tag:blogger.com,1999:blog-7123542260692860177.post4007100537759594993..comments2023-12-02T00:38:46.467-08:00Comments on House Hunt Victoria: Is the market about to become ugly?HouseHuntVictoriahttp://www.blogger.com/profile/07456914359088891317noreply@blogger.comBlogger44125tag:blogger.com,1999:blog-7123542260692860177.post-89961402720606637182008-05-13T02:55:00.000-07:002008-05-13T02:55:00.000-07:00I really hoped that the real estate market will re...I really hoped that the real estate market will rebound at the beginning of the spring like every year. But working as a <A HREF="http://jaybanks.ca/vancouver-real-estate/" REL="nofollow">Vancouver realtor</A><BR/>I have recorded even higher decline than during past three months. Even lowering of overnight rates by Bank of Canada did not change bad expectations and Banks and brokers are staying reluctant to change their interest rates. It looks like all the numbers are in contradiction to my business results.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-66651696978095677492008-04-28T20:56:00.000-07:002008-04-28T20:56:00.000-07:00We get to rent the above for less than $2000 a mon...We get to rent the above for less than $2000 a month which, in my view, is pretty good for the convenient location -- close to work, schools, and groceries. Even if it still takes forever to get downtown because all the old people drive 30km/h in the 40km/h zones.<BR/><BR/>And the 2200 sq/ft of space is nice. <BR/><BR/>Unfortunately, the fuel I save getting to work is going straight into heating those 2200 sq/ft... and straight out the walls, doors, and windows. <BR/><BR/>I am pretty sure that I am personally responsible for localized global warming in parts of Oak Bay.... just ask the RATS (technically I think they are called <A HREF="http://www.pestvictoria.com/rats-and-mice/rats.htm" REL="nofollow">Roof Rats</A>).<BR/><BR/>Besides all the above "negativity" here is a valuable tip you can take to the bank with you.<BR/><BR/>If you simply <B>ASK</B> your insurance agent if your proposed rental house has had any past insurance claims against it --- they will gladly tell you the claims history (this is great to know when you go to buy after the upcoming 40% + haircut). <BR/><BR/>It was news to the owner when I pointed out the effervescing concrete in the basement and the past owners insurance claims for water damage were probably connected (Duh). <BR/><BR/>My guess is that waiving that house inspection condition, because "it is Oak Bay", won't seem like it was worth it after they get the bill for digging up the entire foundation and installing new drain tile -- that's going to hurt.<BR/><BR/>Oh well, the bill for the plumbing, insulating, roofing, glazing, and RAT control is going to suck for them too.<BR/><BR/>Oh, and digging up that old oil tank and disposing it is going to be a real bummer.... I wonder if natural gas will be cheaper.<BR/><BR/>But HEY... "it is Oak Bay".<BR/><BR/>PS - my neighbor swears they are Norway Rats but I'm not so sure.Aaronhttps://www.blogger.com/profile/03507072299723016016noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-76353118920097511542008-04-28T20:55:00.000-07:002008-04-28T20:55:00.000-07:00Ah yes the old "but it is Oak Bay" motto. Actually...Ah yes the old <A HREF="http://www.bclocalnews.com/vancouver_island_south/oakbaynews/news/18144099.html" REL="nofollow">"but it is Oak Bay"</A> motto. <BR/><BR/>Actually that is EXACTLY what the new home owners (our current landlords) said to me when I question the price of Oak Bay property... "but it is Oak Bay" dear.<BR/><BR/>Let see what kind of "funky"house you get for that. <BR/><BR/>How about one that:<BR/><BR/>- is 80 years old!<BR/><BR/>- had it's last reno when "hunter green" counter tops were in vogue;<BR/><BR/>- enjoys "natural air exchange" and "no mold" due to <B>ZERO</B> insulation in the walls;<BR/><BR/>- make you kids ask "why can we here you and Mom talking in the living room when we are outside" (that is the "funky" single pane widows and 1/4" plywood doors dear);<BR/><BR/>- makes you remind your kids to "run the water before you brush your teeth" to get rid of the the rust in the pipes;<BR/><BR/>- makes you wonder when you hear that "scratching in the attic" at night. Only to have your neighbour tell you about the RATS in Oak Bay --- <B>NO I'M SERIOUS THERE ARE BIG ASS RATS IN OAK BAY!!</B><BR/><BR/>- makes you "damp proof" all your belonging in the basement including your washer and dryer (read on you'll find out why);<BR/><BR/>- and makes you wonder who refits knob and tube wiring with only a 100 amp service (the FORMER homeowners to save money of course). <BR/><BR/>All this for the low, low, low, price of just $740,000+ but HEY... "but it is Oak Bay" after all.Aaronhttps://www.blogger.com/profile/03507072299723016016noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-11026242012338860762008-04-28T17:37:00.000-07:002008-04-28T17:37:00.000-07:00Even when it does eventually make economic sense t...Even when it does eventually make economic sense to buy, credit may not be available for anyone except the very best risks. Perhaps 25 percent downpayments will be required. Or maybe the many will simply be to fearful to buy.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-33418140269763253552008-04-28T17:14:00.000-07:002008-04-28T17:14:00.000-07:00Like all things market based, I'd be surprised if ...Like all things market based, I'd be surprised if there wasn't at least a short period (up to a year or so) where renting <B>certain</B> properties, namely condos in less-desirable neighbourhoods, is actually cheaper than owning. <BR/><BR/>It was like that here for quite a while in the late 90s up to even 2001 where renting a two bed condo was more expensive than owning. No one wanted a leaky condo and the market was only going down slightly or sideways at best.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-61697272144696477172008-04-28T15:34:00.000-07:002008-04-28T15:34:00.000-07:00Here's what puts a limit on how far the Real Estat...Here's what puts a limit on how far the Real Estate market fall: As prices fall, so does the gap between renting costs and owning costs for those who must choose between renting or buying with a low downpayment. It starts to make sense for buyers to get back in the market when ownership is within closer reach from renting. That is, assuming banks are still willing to loan out money. If they aren't, prices can actually "undershoot." <BR/><BR/>Note however, that in the US, some markets are reporting that the emptying of houses facing foreclosure is placing upward pressure on rents.<BR/><BR/>How far can we fall? Using a standard mortgage calculator and an estimate of how much it would cost to buy the place I'm renting, I figure the market can drop over 40% before rental costs backstop a downward slide.awumhttps://www.blogger.com/profile/13542385891954965512noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-1118021174952842632008-04-28T12:12:00.000-07:002008-04-28T12:12:00.000-07:00From Shitting Pretty's article:“It’s more of an el...From Shitting Pretty's article:<BR/><BR/>“It’s more of an elitist or gentrified population and you’ll find an awful lot of interesting people with funky homes there,” he said.<BR/><BR/>Wow, that really makes me want to move to Oak Bay! Elitist neighbours? "Funky" homes? Sounds great!<BR/><BR/>Too bad there aren't any interesting people living in my lower caste neighbourhood...Tony Danzahttps://www.blogger.com/profile/11834617529220173312noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-52118441098039728952008-04-28T12:06:00.000-07:002008-04-28T12:06:00.000-07:00Anonymous April 24, 2008 8:06 PM If it's possible ...Anonymous April 24, 2008 8:06 PM <BR/><BR/>If it's possible for the market to overshoot on the way up (100% since 2000 whereas historically it takes 20 years according to you) why is it not in the "realm of possibility" for the market to overshoot on the way down? In fact people are much more likely to become irrational on the way down as often their financial lives depend on the sale of a house with steadily decreasing value. <BR/><BR/>Also when a landlord sells his house he has to sell it to someone so I don't see how this affects the rental pool as a whole. For every house that sells you need a buyer, that buyer needs someone to buy or rent their current home, this works itself all the way back to the first time buyer, it's zero sum. When you start running out of first time buyers and speculators, inventory starts building and that is what we're seeing now.Tony Danzahttps://www.blogger.com/profile/11834617529220173312noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-14359573506629812212008-04-28T11:44:00.000-07:002008-04-28T11:44:00.000-07:00There is some interesting news and comments about ...There is some interesting news and comments about the Silkwind & Radius condo projects over on <A HREF="http://www.vibrantvictoria.ca/forum/showthread.php?p=73487#post73487" REL="nofollow">Vibrant Victoria</A><BR/><BR/>Excerpt:<BR/><BR/><I>The increasing number of stalled large-scale projects in the region is becoming a case of the Emperor's new clothes. Everyone can see there is a problem, but no one is willing to speak of it, lest they be the one to expose the naked monarch</I><BR/><BR/>Then the blog admin follows this up with the usual RE pumper spin.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-26251147374884823022008-04-26T19:18:00.000-07:002008-04-26T19:18:00.000-07:00Canadian Mortgage Trends has an interesting post c...Canadian Mortgage Trends has an interesting post called <A HREF="http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2008/04/bond-yields-mar.html" REL="nofollow">Bond Yields March Higher</A>Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-19310635844235031752008-04-26T01:20:00.000-07:002008-04-26T01:20:00.000-07:00it's a very good sign when "it's different here" g...it's a very good sign when "it's different here" goes from "Victoria" to "Oak Bay" in both the MSM and Bull trolls on this blog. We've definitely turned a corner.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-17543604261012826052008-04-25T20:12:00.000-07:002008-04-25T20:12:00.000-07:00'...sitting pretty said... Getting ugly? My hubby ...'...sitting pretty said... <BR/>Getting ugly? My hubby says no way!<BR/><BR/>April 25, 2008 7:56 PM....'<BR/><BR/><BR/>You are so right. I'm glad you decided not to add to the panic by trying to sell your house now. Please hang onto your confidence, as it won't look nice if you join the capitulation process after being so defensive and loyal all along.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-32322996099376692442008-04-25T19:56:00.000-07:002008-04-25T19:56:00.000-07:00Getting ugly? My hubby says no way!Getting ugly? My hubby says <A HREF="http://www.bclocalnews.com/vancouver_island_south/oakbaynews/news/18144099.html" REL="nofollow">no way!</A>Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-65195106134424357412008-04-25T16:09:00.000-07:002008-04-25T16:09:00.000-07:00Oh ya , the realtor Venoit is glad to see an end t...Oh ya , the realtor Venoit is glad to see an end to bidding wars. hahaha<BR/>I bet all that extra money in commissions was just getting so frustrating!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-16446981023530404662008-04-25T15:57:00.000-07:002008-04-25T15:57:00.000-07:00It doesn't matter whether you are a bull or a bear...It doesn't matter whether you are a bull or a bear you have to admit there have been a lot of "cooling RE market articles" in the national MSM and by the CREA/BCREA.<BR/><BR/>Her is today's version in the Globe & Mail <A HREF="http://www.theglobeandmail.com/servlet/story/RTGAM.20080425.re-marketsurvey-0425/BNStory/RealEstate/home?cid=al_gam_mostemail" REL="nofollow">Some pockets still aglow as market cools</A><BR/><BR/>This one mainly fosuses on Toronto where the 1st qtr. weather excuses are no longer valid.<BR/><BR/>Some excerpts"<BR/><BR/><I>Across the Greater Toronto Area, the average price increased 4.5 per cent to $379,006 in the first quarter, compared with the same period last year, according to data from the Toronto Real Estate Board.</I><BR/><BR/><B>So the rear view mirror YOY is only 4.5% compared to last year. I don't think this will prompt a buying frenzy.</B> <BR/><BR/><I>The number of single-family homes that changed hands dipped to 17,521 in the first three months of 2008, compared with 20,463 transactions in the same period last year.</I> <BR/><BR/><B>Uh oh sales are dropping off YOY</B><BR/><BR/><I>Meanwhile, the chill that permeated the market in the opening months of 2008 appears to have continued into the spring: The GTA resale housing market saw 3,955 homes change hands in the first half of April, down 5 per cent from the same period last year, TREB reported.</I> <BR/><BR/><B>Must be the nice weather this month in Ontario</B><BR/><BR/><I>And across Canada, the resale market is "sound but cooling," says Cal Lindberg, president of the Ottawa-based Canadian Real Estate Association.</I> <BR/><BR/><B>Didn't the realtor association in the US (NRA) use the same spin before the slide down there?</B><BR/><BR/><I>Prices can't rise forever.<BR/>He recommends that sellers list their houses with the lowest asking price they would be willing to accept. "If we see more than that, it's a bonus."<BR/><BR/>Mr. Veinot says he's glad to see an end to the dizzying bidding wars of the past. "They couldn't keep going up the way they were — that was just out of control. One hundred thousand over asking — where is that coming from?" he says of some of the more extreme contests.<BR/><BR/>Still, he sees lots of prospective buyers out there who are eager to own real estate.<BR/><BR/>"It's a very interesting market for everybody because nobody can really put their finger on what is going on."</I><BR/><BR/><B>Bears can!! The party is over. </B>Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-44049170664394293362008-04-25T11:46:00.000-07:002008-04-25T11:46:00.000-07:00According to an investment letter I receive, the U...According to an investment letter I receive, the US will be lowering interest rates for the last time and the next move after that will be upward. The bond market tells the tale :<BR/><BR/>"Interest rates have been rising sharply the past few days and continued to do so overnight on growing expectations that the US monetary easing cycle is coming to an end. The market is now pricing in a 74% chance of a 25-basis point Fed Funds rate cut next week, and that is expected to be the last cut for the foreseeable future. The market, not one to wait and see, but always looking ahead, has pushed short-term rates higher, pretty much signaling to the Fed that it is has taken interest rates low enough. The key 2-year US Treasury Bond is now yielding 2.46%, well above the Fed Funds rate of 2.25%. The 2-year US bond yield touched a low of 1.33% on March 17th, so although 2.46% is low compared to where rates were a year ago (5.10%), the important thing is that rates have bottomed and are already rising ahead of the Fed. "Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-54986350811406421362008-04-25T10:49:00.000-07:002008-04-25T10:49:00.000-07:00Boomer said"In its latest assessment of the econom...<B>Boomer said</B><BR/><BR/><I>"In its latest assessment of the economy, the central bank warned that even if it continues to lower its benchmark rate, rates lenders charge on mortgages and loans may rise." <BR/><BR/>Which begs the question:<BR/>Who exactly are the lower administered rates supposed to benefit?</I><BR/><BR/>The BOC rate (3%)is a short term interest rate which the banks have historically used to set their prime rate. The differential is around 1.75% so bank prime is now 4.75%. Consumers with variable rate loans (mortgages, lines of credit) and businesses have loans at these rates and therefore benefit whenever there is a reduction by the BOC. The hope is that these lower rate loans will encourage businesses and individuals to spend more and stimulate the economy.<BR/><BR/>Longer term rates are not set by the BOC but by the financial markets. With the recent credit crisis there is a lot of caution so rates are high in order to offset risk. Even regular folks like me are cautious when they buy a GIC or corporate bond and so an attractive rate has to be offered in order to attract capital. Therefore the banks have been forced to keep their fixed, long term mortgage rates high due to their interest costs on capital they are borrowing. They are also charging more to cover their losses in ABCP.<BR/><BR/>What about credit card interest and the BOC rate? No linkage here at all. ABCP and other high rate instruments are used to finance credit card loans. The default rate on credit cards is rising. In March Target stores had to writeoff 8.1% of their outstanding loans due to default.<BR/><BR/>What does the future hold? The credit crisis is not over and if it gets worse due to collapse of monoline insurers, derivatives and other leveraged instruments rates greater than 90 days will rise from current levels.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-53275600358654402982008-04-25T08:37:00.000-07:002008-04-25T08:37:00.000-07:00Waiting for lower mortgage rates to bail out the R...Waiting for lower mortgage rates to bail out the RE market?<BR/><BR/>BOC says this.<BR/><BR/>"In its latest assessment of the economy, the central bank warned that even if it continues to lower its benchmark rate, rates lenders charge on mortgages and loans may rise." <BR/><BR/> Which begs the question:<BR/>Who exactly are the lower administered rates supposed to benefit? The banks?- by increasing their spreads, to help them through their self created ABCP messes?<BR/> At least in the USA there are some senior politicians objecting to the Wall (Bay) Street bailouts. <BR/>Here we get nothing but small minded political scandals.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-33206207638731859522008-04-24T22:41:00.000-07:002008-04-24T22:41:00.000-07:00Gas Prices - tourism? Not to mention the world fo...Gas Prices - tourism? Not to mention the world food prices. Here's a strange summary I heard today. That the new BioFuel companies are bidding more for the farm produced oil (eg corn) so now our food is competing against fuel.<BR/><BR/>Maybe we don't need crude oil afterall? <BR/><BR/>World demand for oil is DOWN currently; so why the price increases?? This doesn't represent supply/demand economics.<BR/><BR/>The mystery behind this is unknown to me.<BR/><BR/>Maybe a big bust in the fuel bubble? Who knows. Surely the fact that we can drive our cars on McDonald's french fry oil is a scary phenomenon to the crude oil industry and they are selling while they can.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-33995267673809106302008-04-24T22:26:00.000-07:002008-04-24T22:26:00.000-07:00Tourists will still flock here in droves. We are ...Tourists will still flock here in droves. <BR/><BR/>We are the best place on earth don't ya know? <BR/><BR/>The Olympics are coming. We are isolated here in Victoria from the US recession. Blahbitty blah blah blah. <BR/><BR/>Oh, and they will come for a visit but love it so much they will uproot themselves leaving family and friends and move here. Blahbitty blah blah blah.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-58315855805361563612008-04-24T21:20:00.001-07:002008-04-24T21:20:00.001-07:00Yes the foreigners must be leaving. Good riddance....Yes the foreigners must be leaving. Good riddance. Let them plough their money in Arizona or wherever they think RE is a bargain now.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-46999599049319379942008-04-24T21:20:00.000-07:002008-04-24T21:20:00.000-07:00Yes the foreigners must be leaving. Good riddance....Yes the foreigners must be leaving. Good riddance. Let them plough their money in Arizona or wherever they think RE is a bargain now.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-23447891773690212932008-04-24T21:08:00.000-07:002008-04-24T21:08:00.000-07:00As this link suggests:http://www.oftwominds.com/bl...As this link suggests:<BR/><BR/>http://www.oftwominds.com/blogapr08/RE-bottom4-08.html<BR/><BR/>7 x gross annual rent = realistic value of property<BR/><BR/>So, if a house rents say for $2000. 12x2000x7 = $164K business value <BR/><BR/>Another reason why I think RE prices will have to fall 50-60%Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-39715548686256668172008-04-24T20:06:00.000-07:002008-04-24T20:06:00.000-07:00In response to the post of 50-60% price drop. Thi...In response to the post of 50-60% price drop. This is nowhere in the realm of possiblity. Properties have doubled since 2000.RE doubles about every 20 years. That's normal, however we have exceeded this trend by approx. 30%. So a 30% correction will likely materialize. A reliable measure is to look at rents vs costs for landlords. When landlords have to subsidize their investment (via paying the mortgage not covered by rental income) is when the reality of correction kicks in as these landlords now see their capital gains speculations going down the toilet. And this is what is happening right now. It's no surprise that Craiglist and UsedX are flooded with renters looking for a place as their landlord just sold the house. The landlord is willing to subsidize only in anticipation of property gains, especially when they leveraged heavily for a windfall. The boom is over. It's all damage control now for recent 2nd property owners subsidizing the mortgage.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-25625509607589419452008-04-24T20:01:00.000-07:002008-04-24T20:01:00.000-07:00I said this on the other Victoria blog but I have ...I said this on the other Victoria blog but I have the private client listing service and I have never seen so many homes over $1 million for sale. It is unbelievable.<BR/><BR/>I wonder if all the so-called rich foreigners are leaving?Anonymousnoreply@blogger.com