Monday, March 9, 2015

March 9th 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



575
New Listings396


1286
Active Listings3562


4050
Sales to New Listings
33%



45%
Sales Projection--



Months of Inventory
7.0


This week last year we also had exactly 132 sales.   There are 10% more new listings coming online this year though so the months of declining inventory might be limited.  

213 comments:

1 – 200 of 213   Newer›   Newest»
jwalbren said...

Hey, maybe this is the beginning of the massive crash that has been predicted here every month for 8+ years.

/sarcasm. Anyways, it's always later in the month that the real numbers come in.

We just see a sea of 'SOLD' signs, and every place we look at is sold or a bidding war (e.g. Denman sold for 80k over asking, and 25k more then the crazy max we even thought about.

jwalbren said...

4042 Cavallin Ct sold for over $50,000 asking price.

4021 Hessington Pl

Kangaroo Rd and many many more.

Peter Ch said...

I saw some houses were sold for over asking price at Feb and Mar, and they are mainly lacated at Golden Head area, and also I know the buyers are mainly Chinese. For some reasons, they just like that neighborhood, and they bought those houses over priced. But for the whole Victoria city and for the rest of this year, I do not believe the house market would be hot like these two monthes. I did not see a strong support yet. Anyway, let's see.

Introvert said...

Gordon Head is a great neighbourhood. But I'm a little biased.

Peter Ch said...
This comment has been removed by the author.
Peter Ch said...

Excuse my typing skill, "Located at Gordon Head".

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

Well let's take a peek at Gordon Head.

Specifically houses within a 1 kilometer radius of Lambrick Park.

There is low inventory of 13 houses listed. That's about half the typical inventory of homes through out most of last year.

And 12 homes have sold in the last 30 days. And 16 new listings added during the same time period. Median days on the market is 16.

Ouch! 1 month of inventory and too few homes coming on to the market with the median exposure of two weeks.

If you're desperate to purchase in this hood you'll have to cut your wrists and sign the document in blood. You have no bargaining power at all.

And it doesn't matter how frugal you've been in your life, how good your credit rating is or how much of a down payment that you have. Because the prize goes to the one that can stomach the most debt.

48 hour clauses, no subject to clauses and likely no building inspections. A clean offer to purchase with a good size non refundable deposit.

Orchestrated auctions and Peak Pricing tactics where the last sale sets the low end for new listings.

All of which sets a market for irrational exuberance where prospective purchasers will knowingly pay over market value assuming that the banks will back them. That could translate into collapsing sales if the banks don't play along.

Someone overpaying for a property doesn't in itself put the bank at risk especially in a market that is trending to higher prices. Any mistakes that are made are covered up with rising prices. And the buyers are vetted for the ability to pay the mortgage.

The problem is lines of credit. These higher sale prices set a higher global limit for people who have not been re-qualified for debt servicing.

original Chris said...

http://news.nationalpost.com/2015/03/10/bc-real-estate-boom-wealthy-chinese-buyers/

The kitchen sink is a bit small for 51.8 million.

CS said...

Is this how we'll return to "normal" interest rates?

Alan Greenspan Warns Of Explosive Inflation: "Tinderbox Looking For A Spark"

Just Jack said...

As for the most expensive home in Vancouver. The low interest rate is a meaningless factor for the buyer because it is highly unlikely that there will be a mortgage registered against the title.

That makes it much easier for the money to stay in Canada when the property is re-sold. A lot easier to stash your cash around the world if you had to leave your country quickly.

Since this is about wealth preservation that the exchange rate has made the property relatively cheaper is not of major consideration. What's important is to have a stable country with flexible laws.

A lot of things can be rolled into these private deals other than just the land and improvements.

I've seen a medical practice, a small pre-fab company, corporate shares, cars and boats rolled into the price of these homes. There is no fraud in doing this as long as there is no mortgage or the lender is aware of what is going on.

When it comes to properties of this expense - it isn't about the value of the real estate. It's about the money.

Just Jack said...

Langford and Colwood cities have a combined population of about 33,000 as compared to the core districts that are around 250,000.

With 275 houses for sale that makes one house listed for every 120 souls in Langford and Colwood. If that same percentage was applied to the core then we would have over 2,000 listings. But we only have around 475 homes listed.

The most responsive answer that I get from people in Victoria to why they're not listing their home is because there isn't anything worthwhile to buy. In other words low listings beget even lower listings. Instead they have chosen to remodel or rebuild their existing home.

That stagnation in listings isn't abnormal it's symptomatic of a shallow market. A healthy marketplace needs selection otherwise prospective buyers will change their preferences. Think of the marketplace as a pendulum with the activity sweeping in from the outer areas and then changing course back to the outer areas that have far greater selection of homes than the core does.

totoro victoria said...

Many people who want to live in the core are never going to buy in Colwood instead no matter how few listings there are.

In my experience, low listings in desirable areas leads to bidding wars.

dasmo said...

so they are buying full on companies under the table and using the house to launder these transactions? So in orher words, only wealthy Chinese are paying the "real" prices in Vancouver? Interesting theory.....

Leo S said...

> Alan Greenspan Warns Of Explosive Inflation: "Tinderbox Looking For A Spark"

Wow the comment section on zero hedge is worse than youtube.

Just Jack said...

You may never leave your hood Totoro but others will. And it isn't just low listings. It's the relationship of listings to sales and how fast inventory is increasing or decreasing. As per econ 101, markets always move towards equilibrium. If the housing is priced too high, sales will slow and inventory will build. And prices will moderate lower.

And I would ask if you could rephrase what you said Dasmo as I don't understand. There is no fraud or illegal activity in what they are doing. You can include and exclude most anything you want in a contract including tangible and intangible assets, furniture, appliances, copy rights, etc. It's a private contract between two people there are no regulatory police when it comes to this. The only time any regulations come in to play is when there is a mortgage.

You may have a business that also owns land, building and equipment. When you sell, you sell them all together not separately. It's up to the accountants to figure out the split.

The title may be clear in BC but it could be bought by a corporation or an individual in the foreign country with cash. It depends on that country's generally accepted accounting procedures on how it would appear on those books.

In BC all we care about is that they pay the property purchase tax.

We have a flexible arrangement just pay us the money and we don't ask questions.

totoro victoria said...

Transactions for residential homes which see the purchase of a business included in a house purchase would be highly unusual.

From a taxation, liability, and ppt point of view, ill advised.

I never said others wouldn't move to Colwood. I said many won't. And people will only hold out so long hoping for a price decline. For example, a lot of people with kids want a permanent base in the school district they have chosen.

As a result of low listings and no bursting of a bubble in sight we may be entering a market in which there is a the kind of competition which sees buyers offering over asking price in the core despite the fact that Colwood has newer homes at a discount.

Just Jack said...

I understand your logic, why would anyone pay more property purchase tax than they have to?

That's a decision left to the accountants in the host country to decide. In BC we don't care and we don't ask questions. Like I said, it isn't about the value of the real estate, it's about wealth conservation and having a sale-able asset in a safe country. Better to pay 50 million for a property, and the PPT, that you can re-sell for $35,000,000 than leaving it in the purchaser's country and have it all seized.

Just Jack said...

Once your kid starts say in the Oaklands catchment they can remain in that school district even if you move to Royal Oak.

The difference between public schools in academic performance isn't significant. The difference is mostly that the schools in the western communities are newer. Consequently, the newer buildings are safer and won't rain bricks down on your kids head during an earthquake.

Have you seen the climbing wall at Stelly's!

You're raising your kids in an inner city school - what do you expect to get - maybe a hot lunch?

CS said...

Wow the comment section on zero hedge is worse than youtube.

Question is, is Greenspan right that the $3 trillion in excess reserves parked with the Fed a liquidity balloon looking for a pin?

The ZH commenters seem mainly to be aggrieved at the fact that Greenspan is responsible for the mayhem he now predicts. But none seem to disagree with his prediction. Are they all wrong?

original Chris said...

If Alan Greenspan is right real estate will take flight.

totoro victoria said...

JJ - your knowledge of the rules that apply to purchases of RE by foreign buyers or foreign corporations is a bit off.

In BC we rely on CRA to collect the provincial taxes. CRA has a different take on the matter of foreign buyers than you do. (just try to avoid paying the 25% withholding tax on rents for example) As do banks and insurers. As do lawyers when dealing with cash purchasers.

Also the "regulatory police" do care how you account for purchases of real estate that include chattels or businesses. So do the police police if you are using this as a way to evade taxation or launder money.

totoro victoria said...

Once your kids are at Oaklands do you want to schlepp them across town from Royal Oak twice a day?
Something makes me think you have no kids.

totoro victoria said...

Agree that the schools are generally newer in Colwood.

Oak Bay schools have been earth-quake proofed. Fairfield's elementary is new build. Oak Bay High is being rebuilt as we speak.

If the big one hits it is a crapshoot anyway.

Just Jack said...

I don't see how CRA has anything to do with the Property Purchase Tax?

Who said the property is going to be rented? That's a strawman tactic.

How can you be evading taxes when your paying more than you should in PPT?

The police don't investigate tax evasion.

Money laundering? This is a legitimate transaction between two private individuals where is the money laundering? Can you prove the property is not worth the $50,000,000? And even if you could there is no law that says people can't pay more than the property is worth.

Suspecting that it is money laundering is one thing - proving it in a court of law is something different.

Besides it's good for our economy. If money laundering is suspected it isn't BC's or Canada's job to enforce the rules it's the originating country that loses the currency.

Introvert said...

... All of which sets a market for irrational exuberance where prospective purchasers will knowingly pay over market value assuming that the banks will back them.

To Gordon Head homeowners, this is music to our ears. (Not that I'm planning on selling any time soon.)

A healthy marketplace needs selection otherwise prospective buyers will change their preferences.

Nope. People don't change their preferences that easily. Instead, most will choose to pay a bit more to get what they really want.

Many people who want to live in the core are never going to buy in Colwood instead no matter how few listings there are.

In my experience, low listings in desirable areas leads to bidding wars.


totoro's right, as usual. If I've said it once, I've said it a thousand times: no one flips a coin between Saanich East and Langford. Or between Fairfield and Colwood. Etc.

As per econ 101, markets always move towards equilibrium.

Sometimes they don't. That's why we have booms and busts. Also, economics isn't like chemistry: much of economics is open to wild and varied interpretation.

Question is, is Greenspan right that the $3 trillion in excess reserves parked with the Fed a liquidity balloon looking for a pin?

The question is, Who the fuck cares what Alan Greenspan thinks considering his abysmal track record?

Once your kids are at Oaklands do you want to schlepp them across town from Royal Oak twice a day?
Something makes me think you have no kids.


In Just Jack's world, that's no problem at all. And I'm pretty sure he has kids.

Leo S said...

But none seem to disagree with his prediction. Are they all wrong?

Actually there is quite a bit of skepticism given Greenspans record of being wrong

Leo S said...

Once your kids are at Oaklands do you want to schlepp them across town from Royal Oak twice a day?

Yes, lots of people drive kids to further off schools.

Leo S said...

Nope. People don't change their preferences that easily. Instead, most will choose to pay a bit more to get what they really want.

Except the market contradicts you completely. Let's say for years houses in the western communities are three quarters the price of houses in the core.

Now the market in the western communities is very weak while the market in the core is pretty strong. Your theory is that the prices will just diverge, but that implies that people are changing their preferences. For years the premium was a certain percentage to live in the core, and now the premium is suddenly supposed to jump way up?

Leo S said...

Many people who want to live in the core are never going to buy in Colwood instead no matter how few listings there are.

This is of course total nonsense. Everyone has a preference and everyone has a price to change that preference. If you love Oak Bay but houses in Langford are a million dollars cheaper then you will live in Langford.

The question is only what price differential buyers can afford to pay for their preference.

Just Jack said...

They don't have to move to Colwood.

The buyer can shift preferences from Gordon Head to Mt. Tolmie or Camosun or Mt. Doug or Sunnymead or Broadmead or Royal Oak.

Introvert, I've never seen you write an expletive or use contractions. Let alone write more than three sentences. You seem to have a different writing style now.

-Has one of your testicles finally descended.

mooselessness said...

Of course people move west based on price. Almost every family I knew in Sunriver, the Sooke housing development, moved there because of price. My own family moved from renting in the core to Sooke because it's what we could afford at the time and we thought we could handle the commute.

(We did handle it -- for about six years. In hindsight, much as I love Sooke, we would have been better off financially buying and holding in the core. Frequent home sales aren't good for the pocket book.)

Introvert said...

Nothing says "grown man" like not knowing how to write more proficiently than a fourth-grader.

totoro victoria said...

I would not move out of the core area. I'd rather have a suite or a townhouse and live in an area I love. Even more, I'd rather live somewhere that I don't need a car.

There are lots of people with similar preferences that drive the market and will continue to drive the market. Location is more important than bigger/better housing for them and this is what keeps prices higher.

If I could not afford a house in the core area I would rent and perhaps buy a home to rent out in another area or otherwise invest money.

As far as shifting from Oak Bay or Fairfield to Camosun - that is a pretty easy shift. Much harder to move to the Western Communities.

I don't think people are suddenly changing their preferences, I think there is limited availability in the core areas because markets have stayed flat for a while. No incentive to sell if you don't have equity to invest in the next place. The property ladder stalls.

JJ you said all BC cares about is PTT when it comes to foreign buyers. I said that is untrue. See what happens upon disposition of the asset with respect to capital gains and the other items I listed. See what happens when you try to claim a loss upon disposition of a property that included payment for equipment or try to claim depreciation on the equipment itself.

The RCMP do work with CRA on criminal investigations of tax evasion: http://www.cra-arc.gc.ca/gncy/cmplnc/crmnlnvstgtnsprgrm/menu-eng.html

totoro victoria said...

And you are just plain wrong about money laundering. Canada has laws on this and an obligation to enforce these laws.

In 1989, the G7 identified money laundering as a significant international problem. As a result, the Group of 7 countries founded the Financial Action Task Force on Money Laundering.

This task force is an inter-governmental body dedicated to developing policies to combat money laundering and terrorist financing.

http://www.fintrac-canafe.gc.ca/fintrac-canafe/antimltf-eng.asp

http://www.rcmp-grc.gc.ca/poc-pdc/launder-blanchim-eng.htm

Just Jack said...

Totoro, you're setting up strawman arguments and debating with yourself now.

And even with the advantage of debating yourself you're still losing the argument.

Leo S said...

I don't think people are suddenly changing their preferences

If the price differential increases substantially then it appears they are.

I think there is limited availability in the core areas because markets have stayed flat for a while. No incentive to sell if you don't have equity to invest in the next place. The property ladder stalls.

Doesn't explain the listings glut in the western communities. By your theory they should have even less inventory because houses there lost more value.

Just Jack said...

Introvert, if you're going to rebut do it with the style your mother had when she was writing under your handle. She wouldn't make the same mistakes as you.

She kept it safe, no contractions, no expletives no more than three sentences. And most importantly no thoughts.

Dave said...

Just Jack said "You're raising your kids in an inner city school - what do you expect to get - maybe a hot lunch?"


A better class of people to grow up with! No chance in hell we're moving to the Western Communities. Rather rent a dingy basement suite than have to do that.

totoro victoria said...

I think that the market in the western communities is influenced by all the new builds. Unlike the core, there is room to grow - and it has. the absorption rate slows and prices drop when there is more product on the market.

Butter09 said...

jwalbren said...
4042 Cavallin Ct sold for over $50,000 asking price.

4021 Hessington Pl

Kangaroo Rd and many many more.


Did 1691 Tampico Pl. go over asking too?

Tren said...

mark

CuriousCat said...

I know a family that specifically bought in Langford because they wanted their son to be on a specific hockey team and the dad considered Juan da Fuca to be better for that. My own personal experience is that people that have never lived in the Westshore communities consider it as "not that bad" and they all think they'll be able to make it work for them and the trade-offs are worth it. Once there, you suck it up. But once you get out you wonder what you were ever thinking and no way in hell would you ever go back! I would rather give up a car, get a suite (ugh), live in a smaller house, than go back to the Westshore. Oh and those friends that moved to Langford a year ago - we never speak anymore. They might as well have moved to Mars. She never wants to come into town anymore after having sitting thru the commute home, and why would we ever want to go there? Maybe we could have a hot-dog at Costco. I should call her... hehe

CuriousCat said...

I meant to write "sat" not "sitting". Also wanted to add that I never felt so isolated as I did when I lived in Langford. None of my friends and family ever wanted to come to my nice new townhouse for a visit. If I wanted social interaction I had to go out and get it. I'm a homebody so this didn't bode well for me. Now I live in such a central, convenient location I literally have people simply "stop by" without calling! I know that would bug the hell out of a lot of people but I love it!! My home is a hub, and though smaller than what I could afford in Langford, I've had more people packed in my house than I ever imagined. I've now been spoiled by being able to walk to a grocery store, coffee shop, mall, park, in less than 5 minutes that I take it for granted. My family from Winnipeg remark that the new burbs in Langford and Sooke feels more familiar to them. It's the neighborhoods in the core than make Victoria special and different from the rest of the country.

caveat emptor said...

Langford and the Westshore in general are fine places on their own merits. More affordable, possible to own a bigger lot, great access to trails and nature. The problem comes if/when you have to commute into the core. Lots of studies have shown that (1) Commuting is one of people's least favourite activities, (2) People underestimate how much they will hate commuting, (3) Commuting time is inversely correlated with happiness

Numbers Hack said...

We are so spoiled.

A 30-60 minute commute is a regular occurrence for almost all Cdn cities with similar populations.

Try Downtown Vancouver to PoCo haha, Downtown T.O. to north of the 401, and Downtown Montreal to CSL...ah Victoria to WC is not so bad!

Numbers Hack said...

Sorry my examples are all larger cities. But point is, our grass is pretty green.

Spend a lot of time outside of Vic. My last stop, 5 kms = 1.5 hours. City of 25 million people. Faster to walk, but the air was too polluted.

Advice, before you buy, take your wife and spend $10 grand to see the world and come back knowing that we are indeed in a special place in the world!

Just Jack said...

I agree with you Totoro, the Western Communities is dominated by new builds and newer housing constructed in the last dozen or so years. In these districts it's mostly detached houses suitable mainly for first time owners and middle income families.

Let's not disregard the core, where the market is dominated by condos suitable mainly for first time home owners and small family middle income households.

Absorption rates are a bit tricky to calculate. The absorption rates can be different for the type of dwelling and if it's new or a pre-owned homes.

Detached housing has a short construction period relative to condos. Houses designed for first time home owners and middle income families have a construction period under a year and most often under six months. You can't expect that kind of construction schedule for a condo tower.

That makes calculating an absorption rate for new detached housing simple. It's just the days on market or DOM.

Condos requires a lot more research as you have to look at how much inventory is coming to the market over the next several years while the tower is being built.

So what is the median days on market for new house builds in the western communities and in the core?

In the core districts it's 46 days on the market. In the western communities it's 59 days on the market. I don't consider that to be a significant difference between the two areas.

I'm not disagreeing with you Totoro, I just thought I would explain to those who want to know what most people mean when they talk about absorption rates.

Just Jack said...

Since I'm trying to prep my yards for spring I can tell you we don't have the greenest grass. What we have is moss.

caveat emptor said...

"We are so spoiled."

So true. Another key to happiness is being grateful for what you have. Travel and seeing new places is wonderful, but for many people travel makes them realize how great home is, especially when home is Canada one of the wealthiest, safest, healthiest, longest living, most stable countries in the world.

And re commuting. Colwood to Victoria is a puny commute in the global context. It is only in comparison to other possible local options: Gordon Head to downtown bike via the Lochside or South Oak Bay to downtown bike via the waterfront that it seems unappealing.

"Try Downtown Vancouver to PoCo"
I did for two years - soul sucking.

Just Jack said...

You forgot humble.

Introvert said...

Did 1691 Tampico Pl. go over asking too?

I noticed that house for sale on one of my walks and wondered how fast it would sell.

It does seem like Gordon Head is starting to really heat up. Nice!

Lots of studies have shown that (1) Commuting is one of people's least favourite activities, (2) People underestimate how much they will hate commuting, (3) Commuting time is inversely correlated with happiness

These are facts.

Sorry my examples are all larger cities. But point is, our grass is pretty green.

Yes, I suppose. So that makes it awesome that I'm able to live in the greenest grass of the city that already has some of the greenest grass in the country (to carry the metaphor further).

Introvert said...

I personally don't like the vibe in the Western Communities, especially in Langford. Langford's goal, it seems, is to bulldoze every tree and pave over every green space to erect, as fast as possible, yet another housing development. There doesn't seem to be much prudent planning for the future going on. Plus, it's ugly.

Dustin said...

Tampico pending for $524,000. 13 DOM.

CuriousCat said...

Tampico looks too much like the house I grew up in, in Winnipeg. You get a good size lot, and lots of square footage, but man there is a lot updating that needs to be done. Different colour carpets, wood paneling all over the basement, an original kitchen (not charming), original bathrooms. Someone paid over ask and then they can easily put in another $50k in it to update it. First time on market - I'm sure the original owners are laughing all the way to the bank! Good for them. :) Oh and in Vancouver this house would be worth double, right?

Chris said...

Gordon Head to me is one of the least appealing areas of Victoria. It's the definition of cookie cutter. It reminds me a lot of the older areas of Langford. Tampico is a good example. I was out in GH this morning, trucks and vehicles everywhere. Every house seems to have that boxy curb appeal of 1970s. Tiny split entries with walls and stairs as you enter. A better cookie cutter choice would be Cedar hill or Mt Tolmie. At least there’s some hilliness to break up the monotony and you are that much closer to town.

CS said...

Who the fuck cares what Alan Greenspan thinks considering his abysmal track record?

Who cares what Alan Greenspan thinks was not the question. The question was: is Alan Greenspan, or anyone else for that matter, correct in saying that the $3 trillion (actually closer to $2.5 trillion) in excess reserves parked with the Fed by US banks a "balloon of liquidity looking for a pin"?

I don't think Alan Greenspan's track record — which isn't all bad, e.g., his long held views about gold — has much to do with whether his concern with excess reserves is valid.

In particular, does the existence of these reserves imply the potential for an extremely rapid increase in money circulation, and hence inflation, should a minor shock to the system, e.g., a return of hundred dollar oil, a slump in the US dollar, etc. create a blip in inflation that prompts a change in general outlook?

patriotz said...

A 30-60 minute commute is a regular occurrence for almost all Cdn cities with similar populations.

Try Downtown Vancouver to PoCo haha, Downtown T.O. to north of the 401, and Downtown Montreal to CSL...ah Victoria to WC is not so bad!


It is one thing to have an inflated opinion of Victoria and another to be outright delusional (or just lying) about how big it is.

I'm pretty sure that Victoria has in fact the longest average commute of any Canadian metro of similar size (e.g. Halifax). Might have something to do with having by far the highest housing prices in this group.

$389K Central Halifax

Introvert said...

Gordon Head to me is one of the least appealing areas of Victoria.

Everyone has their preferences.

I love Gordon Head because it's beside the ocean (it has five city parks with beach access, more than any other Saanich community); it's close to downtown without being too close; it has its own recreation centre and pool; and it has an excellent selection of schools within it (two elementary, two middle, and two secondary), which means most kids living in Gordon Head are able to walk to school. Personally, I'd be willing to pay a premium just for that.

totoro victoria said...

"I'm pretty sure Victoria has in fact the longest average commute... (eg. Halifax)."

Wrong.

Halifax residents not only have a longer commute on average, just wait for a blizzard and see what happens.

http://www12.statcan.gc.ca/nhs-enm/2011/as-sa/99-012-x/2011003/tbl/tbl02-eng.cfm


LeoM said...

A couple comments about recent posts.

Gordon Head, north and east of Shelbourne St. and Feltham Rd., is a great area to raise kids; that's what it was designed for in the late 1960's and it still has excellent family facilities today. Top tier schools with excellent teachers, good students who predominantly stay out of trouble, a Rec Centre, lots of sports involvement, involved parents, many parks for kids and playing fields for soccer, baseball, rugby, etc. It feels like a small community for young families in each neighbourhood surrounding each school, people know each other and they are friendly. And it's important to note that the kids rarely have to cross busy streets to get where they are going. It's also interesting that many kids from the 1960' 70's and 80's who grew-up in Gordon Head ended up buying houses in Gordon Head to raise their family.

One anther topic, Alan Greenspan's prediction about the 'pin'.
The point here that almost no one is talking about is the US Dollar as the global reserve currency and how countries and business are slowing abandoning the US dollar for international transactions. The US still has 61% of the Reserve Currency business, but in 2001 they had 72%. China is moving fast and methodically to gain an equal share of the reserve currency business; even though the renminbi is not yet an official reserve currency. China does this with currency swap agreements such as China and Japan recently signed. These agreements mean the US dollar usage will quickly decline between Japan and China.

What does all this mean for the USA? It means that those many trillions of dollars they printed were first spent by the US government to pay their bills, then those dollars were cycled into the reserve currency stash that the US government never had to redeem, plus the US gets a fractional percentage from each reserve dollar transaction.
Now that the US Reserve currency demand is diminishing, the US government is forced to redeem those surplus dollars when countries and businesses don't need them for international account settlement. Eventually this will cause extreme hardship on the US government, especially when countries like China cash-in their surplus dollars and redeem their US Treasuries when the US dollar is high and their renminbi is low, like now.

I think Greenspan's fear is not just the $3 trillion parked at the Fed, but also the many trillions more in surplus Reserve Currency dollars set to be redeemed by countries and businesses throughout the world. China seems convinced that US paper dollars are just debt in disguise and will someday be nearly worthless, so watch China's renminbi closely for the next few years. Doctor Copper is still King, but Professor Renminbi is gaining ground.

caveat emptor said...

"You forgot humble."

Why should Canadians be humble about what a good place Canada is? We are a good place on a whole lot of objectively measured criteria. Not perfect but good.

mooselessness said...

Our lease runs out next summer, so I've broken out the rent/buy calculator. But much depends on the expected appreciation.

The spreadsheet came with a default of 2% appreciation per year. If you were estimating the next 10 years for Victoria, does that seem like a plausible assumption to you?

Even adding in one year with a -5% return makes a big difference to the results.

(I'm focusing on ten years, because after that time, we may have reason to sell and move elsewhere.)

totoro victoria said...

I think 2% is a reasonable estimation. Much less than the past three decades on average.

Some economists estimate the long-term average appreciation going forward at 3.5% per year.

Just Jack said...

What you should be asking is...

Can BC's economy go a decade without experiencing an economic recession? Historically speaking the answer is not very likely as our economy never has.

Our last recession was in 2008-2009.

Any recession that happens this time, unlike the last recession, will hit us when we have low employment and high personal debt. These factors make us susceptible to a larger downturn in housing starts and prices than we experienced in the last decade.

The construction industry and employment rate hasn't recovered to pre-recession numbers in BC and based on history we're do for another recession. And this time around the government doesn't have the ability to drastically reduce interest rates to stimulate consumer spending. And lets not forget baby boomers. In 2025 they'll be hitting 80 years old. Not everyone lives to 84. A little more than half of the generation raised on leaded gas will make it to 80 depending on if they're male or female.

In my opinion, a sustained positive increase in housing prices every year for the next 10 years isn't plausible.

-I think I waffled through that pretty good.

Leo S said...

Some economists estimate the long-term average appreciation going forward at 3.5% per year.

What economists?

nan said...

Re house price increases, David Schiller had done a lot of work to understand this number. It roughly tracks inflation over a long enough period. Over short periods though, all bets are off. Unpredictable things like construction, immigration rates. and the availability of financing always cause trouble modeling this out. I use about 2.5% in my analysis.

totoro victoria said...

If you want a specific source google "SPECIAL REPORT TD Economics LONG-RUN RATE OF RETURN FOR CANADIAN HOME PRICES"

Here is a related article with some scenarios re. the future of house appreciation:

http://www.moneysense.ca/columns/real-estate-vs-the-stock-market

No-one has a crystal ball but IMO 2% seems reasonable going forward.

totoro victoria said...

"In my opinion, a sustained positive increase in housing prices every year for the next 10 years isn't plausible."

Who said it would be each year?

Look at the history of house appreciation in Canada and you'll find some years go down and others up but over time houses have always gone up - and by much more than 2%.

In Canada since 1980 the average rate of appreciation has been 5.4%.

Death said...

The advantage of newer homes in the westshore have over gordon head death boxes is the lack of lead paint, asbestos, shag carpet and fake wood paneling as well as modern layouts and crazy things like proper insulation and perimeter drains. Sure you could pay over asking for a dump in Gordon Head and spend 50k on it but you'd end up owning a dump in gordon head with a new kitchen.

Leo S said...

70s houses generally have neither lead paint or asbestos.

LeoM said...

If anyone is estimating an annual average appreciation of 3.5% or even 2% per year, then they must also be estimating zero downward pressures; No interest rates increases, No recessionary pressures, No economic surprises of any kind. This is a very unlikely scenario, especially given the likelihood that the Americans will be forced to raise interest rates soon and that will cause all three downward pressures in Canada: interest rate increases, recessionary pressures, and many economic surprises.

totoro victoria said...

Leo, you asked for a source and then you don't even read it and start speculating that it must not have accounted for any of these factors, which is false.

nan said...

that should have been Robert Schiller...

Just Jack said...

In nominal terms, house prices in the core are up 54% since the first quarter of 2005. Assuming past performance is the best indicator of the next ten years, Totoro's numbers would be correct.

The tricky part is to consider if those conditions that existed in the past are reasonable assumptions of the future? During that decade we did have some historic price escalations and a black swan event.

If you look back at the first quarter of 2010 or 5 years ago. Prices in the core are down 4.5%. This excludes the major price run ups and the 2008-2009 recession but a low interest rate environment to stimulate consumer spending. We spent our way out of the last recession.

So is it simply a coin toss?

dasmo said...

Not a coin toss. Odds are much better that house prices will be higher in ten years than lower.... You don't play poker do you JJ...

mooselessness said...

@dasmo, Well, the question isn't "will they be higher or lower" but "will Victoria prices be *22% higher* in 10 years" which is what a 2% annual increase works out to.

If you bought a $600,000 house today, would you expect it to be worth $731,000 in ten years?

If it's only worth $650,000, then in financial terms, you're better off renting. (Setting aside other less tangible considerations for now.)

nan said...

@Leo -

I guess for context, I've been a bear for about 10 years. in 2004-5 when I started really paying attention, things looked nuts and I couldn't really afford to buy anything anyways. I did a ton of analysis though and came to terms with the simple fact that folks were just nuts. And I think for a long time I was right. With interest rates & prices where they were at the time, owning cost somewhere near double-triple what it cost to rent at the time. Expected price gains were factored in to the prices people were paying and as a consequence, prices were nuts. I have rented for a long time.

Since then,

1. I missed out on a couple years of run up but Victoria property prices haven't really done much since 2008. It is now 2015. In and of itself, that is a long time for prices to do nothing.

2. Interest rates are down and will stay down for a long time. No matter what anyone says, the entire US and Canada are awash in debt. This will not change in a meaningful way for the foreseeable future. I checked yesterday and total consolidated debt per family in the US is about $720,000, up from about $650,000 the last time I checked 2 years ago. Regardless of "positive" economic information coming out of the US, they are still in no position to bear a meaningful interest rate increase for a long time at all levels. Even if the US does end up increasing rates a little bit, I think it is more likely that Canadian interest rates stay lower, the currency suffers and inflation kicks in. This is what small countries in rough economic shape do to be able to spur exports with a cheap currency. Even with $USD oil prices very low, oil extraction gets cheaper in Alberta when labor is priced in $CAD. I expect interest rates to stay low and $CAD to take the brunt of any monetary policy movement going forward.

The combination of flat/decreasing house prices and what looks like will be a persistently low interest or even decreasing rate creates a pretty compelling reason to buy which I am exploring right now.

The opportunity to borrow at a low and likely stable rate and buy a similar property puts you in roughly the same place cash wise (after ALL costs and reasonable 6% stock market & 2.5% property price increases) you would have been if you rented, but you get all the intangible stuff of owning for free. If house prices go up more, you win big. After the last 7 years, I don't think good areas in Vic will suffer much even under the worst circumstances. Too many owners are pensioners & government/ other employees with reliable cash flow and no understanding of real versus nominal concepts.

In the mid term, there may not be upward price pressure but the widely held admission that the world is in poor shape combined with the fact that Victoria housing hasn't done anything in 7 years has created a view in me that housing in Victoria hasn't been this cheap or as de risked in 7 years. Thoughts?

totoro victoria said...

"If you bought a $600,000 house today, would you expect it to be worth $731,000 in ten years?"

Yes. I would.

Had you asked me this question five years ago I would have said no though.

Prices have been flat for long enough that I think the big price gains leading up to 2008 have been compensated for and appreciation should keep pace with inflation over the next 10 years.

Introvert said...

Leo, you asked for a source and then you don't even read it and start speculating that it must not have accounted for any of these factors, which is false.

Because Leo is always right, he has no need to read anything.

SJ said...

We differ on interest rates nan. I think we go from a 3% fixed mortgage to a ~5% fixed by ~2020 and to everyone's surprise Vic prices launch as a massive, unprecedented herd of buyers jump off the fence to lock in ;) Why rising rates? Wage growth and core inflation starting to build, economy improving (i think our gdp outperformed US in Q4), population influx (boomer tsunami starting to hit Vic), our vacancy rate is nearing zero, US & Chindia starting to rock n roll again, massive/unprecedented office & commercial projects getting underway in Vic (literally hundreds of millions worth), ...... and lastly we'll follow the US raising their rates.

http://www.timescolonist.com/business/summer-start-is-goal-for-two-major-building-projects-in-victoria-1.1776656

http://www.timescolonist.com/big-picture-greater-victoria-back-in-the-limelight-1.1791073

SJ said...

Similar to how 5yr mortgage rates rose from ~5.25 to ~7 between 2004 to 2008 and prices launched.

To Death, you don't have to be ashamed to live in western comm's
…as long as you don’t live in Duncan ;)

dasmo said...

Rates will go up with wages unless financial engineering fails. I only have a few years of Halibut in me i think. Then I will start growing hair and claws. Especially if we see 1.99% fixed mortgages. I really want to see some evidence of wage growth in combination with lower rates. My hair would grow pretty fast as then... That said, I think your are still fine to be renting right now....

Leo S said...

Leo, you asked for a source and then you don't even read it and start speculating

Because Leo is always right, he has no need to read anything.

Or maybe there is more than one person in this world named Leo and neither of you pay attention.

Leo S said...

Then I will start growing hair and claws.

What kind of bull has claws?

Death said...

Lead and asbestos are common in homes until the 1990s. So if you think you don't have it, you probably do. You might already have asbestosis in fact.

totoro victoria said...

Yep. Two Leos and two different comments on that. Sorry about that Leo S.

Leo S said...

You might already have asbestosis in fact.

Probably on death's door.

Leo S said...

NP. Interesting article.

nan said...

"Why rising rates? Wage growth and core inflation starting to build, economy improving (i think our gdp outperformed US in Q4), population influx (boomer tsunami starting to hit Vic), our vacancy rate is nearing zero, US & Chindia starting to rock n roll again, massive/unprecedented office & commercial projects getting underway in Vic (literally hundreds of millions worth), ...... and lastly we'll follow the US raising their rates"

1. Boomer population influx = old people with desire to invest = higher prices for houses / lower interest rates (supply & demand of $)
2. Vacancy rates = higher prices, accommodative monetary policy to get new houses built/ keep prices under control (This is what the CMHC was originally built for after the war)
3. US has too much debt and has what looks like adequate control over interest rates for the time being. If you think they are at the end of that rope of control, you needn't look any further than Europe where the interbank rate is negative.
4. China & India are as buried in debt as everyone else and have their own problems. I would expect these regions to grow strongly going forward, but nothing like the outsized debt fueled growth we have seen over the last 10 years (unless the debt keeps growing that is)
5. Commercial projects in Victoria don't mean anything other than that rich developers agree with me and are taking advantage of low rates to build when money is cheap instead of some point in the future when there is actually demand for the space. The commercial vacancy rate in Victoria is unprecedented.
6. Following the US rate wise might be popular belief but I don't necessarily think we will. Canada doesn't have the industry or the ability to create jobs in new industries that the US has - The US can dig itself out of most things by innovating (as it is doing now) but Canada needs a low dollar to spur demand for resource & other exports to dig its way out of our hole. 70% of our food is grown in Canada. If Canada can drive exports to drive up CAD$ incomes to help pay off $CAD debt while feeding it's people at the same prices, people's incomes grow, they eat and keep their houses. That is a lot more important than raising rates keeping the dollar higher to get you a deal on a flat screen tv. We are Canada and will do what is in our best interests. Following the US for the sake of following the US isn't even on the table as far as I'm concerned.
7. GPD % growth are roughly equal
8. Inflation in Canada = US @ roughly 1% in January.

So in conclusion, none of those things really convince me that interest rates in Canada will go up, no matter what the media says.

LeoM said...

Old History
In the late 1920’s Germany began printing exaggerated amounts of money. This threw Germany into a state of super inflation. Inflation reached the point where millions of marks were worthless. Cartoons of the time depicted people with wheelbarrows full of money who could not buy a loaf of bread. With the approach of a world crisis, foreign lenders withdrew capital from Germany.

Recent History
During the last few years the USA has been printing exaggerated amounts of money. Foreign lenders are fearful of a pending economic crisis, so foreign lenders are withdrawing capital from US dollar exposure. China is rapidly reducing its holdings of US dollar Treasuries as are many others. Sound familiar?

Now the Americans have a dilemma; they need to avoid the Germany history repeating itself in the USA. The USA has that $3 trillion parked at the Fed about to be popped by Alan Greenspan’s pin and the USA has to deal with foreign lenders dumping their surplus Reserve Currency US dollars and the USA has to deal with that two thousand BILLION dollars that foreigners hold in US Treasuries that the foreigners are slowly redeeming. What will the Americans do with those buckets of surplus dollars that no one wants?

The US government needs to keep all those wheelbarrows full of US dollars from being dumped on the US doorstep and redeemed – they need to somehow encourage people/companies/countries to hold US dollars, rather than dumping them. But how? The answer is simple – manipulate the US dollar to appear stronger and raise interest rates so investors in US dollars get a better return on their US dollar investments. This will encourage people to stop redeeming and start investing in US dollars. A simple solution that’s not unique or new; it’s tried-and-true. If the government does it, then it's legal; but if you or I do it, then it's called a Ponzi Scheme.

Current History, from This Week:
The US is working overtime to make their dollar stronger and hinting at rate hikes coming soon. It’s already starting to work, the ‘experts’ are saying America is gaining strength and it’s dollar is strong and it’s time to hold USD, not fold.
But, the writing is on the wall for anyone who cares to read it.

America will survive, they always do. In fact they often thrive during a crisis because of their huge size, small countries like Canada must follow their lead or be left behind. Our interest rates will climb in unison with the American rates. And the American rates will rise to whatever level is necessary to prevent all those surplus US dollars from being redeemed.

Introvert said...

LeoM, change your goddamn name.

LeoM said...

Nan - the reason Canada must follow the US rate increases is exactly the same as why the US will raise rates. If Canada did not raise rates to closely match the US rates, then Canada will have the same problem as the US -- investors will dump Canadian dollar investments and re-invest in US dollars. Then Canada will have the wheelbarrows full of redeemed paper dollars that no one wants and a loaf of bread will cost one wheelbarrow full of paper dollars.

dasmo said...

oops horns ;-) been hanging out with too many bears...or beers. Maybe it will be claws after all.

Just Jack said...

Too much money buying too few goods. The only solution would be to make money more expensive by raising interest rates.

Is it to any nations advantage to rip open this bag of money and destroy their own economy along with the USA?

In the good old days when Russia and China were ideologies that might have happened. But today the Russians and Chinese are mob bosses and gangsters. How likely is it they they would fall on their own sword just to take down the US economy?

nan said...

Human brains have evolved to recognize patterns but the Weimar republic is so far from today's reality that I can't believe you would even bring it up. It was post world war 2 Germany, huge reparations were levied everything was bombed out and no one could make anything, so the government just kept printing money. No one could measure anything so they didn't understand where to inflict the pain and it got away from them.

This is not post war Germany. North Americans can make lots of things to sell and be taxed on. There are no reparations draining Canada and there are thousands of professionals who do their absolute best to use the tools currently available to them to keep the whole thing going within acceptable parameters.

On top of that, the current situation is Global. If there isn't hyper inflation across Europe, we have a ways to go yet.

If Canada goes to $0.10, you win. But we still have $0.18 to go before we are even where we were in 2001. And life was pretty awesome in 2001. I don't remember any tanks in the streets or anything!

SJ said...

I didn't say rates would go up much in 5yrs, nan (2%), but here's a fascinating look at historical interest rates.
http://hurstcycles.com/wp-content/uploads/2015/01/Interest-Rates-1790-to-present.png

My guess is it's kinda like ~1954... ~34 yrs after the previous inflationary peak (1981). Sure there will be more dives along the way, but I believe we're slooooowly transitioning to economic sunshine & rainbows, thus rates in a slow upward direction for ~25 yrs give or take. Look how much better Vic is doing lately - tech, tourism, film industries are booming. I can assure you we wouldn't be building office towers without demand (long-term leases signed). And no way, no how will US/Can allow Japan-like rate stagnation and comatose economy for 20 years. That should be obvious with our immigration policies alone. Usually it's the doom-sayer majority who end up being OTL, but I suppose they could be right once a millenium. We’ll see ;)

nan said...

Sorry- Weimar was post ww1- typo

Just Jack said...

Getting your wars mixed up when it comes to carpet bombing German cities.

WWI had Bi-planes and Zeppelins. WWII had flying fortresses and B-52 bombers.

Wars are about money. The more money you have or you can finance the more likely you're to win. When the USA entered WWI, the Germans lost access to credit as the odds went against them. The financiers chose who would eventually win not democracy and freedom.

nan said...

Well Japan has 100mm people and they couldn't stop stagnation. Canada has only 1/3 as many people...sure- canada has much less insular immigration policies but it was debt and old people that kept rates low Japan- we also have those here!

CS said...

Leo M:

I think LeoM spells it out well exactly what the risk is to the US dollar from not only surplus reserves parked with the Fed but with US dollars held as reserves by China, Japan, et al.

By attempting to goad the EU into war with Russia while at the same time "pivoting to Asia", i.e., moving aggressively to contain China militarily, the US has prompted retaliatory measured by Russia and China aimed at undermining the dollar.

These measures are likely already having a significant effect, albeit this effect is currently masked by hot money flows as the Euro is being devalued. Russia:China trade in local currencies is booming and the other BRICs nations are entering into similar arrangements. This means not only a winding down of dollar reserves held by foreign central banks but also a reduction in what is probably a far larger quantity of dollars held by businesses that until now traded internationally only in US dollars, but which now have the option of using local currencies.

As Leo M points out, the chief means the US has to discourage dollar dumping is to raise interest rates and they may have to raise them a long way to persuade current holders to continue holding the many trillions that may otherwise be more usefully converted to renmimbi, rubles, etc. Alternatively, the US could cut spending, to eliminate the need for further money printing and even to pay down some debt. But with potentially tens of trillions of surplus dollars to soak up, austerity alone is unlikely to stem the deluge if it begins.

Massive dollar dumping will mean massive inflation, which reminds one that it was only 34 years ago that the Volcker Fed raised the Fed funds rate to 20% to kill inflation then running at just over 10%.

SJ said...

The key is net migration rates:

2014
Canada (& Australia) 5.7
US 2.5
Japan 0.0

For fun, Norway is 8.0

Now look at the price lines of Canada, Japan, US and Norway.

http://i.huffpost.com/gen/2303732/thumbs/o-BMO-HOUSE-PRICE-INDICES-570.jpg?11

Does Norway have a housing bubble? I think not.

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

The financiers chose who would eventually win

Well that's one point of view. In fact though, relative to the allies, even before Russia came in, Germany was vastly outmatched in GDP. In fact, Germany's entry into the war seems to have been largely opportunistic and the result of Western manipulation. Britain paved the way for Germany's takeover of the Sudetenland.

The Sudetenland was Czechoslovakia's chief bulwark against German invasion with a chain of fortresses along the Czech-German border.

Once the Sudentenland was incorporated into Germany, the way to the Polish border lay open, an opportunity that Hitler promptly seized. As a consequence, Germany gained control of Czechoslovakia's advanced arms industry and stores of weapons including many tanks that were larger and more advanced than any possessed by the Nazis.

After that, Britian incited Polish obduracy over Danzig, which prompted Hitler to take his next fateful step. Britain did nothing to save their Polish ally, other than drop leaflets over the Black Forest. When a member of Parliament asked Sir Kingsley Wood, UK Secretary of State for War, why Britain did not at least bomb German arms depots, the Minister Replied that that would mean destroying private property.

With that, success seems to have gone to AH's head, hence the lunatic mid-winter March on Moscow and inevitable disaster.

CS said...

today the Russians and Chinese are mob bosses and gangsters. How likely is it they they would fall on their own sword just to take down the US economy?

To Russia, the US is an existential threat. It is imperial policy to break-up the Russian Federation.

In any case, the Russian Central bank has already dumped most of their US dollars, and the Russian government has neglibible dollar-denominated government debts. Instead of US dollars, Russia's central bank is filling its vault with virtually the entire output of Russia's gold mining industry (Russia is the world's third largest gold producer, ahead of the USA at No. 4).

CS said...

correction:

when I said that on the eve of WWII "Germany was vastly outmatched in GDP" (by the allies) even before Russia came in," I meant, obviously, before the USA came in.

In 1938 France, Britain and the USSR had a combined GDP estimated at 66 billion current US dollars, versus $46 billion for Germany. The US GDP at the time was $85 billion. In addition, the British and French had large imperial possessions and former colonies that entered the war automatically on the allied side (e.g., Canada, Australia and India).

SJ said...

Tsunami warning for Vic.

Anticipating retirement and motivated by the U.S. real-estate crash, he and his wife embarked on an intensive search for homes in Phoenix and Palm Springs, “but Victoria won that competition hands down. We could not replace what we found here anywhere else.”
Lynne added: “This is a city of little villages, and that is very attractive to us. We just marvel that we don’t have to get in a car to go to a restaurant, the hardware store, an art gallery or the beach. We can even walk downtown.”
Vanc Sun

Boomer tsunami that is.

Leo S said...

The article is just a full length ad for abstract disguised as an article. Bought and paid for

totoro victoria said...

I find the building extremely unattractive from the outside (beige brick??). It is difficult to believe the top floor condos will sell for 1.3 million.

But maybe I'm just not the right demographic.

Just Jack said...

correction

I was only speaking of the Great War between the monarchies of Europe that lasted for some empires into the 1920's.


WWII was bank rolled by industrialists.

SJ said...

Even Langford's trying to roll out the boomer welcome mat, but I don't think seniors are into bowling and bar fights.

Given the popularity of Vancouver Island as a retirement spot, it’s especially important for municipalities here to be prepared for the inevitable wave of retiring baby boomers. To be senior-friendly, a community must be walkable and livable, with easy access to stores, services, recreation and health care. Langford has made a start, but it isn’t there yet. It has the amenities, including the big-box stores, but they are spread out and not conducive to pedestrian traffic.

http://www.timescolonist.com/opinion/editorials/editorial-langford-s-plan-to-attract-seniors-1.1006287

SJ said...

I agree, that is an ugly building on Foul Bay.

Just Jack said...

I find myself agreeing with Totoro on this one. An unattractive building that seems to have taken most of its inspiration from the children's game MineCraft.

This Calgary couple have given numerous testimonials in various publications to the point now that I question their motive.

I'd wait for the re-sales in this complex to happen. Then you'll be buying the steak and not the sizzle.

n.y.k. said...

How many years of the "waves of boomers" not moving here will it take before that meme dies?

With something like 9 million boomers out there it should be obvious by now that the hundreds of thousands or millions of retirees that were predicted to migrate to Victoria didn't do it.

They're probably going to stay near their grandkids and all their lifelong friends in the community where they've already spent their entire lives. You know, just like their parents did.

SJ said...

The peak birth year was 1959, which would equal 56 years old now. So I expect the peak Victoria demand for the "wave of boomers" around ~2035, when they are into their 70s and wish to no longer tolerate extreme climates of say Calg & TO. I believe it's just starting as the leading edge boomers turn 70 this year. In other words, ~20 years of increasing awesomeness to sell the rich old coots what they desire ;)

http://www.timescolonist.com/opinion/op-ed/comment-baby-boomer-tidal-wave-is-not-yet-upon-us-1.1733942

jwalbren said...

Wow, a literal flood of houses are coming on the market now at great prices.

Low interest rates

Lots of selection

Lots of interest in buying

= Massive 12% bump in prices this season.

jwalbren said...

We have put in a couple offers already on a couple decent looking places that have come online in the last week, its looking like for the short term we might get into a great place at an 'ok' price before they go up.

Leo S said...

Lots of selection

Lots of interest in buying


Only one of those two indicate rising prices could be coming.

Death said...

I agree there's tons of stuff coming on the market which means prices are sure to rise. Just look at oil production same thing.

Introvert said...

VanCity is offering a 5-year fixed mortgage at 2.89%.

Coast Capital has a "featured" 5-year fixed rate of 2.79%.

That, my friends, is some cheap, cheap money. This could be a big spring for the Victoria real estate market and for sellers in particular.

Justrenter said...

"we’re a lot closer to a cross-country freeze than anybody is ready to admit."

http://www.macleans.ca/economy/realestateeconomy/canadas-housing-market-and-then-there-were-two/

Marko said...

2.79%? Even that sounds high to me, have never paid more than 2.45% for a mortgage and that was before the 0.15% drop :)

Variable has been good thus far.

Leo S said...

Variable has historically been the cheapest option in most cases.

SJ said...

My 5yr variable is 2.35% since that latest -0.15% move.

Capital Park got approved. Another 235,000 ft of office space.
Developer Robert Jawl said the companies are working on a tight schedule to deliver the first phase of office space to the province by spring 2017.

http://www.timescolonist.com/news/local/victoria-approves-capital-park-project-near-legislature-1.1792736

SJ said...

If Maclean's finally writes a sunshine & rainbows story about housing, that's when I'll get worried about a big correction.

Introvert said...

The 5-year fixed rate mortgage is the Ron Popeil of mortgages, which is why I like it: "set it, and forget it!"

dasmo said...

I've gone fixed but couldn't help it when it's at 2.99%. Still a mistake. Variable next time. Unless a 1.99% fixed is offered. Then I don't think I can help myself....

Just Jack said...

I'm seeing an increase in net listings, in the core districts. Condominiums are showing a net increase of 77 units or about an 8% increase in new listings in the last two weeks.

The increase is a little less for houses in the core with a net increase of 28 homes for sale or roughly 6%.

These percentages can easily be over stated by a few percentage points because of the lag in reporting sales. Yet they do show a positive increase in net listings.

In the Western communities there is a net increase of 73 homes or 7% in the last two weeks as well.

We are a little higher than this time last year for new listings but I wouldn't consider this increase as being abnormal for the time of the year.

If you want to see what's abnormal look at the increase in listings for Calgary. From what I've read I would call that a supply-driven downturn. A bit surprised that no economist has yet called it what it is... a burst bubble.

Marko said...

The biggest issue I have with a 5-year fixed is just that, it is only 5-years. You have very little protection from interest rate risk.

Let's say hypothetically the best 5 year variable currently available is 2.20 and the best 5 year fixed is 2.79 - a 0.59 spread.

First of all, given that rates just dropped it is fairly safe to assume that most likely nothing will happen in the next 6 months. After that we are down to 4.5 years left on the 5 year fixed. Most likely in the next two years we won't see the BOC increase rates by more than 0.59. Maybe 0.50, but 0.75 or more, I don't know?

And if in the long run, 4 years from BOC has increased 2.0 (highly unlikey) your variable is 4.20% but you are screwed with the fixed anyway as you just have a year left.

Marko said...

Another good reason to buy a house within your means...you can go with variable and not worry about the payments.

dasmo said...

Variable has proven better over the last ten years...next time....

koozdra said...

Are Canadians dangerously in debt thanks to expensive housing and cheap credit?

DavidL said...

Over the past 13 years, I've always had a variable rate mortgage and it has always been lower than the lowest fixed rate. Currently, it's at 2.25%... Back in 2009, it was as low as 1.45%. In eleven weeks, I'll be mortgage free.

Compaddicts Infotech said...

Is this how we'll return to "normal" interest rates?
Buy property in kamloops

Marko said...

Looks like we might clear 700 for the month.

Monday, March 16 2015 8:20am

MTD March
2015 2014
Net Unconditional Sales: 307 575
New Listings: 707 1,286
Active Listings: 3,633 4,050

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

jwalbren said...

Listings have slowed a ton, but purchases are super strong. I think the 'spring push' is already over and you will see very strong demand for not that many places coming on market soon.

The main reason people are not 'cross buying' is the land transfer tax and Realtor fee's. It just stops the market liquidity.

Selling an object should not have a $45,000+ cost associated with just a few pieces of paperwork.

With the ridiculous taxes and high costs of Realtors shutting down a vast majority of house sellers, combined with crazy low interest rates and very high rents (try to find a place to rent in Victoria that is not in a bad area or toxic / unmaintained for less then $2500.

The only options are to buy for young people if they can, it costs less then renting and you have a slight chance of making it and maybe raising a family.

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

Wow, 3 places we went to look at today all had offers on them by the time we saw them.

Leo S said...

Anyone know what happened to 347032 4128 Longview Dr? The for sale sign is still there, but can't find it on MLS.

Just Jack said...

Yup, it's got an offer.

Is it possible to have a home professionally renovated without permits?

Would it not be completely unprofessional not to get permits if you're a contractor.

Or is the average buyer in Victoria so gullible that they believe anything an agent will write.

Marko said...

Anyone know what happened to 347032 4128 Longview Dr? The for sale sign is still there, but can't find it on MLS.

Sold for $721,000. Purchased for $550,000 in 2011.

Marko said...

I've had two listings in the last month where the first offer collapsed and the sellers ended up selling on the second offer in excess of the collapsed first offer price. Have only had that happen twice in the last 4.5 years!

Listings are increasing but not so much in the places where the demand is. For example, today 43 listings but only 14 in the core (11 in Colwood/Langford alone), out of the 14 in the core only 5 single family homes, only 3 below a million one of those being $995,000 on Robertson.

totoro victoria said...

All this chitter chatter about core RE activity has me considering listing ...

Then I think about staging and the effort it takes to list and show and the disturbance to tenants and I think maybe next year.

jwalbren said...

Yes, when I'm talking about the market, I'm talking about 'Victoria'... I don't know why Langhole and Crawlford are even bundled into the core, those are wildly different markets.

First to crash will definitely be those $459k box houses in Langhole.

Marko said...

Poor grammar on my part. Langford and Colwood are not part of the core. I was just trying to get across that just in Langford/Colwood almost as many listings were listed yesterday (11) as the entire core (14) which includes View Royal.

SJ said...

Hard to believe these condos are going over ask.

615-845 Dunsmuir... ask 735k, sold 751k, 130k over assess, 8 yrs old, 1400 sq ft
802-75 Songhees... ask 725k, sold 750k, 20 yr old, 1400 sq ft

3/4 of a Mill to have float planes roar past your window every 10 min.

SJ said...

Doesn't look like the maritimes will give us much competition for boomer retirees over the next decade. Charlottetown & St John,NB for instance already setting new snowfall and broken pipe records... ~500cm of snow! That would even make Duncan look like paradise ;)

Introvert said...

Anyone know what happened to 347032 4128 Longview Dr? The for sale sign is still there, but can't find it on MLS.

Sold for $721,000. Purchased for $550,000 in 2011.


$171,000 (31%) increase in just 4 years. Yummy.

Introvert said...

I don't know why Langhole and Crawlford are even bundled into the core, those are wildly different markets.

Langhole and Crawlford. That's really good.

Introvert said...

Just looked at the photos of the Longview house, which I have walked past many times in my travels: it's a pretty unremarkable property and, like most places in Gordon Head, updates are needed.

Gordon Head is just a good location. The lots here will always be worth something.

dasmo said...

It's in demand with the young family market that's for sure.

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

When deals start collapsing it would be interesting to find out why.

Was it do to financing or a building inspection?

As an appraiser, we are under a lot of pressure by the lender, broker, listing and selling agent to "hit" the sale price. And if we don't then the appraiser is inundated with call backs demanding more information and analysis that the appraiser is not being paid to complete. A way used by appraisal management companies, that generally receive a third of the appraisal fee, to whip the appraiser into compliance.

Since so many paychecks are conditional on the sale going through, the loan is more important than the market value when prices are rising. The people may be overpaying a bit but the market is rising and covering any mistakes. Generally "mortgage appraisers" are accommodating to their masters. After all when a mortgage appraiser is paid less than an East Van hooker it's volume where they make their money not quality.

That leads me to believe that having some of your deals collapse sounds more like a change in banking regulations which would be a risk management issue originating from the lender's head office.

Leo S said...

$171,000 (31%) increase in just 4 years. Yummy.

Actually it was renovated completely. The old listing for it advertised it as completely original condition with an unfinished basement. The new listing advertised as "executive" this and stone counter that. Hence the increase in price.

Leo S said...

Unless they did it themselves they probably spent over the $170k gain in renos. The outside still looks boring though.

Introvert said...

Is there a way to see the "new" listing, after the renos?

SJ said...

This link shows you the "new" pictures.

http://chrisandjohn.ca/mylistings.html/details-45956653

Introvert said...

Thanks, SJ. Leo, you're right (as you always are): they did spend some money, especially on the inside.

vicre said...

testing

vicre said...

I have over 500k in cash, should I wait to buy?I was thinking about playing telus stock 10 000 shares instead. Do you guys think house prices will rise or stay about where they are after the spring rush. I am looking Saanich East anything before Mackenzie 5 km radius to town. Thanks for your reply.

dasmo said...

Definitely put all of your money into a single asset....

vicre said...

I dont think prices will rise in the core untill the Westshore inventory gets eaten up. The core buyers might just be the last to get in before everything drops. Maybe the few in the Westshore that are able to sell are borrowing a little more and buying in the core where they always longed for.

jwalbren said...

Yeah.... inventory in Langford must get all used up before the core moves... lol

So many people moving here right now from everywhere, we have been discovered...

Biggest expected tourist season 'ever' is happening right now.

Best 'future proof' economy is here.

Gordon head is now an investment for foreign buyers... I know of 4 houses that are over a million in Gordon Head that are just empty and used as cash storage.

here is a tip, go on google maps and look for houses with pools that are not looked after, those are the cash sitting mainlanders.

dasmo said...

Buying a house and letting it rot is a poor choice of a cash store. Sounds more like a drain...

Marko said...

I have over 500k in cash, should I wait to buy?I was thinking about playing telus stock 10 000 shares instead.

Personally I would take 120k cash, buy a 600k home with a suite. Take out a 480k variable very low 2s mortgage, rent out the suite. Take 380k and invest it, but I don't know if I would go all into one dividend company. I would spread it out a bit.

Just Jack said...

I don't think anyone or anyplace keeps statistics on people selling in the Western Communities and moving into the City.

I can't recall anyone that I've spoken to lately that has moved into the City from the Westshore. However, I have met many retirees who left the city and moved to the Western Communities because they could get a new or newish home and bank some cash.

I would think it would be near impossible to get your wife to move from a newer home with lots of space into a much smaller 1950's home in the city. I don't know of many women who would want to trade down.

I suspect many of the marginal city homes (and there are a lot of them) are bought by first time buyers, investors, those selling their condo or someone recently divorced that already lives in the city. I don't think it's people moving from the country into the city in any significant numbers.

If you don't have to work downtown, the Western Communities is a very nice place to live and raise a family. Everything is new or near new such as the houses, schools, parks shopping centers and recreation facilities. And it's a lot easier to get around than living in the City. There are no rush hours past View Royal.

But I suppose until there is irrefutable proof there will always be those living in the city who think perpetrating a myth that everyone wants to live where they live will continue. Which just sounds more like insecurity than fact.

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

The rumors have been that the Vancouver market is dominated by foreign purchasers buying well located houses and high end condos as a form of wealth preservation. Keeping these properties vacant and mortgage free. Creating a reserve currency backed by real estate rather than hoarding US greenbacks.

The buzz of our petro dollar collapsing will not instill foreign ownership confidence in Canadian real estate. If you've been holding Canadian property you'll have experienced a substantial loss in value relative to the USA.

If you're an investor parking cash in real estate it isn't about getting a cheaper price it's all about stability. The falling dollar may likely scare off foreign investment in Canadian real estate. Far better to stash the cash in Seattle Condos than Vancouver skyboxes these days.

At the other end of spectrum is low interest rates which made it possible for those building the condos to buy into the market. In this way the government socialized housing making it possible for everyone that wanted one to at least buy a condo.

And that's why I believe the number of condos grew faster than the population. The politicians socialized and commoditized the condo market in order to keep the economy out of a recession such as the USA experienced.

The first several floors being sold to the workers in the financial, insurance and real estate industries. Whose jobs were created because of the construction. With the top two floor sold at exorbitant prices to people in foreign countries sometimes using straw buyers.

dasmo said...

My guess is JJ lives in the western communities...

vicre said...

JJ I don't think people prefer WComm. Its just an excuse they use that its all new when in actual fact they just cant afford the city. Langford always has rapes, drug dealers, murders, cars on lawns, Langford girls(reputation), pitbull attacks, etc. Victoria has historic buildings, beauty, nice boulevards, 3 fashion based malls, shops clubs restaurants...

Curly Fry said...

fashion-based malls >>> Langford girls(reputation)

hah. I'm from out of town/country & the way people talk about langford cracks me up!

#people-on-the-island-need-to-get-out-more

#inner-city-victoria

#there's-a-reason-langford-costs-more-than-detroit

Just Jack said...

All you need is 5% down and you can live in Victoria or in Langford.

The size of the down payment isn't a barrier to where you can live.

As it is now some 33,000 people live in Langford and Colwood compared to 80,000 in Victoria City.

It's simply an untruth to say everyone wants to live in the city.

"Oak Bay woman fends off attack with gardening tool" -
-Times colonist 2015/03/02

Introvert said...

My guess is JJ lives in the western communities...

Pretty sure JJ rents in Oak Bay--the same hood he's always slamming. But he could have moved, I suppose.

JJ I don't think people prefer WComm. Its just an excuse they use that its all new when in actual fact they just cant afford the city.

It's true. Just as most people in Abbotsford would prefer to live in Kerrisdale.

Just Jack said...

There have been MORE house sales in Langford and Colwood this year that in Victoria City. 119 to 67 or almost twice as many purchases are occurring in the Westshore than Victoria City.

One of several reasons why Victoria prices haven't started to decline is that there isn't very many listings. It isn't stronger demand for housing in the city it's a supply problem for detached houses.

Unlike demand, supply can change extremely quickly. Calgary and Fort Mac are just two examples where a lot of the investors inventory has been dumped on the market. It could happen that as the Albertans feel the economic pinch in the next several months they'll start to dump their rental and vacation homes.

Numbers Hack said...

Western Communities vs. Saanich Tillicum/Gorge

Recently looking at diversifying into rental properties. Here is what was we were able to find:

1/ WC
- new/newish SFH 350K to 450K
- rent upstairs $1000 - $1500
- rent downstairs $800 - $1000
- repairs 5 yrs = negligible
- asset appreciation 1%/YoY

2/ Saanich Tillicum Gorge
- 1930s to 1950s SFH 350K to 450K
- usually smaller home
- rent upstairs $1000 to $1300
- rent downstairs $700 to $1000
- repairs/upgrade 5 yrs = $20K to $35K
- asset appreciation 1.5%/YoY

Don't know where it would be easier to rent out, but essentially if you crack the numbers, WC is a better choice to invest.

BTW, for people who have lived in a new home with all the bells and whistles; and to move to a "character home"...please share your experiences.

Character homes are nice to look @, but heated floors, efficient lighting, layout, etc.. in newer homes...that is way worth a commute if you can't afford the $1MM price tag for a newer home in the core.

Numbers Hack said...

Closing the downtown–suburban divide

Published Feb. 20, 2014 by Cherise Burda


Advancing a good idea sometimes requires getting rid of a bad one. It’s high time that we stopped thinking of downtown and the suburbs as enemies. In reality, they have more in common than ever before.

I grew up in the 905 (a suburban area ouside Toronto) but moved into the city 20 years ago because I wanted to inhabit a smaller footprint and avoid commuting by car. However, if I were to return to Markham today, that same lifestyle would be available to me. It’s possible to live in a condo or townhouse, walk to plenty of businesses and amenities, and zoom around on new rapid busways that are separated from traffic.

Walkability, vibrant streets and rapid transit are no longer exclusive to downtown Toronto. A growing number of suburbs, from North York to Mississauga, are now becoming complete communities rather than the starting points of a commute.

A study from the Pembina Institute and the Royal Bank of Canada found that more than 80 per cent of residents would trade a big house in a car-dependent suburb for walkability, a shorter commute and access to rapid transit — even if that means living a smaller, non-detached home. And nearly half of those homebuyers would prefer a suburban neighbourhood with these “location-efficient” attributes.

However, across the Greater Toronto Area, the deck is currently stacked against building family-friendly townhouses or mid-rise buildings close to rapid transit. It’s currently profitable for developers to build detached houses in distant, car-dependent greenfields or 40-storey condos downtown, but little in between. As a result, those are the only affordable options for the average homebuyer.

Along with investing in a rapid transit network for our region, we need to change the municipal zoning bylaws and provincial rules that are inhibiting the shift to location-efficient development.

It’s time to move beyond the urban–suburban divide and realize that we share many of the same goals for our communities. But this big idea requires thoughtful leadership that builds cohesion rather than manufacturing conflict.

nan said...

@ Numbers hack:

I would generally defer to an analysis like this to determine whether a house price is worth the cost of a commute...

http://www.mrmoneymustache.com/2011/10/06/the-true-cost-of-commuting/

Chances are for most people the commute actually isn't worth it but you can't brag about a commute as easily as you can about a new bathroom on facebook sooooo....

totoro victoria said...

Absolutely agree nan. $4,800 a year to commute from Langford to Victoria is a big cost. You can pay $80,000 of extra mortgage with this - and have an appreciating asset.

If two of you are doing this, well I have no idea why you would not put that $160,000 of additional mortgage you could be paying for into a central house you can walk or bike to work from.

And that 80 minutes a day of your time? That adds up to 333 hours - or 22 days (assuming a waking day is 15 hours - longer if you use working hours) of your life each year spent sitting in traffic.

Butter09 said...

What did 824 Darwin go for? It seems like any SFH that is in good shape and listed under 500k will sell within a week. Is this normal for this market?

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

Everyone commutes - not just by car.

To get downtown from Hillside Mall by bus, bike or foot is still a half an hour.

Ironically, I know people that are living within 3 kilometers of their downtown job - and still drive to work.

There is a price to pay for commuting. And the cost of money is a factor. When money is cheap, like it is now, the lump sum price difference between areas gets larger. It also contracts when money gets more expensive.

Yet that doesn't explain why you see crazy price differences between hoods in the core.

A lot in Oaklands might be $350,000 but less than a kilometer away the underlying land value can be $600,000 just for being on the other side of Oak Bay Avenue. That certainly isn't related to commuting times downtown.

We don't need rapid transit in Greater Victoria - what we really need is better roads and over passes. Instead you get Victoria City council bent on making commuting from the outer areas more difficult.

Roads are the arteries and veins of a city. Clog them by narrowing their passage ways and the heart of the city dies.

Over tax the residents of a city and they move their businesses and their families. Which is happening in Victoria today.

vicre said...

A Kenmore listing just came on at 525k, thats about what it would have sold in 2007. I saw a house in 2006 listed at 500k in GH that sold in one day(not as nice). No increase in prices in 8 years. I had an agent tell me in 2007 that prices will double in ten years. A guy I know that bought in 2007 just sold for almost the same price one week ago even with rates 50% lower.

SJ said...

I don't believe anyone would choose to live in Wcomm if prices were the same.
Go drive or bike from Empress to Ogden to Beacon Hill, Craigdarroch castle, OB Village, Vic golf club, Uplands, UVic. Vic is in the Zurich/Vienna league. It all comes down to price. People talk themselves into their circumstances, but deep down I don't think anyone would choose Wcomm if they didn't have to. Among the hundreds of reasons Vic is more expensive, it's factually much sunnier in Vic too ;)

totoro victoria said...

Lots of people do not commute. I don't unless you call walking 10 feet inside my house a commute.

It does not take 30 minutes from hillside to downtown by bike. And even halving your commute time and cost is significant.

Being located next to downtown does not dictate home values. A number of factors come into play including walk ability, natural beauty, distance to amenities, neighborhood curb appeal, and availability.

And there are some nice spots in the western communities. People who work from home and like rural living could have a nice lifestyle at a more affordable price with no commute downside.

vicre said...

The Western Comm. are to Victoria what Surrey/Abbotsford is to Vancouver.

The best value and central hub location in Victoria is probably Maplewood/Cedar Hill area.

Just Jack said...

Sunshine is a bit of a red herring issue. It doesn't stand up to logic or economics.

If sunshine was a significant factor then there should also be a significant difference in house values between a north-south lot relative to an east-west lot in the same neighborhoods. The north-south lot receiving a lot more sunshine during the day.

This seems to be a factor perpetuated by those who believe Vampires and Zombies really exist.

Just Jack said...

Personally, I like Maplewood.

If you have to live within an 8 kilometer radius of Victoria City Hall, parts of this hood give you the feeling of the country with the amenities of the City.

The streets are not bumper to bumper with parked cars. And, in general, home owners don't have to whore their life styles out by having strangers in their basements.

SJ said...

The closer you are to the sunshine symbol, the less rain you get.

http://www.olympicrainshadow.com/images/satellite.jpg

One of the numerous reasons Oak Bay has the highest ave prices on Vanc Island and the least vampires ;)

Just Jack said...

People like to cluster together with others of the same social economic group. Prices are high in some areas relative to other areas simply because they have historically been that way.

You buy into Oak Bay, because you're a dentist and dentists are suppose to live in Oak Bay. And if you're not of that social economic class you buy into those hoods in the hope of being perceived as an equal. But you're not - they still laugh behind your back at the house parties you're not invited to.

As seen in most of the comments it simply comes down to arrogance. In general Canadians and Victorians have a lot of arrogance which probably stems from a historical sense of insecurity.

Living next door to the most powerful country in the world and being left adrift on an island in the western outpost of Canadian society has its affect. Victorians always compare themselves to other larger cities like Vancouver and Toronto.

This is just arrogance for a city of 80,000 people. And there is your reason why prices are higher in some areas over others. It's not commuting time, it's not sunshine. It's a way of showing the world how we all can be pompous asses.

Just Jack said...

When it comes to sunshine, the only measurement that counts in house prices is the amount you get when you bend over.

Just Jack said...

The core districts of Victoria, Vic West, Oak Bay, View Royal, Saanich East and Saanich West have all seen an increase in the number of listings over the last 45 days in relation to the same time period as last year.

But not equally.

Victoria and Oak Bay have seen the greatest percentage increase of 25 and 20 percent respectively. And the increase is accelerating having risen to 48 and 40 percent in the last two weeks.

In the light of falling oil prices it seems likely that these areas would see the greatest increase in listings as they were likely the most heavily purchased by Albertans. The people in the oil patch are likely getting nervous and are listing their rental and vacation properties in Victoria and Oak Bay.

At this point, there is no panic of falling prices as the drop in low interest rates has stimulated demand and that increase has offset the increase in supply and kept prices stable. But I suspect, the effect of such a small drop in the interest rate is not sustainable. Probably the largest buyers that were able to buy under this low rate have now bought.

Did someone just hear a shoe drop?

dasmo said...

There is not a significant percentage of Alberta owned vacation property in Vic or Iak bay to even entertain that as being a threat. Not while prices are still so high where vacation property actually is...

Introvert said...

And, in general, home owners don't have to whore their life styles out by having strangers in their basements.

An example of the seething resentment that comes from being priced out of the market. Or not buying earlier, when prices were more reasonable. Or not having a higher paying job.

totoro victoria said...

Personally I think any spike in listings is directly attributable to the chitter chatter on HHV the past few weeks.

vicre said...

Albertans who want to stay in alberta may have to consolidate sell off some of their holdings elsewhere such as Victoria rental props and condos. Sometimes when one sector gets hard hit on the tsx all stocks come down as margin calls are made. Albertans who are cash strapped or forsee being strapped will make some hard decisions early on, that would be a prudent course of action.

SJ said...

Benchmark price of oil up 5+% today...I think the Albertans will be ok. The ones who do get laid off from building Ft Mac refineries can easily move to Victoria to build the 600,000 sq ft of office towers that are about to come out of the ground.

totoro victoria said...

I was willing to wait for a SW backyard. Pretty sure there is a small premium for this. Always mentioned in the listings when the back yard faces south.

vicre said...

The Jawls are building the office buildings by City Hall and Parliament Build. They are an old lumber family that first arrived in 1930 from India and they have very very deep pockets. Once they are built they will pull tenants and business away from other commercial office buildings which will then suffer. The Jawls own just about every gov office building in Victoria. They are able to build cheap because of their lumber and building supply business.

Just Jack said...

You would think if north south lots were so important, then Oak Bay would have been designed to have most of them orientated that way.

However the majority of lots in Oak Bay are East-West.

In contrast the less expensive hoods such as Central Park have the north south lots.

SJ said...

Here's some help for those not yet understanding how Vic house prices work. It's actually a reeeally simple pattern to get the hang of going all the way back to 1960.

http://i.cubeupload.com/hjT9tw.png

I drew a black line to help you see the pattern a bit easier.

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