There is a belief that low interest rates will be around for a long time, and maybe some people aren't even considering a higher interest rate. Should they factor that in? I would have thought so.


"Again, appreciate when you post real numbers or real data or information, the rest of the negative rambles are super boring and I suspect most people skip over reading it once they see the ramble started."

Also, maybe you should not skip over the "negative rambles" as you call it. Real estate may not always be rosy in Victoria.

DavidL said...

Looking at the Bank of Canada overnight rate for each December over the past 25 years (1989 through 2014), the average is 4.56%. As variable rate mortgages (VRM) are typically 1.5% higher, the average VRM over the past 25 years has been about 6%. The average for fixed-rate mortgage have been closer to 7%.

Of course, the past does not predict the future ... but what does a $500,000 mortgage look like if the interest rates climbs from 3.00% to an "average" of 7.00%? That monthly payment of $2,366.23 jumps to $3,502.08 - almost a 50% increase!

Convinced rates will stay low forever? Check out today's news: Bernanke Defends Fed Rate Policy As Yellen Moves Towards First Hike

dasmo said...

^ from the above article
"While the central bank chair appears to be doing all she can to ready markets for the coming increase in rates, she was also quick with reassurances that the federal funds rate is not going to go up by leaps and bounds from its current 0%-0.25% target. “Most of my colleagues and I believe the return of the federal funds rate to a more normal level is likely to be gradual,” she said."

DavidL said...

@dasmo

Yup, just like the gradual pullback from QE3, I'm sure that changes to the overnight rate (in both the US and Canada) will be gradual. However, over a few years (by mortgage renewal time), those rate changes can be substantial.

dasmo said...

True. One should be ready for a shock. Thus, do not overextend. Buying an 850k house that you actually can't afford is a fools move... Personally I would see if you can afford your mortgage at 6%. if not you probably shouldn't buy.... OR have money that can pay down the mortgage so you can....

This renewal talk is another good reason one shouldn't put extra payments on a mortgage right now. Better off to keep money in the bank for renewal time (in the form of investments). That will give you a different profile at the bank and other banks...

Marko said...

Marko, regarding 1808 Fairhurst Avenue, can you please tell me the list price, sale price, and days on the market. Thank you.

MLS® No: 346361 List Price: $539,900
Status: Pending Orig Price: $549,900
DoM: 46 Sold Price: $515,000

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

No one knows but I would wager that there are at least 2 years left of low rates in Canada. Maybe not 2 exactly but probably less than 5 years but more than 6 months.

On housing, if you are renting, money is so cheap now that it probably makes sense to buy in a lot in instances.

As I mentioned, I've been thinking about this for a while.

For instance, if you have a family, rents for 3+ beds in Victoria are expensive.

Decent $650,000 house probably rents for at least $2500/ month.

Over a 5 year term, you will spend $160,000 after inflation renting if you do that.

Assuming you have $50k laying around doing nothing because you're waiting to buy a house, over the same term on a fixed 5 year mortgage @ 2.75%, you'll spend about $75,000 in interest on a $600,000 mortgage and another $20,000 in property taxes. Call it another $3,000 for insurance for a total of $98,000

Now I usually go on about opportunity cost of investing and whatnot but if you're going to buy a house, you're going to buy a house at some point. Investing is certainly still to road to wealth accumulation but if you need a house, you need a house and timing is important.

Assuming your maintenance will be pretty low if you buy a newer/ well maintained house, you could end up with roughly $62,000 more wealth in 5 years. After the last 7-8 years of flat SFH prices, I would wager that in 5 years you won't get that house for $588,000 to make the wait & rent worthwhile, which simply wasn't the case 5 -7 years ago when houses had been climbing like crazy.

Interest rates have gone down but the powers that be have dumped a ton of headwind and inflation on top of Victoria RE - CMHC is tougher and there has been 7 years of 2% inflation since prices stopped climbing - call it 15% to be simple.

The opportunity cost on the principal pay down as an investment is the only variable that has a hope in hell of making renters better off, but I think at the moment, with rates where they are and prices where they are, timing for an SFH purchase is pretty good at the moment.

Why not buy when prices look preloaded for another (probably more muted) run and money is cheap?

S-J said...

@ DavidL

Looking at the BOC overnight rates in relation to a house we bought in Victoria (Fairfield). We paid $365,000 in 2001 when the rate was 4.75%. We sold in the $700's when the rate was 2.75%. It sold again in the $900's a year or so ago when the BOC rate was 1.25%. As the rates went down, the price rose. Haven't got a calculator with me, but I wonder how each of those monthly payments would compare, based on the price and rate.

Only glad I wasn't an owner back in August 1981 - 20.3% - Wow!

S-J said...


Sorry, even worse - 21.03%!!

LeoM said...

Without considering catastrophic events, there are only two situations that will cause interest rates to increase:
1. Inflation, and/or
2. The U.S. government increasing rates to prevent bond/Bill/Treasury/reserve currency dollars holders from 'cashing-in' their US dollar holdings.

China and Japan each hold over a trillion U.S. dollars as Treasuries, so the U.S. just needs to keeps its rates fractionally higher to prevent countries from redeeming. Just one-tenth of one percent earns China about $1.2 BILLION in interest each year from the USA.

Inflation is unlikely. Deflation pressures should prevent rate increases of anything over one quarter of one percent in the next 12 months, but likely less.

Poloz is still worried about deflation and treasuries/bonds being redeemed, although he hides it well with his 'Where is Waldo' sentences in his speach last week when he addressed the Canada-United Kingdom Chamber of Commerce last Thursday.
http://www.macleans.ca/economy/economicanalysis/for-the-record-stephen-polozs-speech-on-central-bank-credibility/

dolly1980 said...

@nan

That was the most clear headed post I've read in ages and matches up exactly with what everyone I know is looking at.

Its much better to buy a 650-700k house then to rent, if you need a house to live in.

Those 700k houses will easily be 850+ in a few years, Victoria is the best place to live in Canada hands down.

Leo S said...

Now I usually go on about opportunity cost of investing and whatnot but if you're going to buy a house, you're going to buy a house at some point. Investing is certainly still to road to wealth accumulation but if you need a house, you need a house and timing is important.

Why leave it out?

$50,000 + $273/month (the difference between your rent cost and the mortgage) at 6% earns you $35,000 in 5 years.

Assuming your maintenance will be pretty low if you buy a newer/ well maintained house

You don't get a newer house in Victoria for $650k. Either way you can budget at least $1000-$2000/year in maintenance, so add about $8k for that in 5 years.

So we're at $160,000 to rent the place, or $143,000 to own it. Except you forgot that at 50k down that's only 7.5% down payment, so right off the bat the loan costs you 3.15% more for CMHC insurance ($18,900).

So it actually costs you $162k to own the place for 5 years. Pretty much a wash.

dolly1980 said...

You forgot to include the fact that if you buy a house and do even a little bit of updating to it, it most likely will increase in value in 5 years from now.

Let's say that 650k house goes for 725 in 5 years.

You just "worst case' put 75k in your pocket over investing and renting.

Plus you get a much better quality of life and stability of home ownership, plus better credit.

Leo S said...

You forgot to include the fact that if you buy a house and do even a little bit of updating to it, it most likely will increase in value in 5 years from now.

That's worked out well the last 5 years hasn't it?

As for "a little bit of updating", you gotta add that to the cost of owning of course.

You just "worst case' put 75k in your pocket over investing and renting.

I don't think you know what worst case means.

Plus you get a much better quality of life and stability of home ownership, plus better credit.

As I recall my credit rating was 829 without ever having borrowed money to buy a house or a car.

DavidL said...

@dolly1980
You forgot to include the fact that if you buy a house and do even a little bit of updating to it, it most likely will increase in value in 5 years from now.

Let's say that 650k house goes for 725 in 5 years. You just "worst case' put 75k in your pocket over investing and renting.


I think that you are suffering from a case of optimistic arithmetic ... That little bit of updating costs money (perhaps $20K) and selling a $725K home will cost about $30K in realtor fees, so even with a 75K increase (11.5%) over 5 years, the $20K (2.75%) increase will be far below inflation. You'll be losing money ...

The perceived resale value of a home is intangible ... It is only worth what is actually sells for.

DavidL said...

@Leo S
As I recall my credit rating was 829 without ever having borrowed money to buy a house or a car.

Unless in arrears, mortgage debt is not listed on a credit report - so it has no affect on a credit score.

dolly1980 said...

Prices will rise from here after almost a decade of inflationary pressure and almost a 20% decline from the peak.

I'm talking about 5-10k of updating, that will get you a ton of stuff if you are careful.

You can sell your house with a $799 MLS listing and set the payout/bribe to the buying realtor at $4k.

So selling a house is really only 5k these days for informed sellers.

dolly1980 said...

Also, historically housing has returned 4% a year on average, I put down around 2.4% per year to get to the 75k profit mark, which is very conservative.

Both your guys numbers are way off, I mean come on, anyone reading this and has a level head knows that my numbers are spot on.

dolly1980 said...

HELOCS are reported BTW.

Having a track record of paying off a mortgage payment goes a long way at the banks come renewal or selling/buying.

Havent bought anything before, its not just that "830" number that they look at now, its a much different world.

Plus "830" is not that great.

Leo S said...

anyone reading this and has a level head knows that my numbers are spot on.

An impeccable argument.

dasmo said...

You wear that 830 like a badge! i mean what's that? An A+? Bah. That's no A++! I might have to find my score.... If I do I will post it here.

n.y.k. said...

Lol. Time to invest in shiny floors and a euro toilet. Worst case scenario I make huge $$$!

Woo hoo!

Axis said...

A house might be in the cards for me one day but until then this literally made me lol.

'Plus you get a much better quality of life and stability of home ownership, plus better credit.'

I'm not sure how owning a house would improve a few weeks hiking and surfing in California but I'll think on it.

totoro victoria said...

Seems like there are a number of newer posters repeating old misinformation. For those comparing rent v. buy you might wish to use Roger's calculator linked under resources on the home page.

You can actually run the numbers and have a more accurate estimate of things like the costs of home ownership and lost opportunity costs on down payments.

Also renos generally do not pay for themselves upon resale. There are very few that do and after factoring in lost opportunity costs you lose money on resale: http://brokersmart.ca/home-improvements-langley/

Where you really make or lose money with a home is with appreciation/depreciation on leveraged money.

cycoastal said...

As someone who tends to spend more on travel than on investing, I understand the quality of life point of view and points made in favour of renting over owning.
I think the rent vs. buy decision should be made with full awareness of market and economic conditions as well as personal insight into your saving/spending style, career path, and overall lifestyle choices.
Several years back, when I was thinking about buying a house, it seemed that everything in my price range was a compromise. Sure, I could be a homeowner but with a house I didn't love so we kept renting. Then, I found I house that I absolutely love and that makes the extra cost of buying worthwhile. There are a lot of intangible benefits that absolutely do not make sense financially but I love the garden, the neighbourhood, the comfort and beauty of the house and knowing that a landlord isn't going to move in, sell or raise the rent. That being said, the cost of buying well exceeds renting on a month to month, year to year basis. Forecasting appreciation and increase in value is beyond the scope of my skills and knowledge but I'm confident that we paid a fair price for the house and that it will hold value if something unforeseen were to occur and we had to sell. Although I fell in love with this house I still made sure we could afford the payments if interest rates triple, and we also purchased well under our approved borrowing limit and very importantly, because the house is affordable , we are still able to travel...

Leo S said...

Well said cycoastal.
Buying might make financial sense for a given property or it might not. As long as you make the decision with the knowledge you can handle what could happen then everyone's happy.

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