tag:blogger.com,1999:blog-7123542260692860177.post8324491222278461359..comments2023-12-02T00:38:46.467-08:00Comments on House Hunt Victoria: Monday market updateHouseHuntVictoriahttp://www.blogger.com/profile/07456914359088891317noreply@blogger.comBlogger80125tag:blogger.com,1999:blog-7123542260692860177.post-76471351017279674172011-03-10T19:20:43.773-08:002011-03-10T19:20:43.773-08:00@Jesse,
It was incapable of failing back in the e...@Jesse,<br /><br />It was incapable of failing back in the early 1980s when the GoC had to pump $500M into it to cover it's losses.HouseHuntVictoriahttps://www.blogger.com/profile/07456914359088891317noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-29815462501702550382011-03-10T17:39:09.071-08:002011-03-10T17:39:09.071-08:00"If it holds 400 billion in liabilities and o...<i>"If it holds 400 billion in liabilities and only 8 billion in reserve. CMHC is not that attractive of a purchase."</i><br /><br />Add to that, CMHC is incapable of failing. Imagine for a moment CMHC told banks it could no longer pay out insurance claims. Do you think banks hedged against CMHC defaulting?<br /><br />What could happen is CMHC would not issue new insurance and all new MI would be provided by Genworth or other private insurers.jessehttps://www.blogger.com/profile/02155122147972263497noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-1960133070118553562011-03-10T16:02:55.990-08:002011-03-10T16:02:55.990-08:00Many of my extended family members are from small ...Many of my extended family members are from small town, mainland B.C. where prices really started to drop last year and continue to slide. Although they're horrified by the fact that their neighbours' houses are selling for the same prices that they would have fetched in 2005/6, they still think that the Vancouver/Victoria real estate market (it's all one market in their minds) is an enviable thing to get into and that it will never drop because it's just "in such high demand." They've already forgotten at this point that they were singing the exact same tune about the Interior not long ago. Maybe some of the places that are selling at asking after months of sitting on the market are being sold to people moving here from elsewhere who haven't taken the time to assess the local market and still think that it's hot hot hot and that they have to act quickly? I have many friends who say that they've never even thought of looking at how many days a place has been on the market when they're house shopping, for instance! The general public is not necessarily always going to be made up of savvy shoppers. That kind of thing might, for now, explain some of the anomalies that we're seeing.happy renterhttps://www.blogger.com/profile/00797801196399164312noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-60288966619948629652011-03-10T15:02:31.615-08:002011-03-10T15:02:31.615-08:00Prices on the gulf islands are down significantly ...Prices on the gulf islands are down significantly as well. The assessment on our property dropped 18% over 2010 and many things are selling for well under assessed value. <br />Impatient as I am to purchase I firmly believe that Victoria will not remain immune to any corrections. However, I'm amazed by the fact that while sales numbers seem to be lower, what is selling (within my criteria) is selling at or over asking price. It also seems that places sit and sit for MONTHS without dropping in price and then sell for close to full asking. Logic and reason just don't seem to apply right now.Waitinghttps://www.blogger.com/profile/01783543528310522711noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-43240091263246076272011-03-10T13:39:14.838-08:002011-03-10T13:39:14.838-08:00The market will have its way eventually. That mean...The market will have its way eventually. That means home prices will return to rent levels and do so at the historical average interest rate of 8%. Government intervention (CMHC rules etc) may be able to prolong this process.<br /><br />You can do the math, it's probably somewhere north of a 50% decline in current values.<br /><br />Either that or everyone makes double their salary, rents double and we get an inflationary spiral. Then we will get 20% interest rates (ala 1983) and the market crashes 90%.Philhttps://www.blogger.com/profile/15147308678681712084noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-72741988258224792922011-03-10T13:14:33.133-08:002011-03-10T13:14:33.133-08:00Maybe GE can buy the toasters from China and there...Maybe GE can buy the toasters from China and thereby prop up the "surprise" Chinese trade deficit. ;-)DavidLhttps://www.blogger.com/profile/00353906360642344879noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-82858059610960986792011-03-10T13:04:02.785-08:002011-03-10T13:04:02.785-08:00How typically Canadian.
The Canadian government a...How typically Canadian.<br /><br />The Canadian government and its taxpayers guarantee the liabilities of an American Corporation so that it can compete on an equal basis with a Canadian Crown Corporation. <br /><br />Really, Harper has to get a professorship at Harvard for this alone. Maybe Flaherty can carry his books. I think GE owes every Canadian a toaster for this - that's if the USA made any.Johnny-Dollarhttps://www.blogger.com/profile/12950799399842707067noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-24688868609152225802011-03-10T12:47:49.620-08:002011-03-10T12:47:49.620-08:00@JustJack, pretty sure they're still active an...@JustJack, pretty sure they're still active and fairly certain they face the same restrictions as CMHC when the rules change.HouseHuntVictoriahttps://www.blogger.com/profile/07456914359088891317noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-50121418922926484862011-03-10T12:38:33.089-08:002011-03-10T12:38:33.089-08:00Is Genworth still active in Canada? I'm proba...Is Genworth still active in Canada? I'm probably mistaken, but I thought they pulled the plug on high ratio insurance in Canada?Johnny-Dollarhttps://www.blogger.com/profile/12950799399842707067noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-9231152569370400882011-03-10T12:27:18.572-08:002011-03-10T12:27:18.572-08:00@DavidL agreed.
@JustJack, the gov't backs Ge...@DavidL agreed.<br /><br />@JustJack, the gov't backs Genworth too, level playing field and all ;-)<br /><br />I don't think CMHC is worth much based on its capital to liabilities ratio. But you have to look at its ability to generate revenue, which it arguably has in excess. It's just too bad it only works when the market's in its favour.HouseHuntVictoriahttps://www.blogger.com/profile/07456914359088891317noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-10303067943913296352011-03-10T11:43:20.295-08:002011-03-10T11:43:20.295-08:00@HHV
I agree that the CHMC has outlived its' ...@HHV<br /><br />I agree that the CHMC has outlived its' purpose - after all, wasn't it originally set up as a program to help returning WWII vets purchase houses?<br /><br />In a country where banks are still offering no-money-down mortgages (through cash backs that can be applied to the down-payment), I feel that the banks ought to be carry more of the risk.DavidLhttps://www.blogger.com/profile/00353906360642344879noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-53980715774910991722011-03-10T11:39:24.897-08:002011-03-10T11:39:24.897-08:00An article from the Vancouver Sun that confirms my...An article from the Vancouver Sun that confirms my anecdotal evidence from earlier today that most Canadians still think that things are cheery out there and will be for a while:<br /><br /><a href="http://www.vancouversun.com/business/real-estate/Canadians+remain+confident+housing+market/4408958/story.html" rel="nofollow">Canadians Remain Confident in Housing Market</a>happy renterhttps://www.blogger.com/profile/00797801196399164312noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-28672892411825683812011-03-10T11:32:16.189-08:002011-03-10T11:32:16.189-08:00How much is CMHC worth?
If it holds 400 billion...How much is CMHC worth? <br /><br />If it holds 400 billion in liabilities and only 8 billion in reserve. CMHC is not that attractive of a purchase. In order to make a sale, the government would probably have to continue to guarantee the current 400 billion or substantially increase the reserve for current and future claims. <br /><br />Maybe the Chinese can buy CMHC. At least they wouldn't have to order new stationary.Johnny-Dollarhttps://www.blogger.com/profile/12950799399842707067noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-82221398997106514112011-03-10T11:12:35.169-08:002011-03-10T11:12:35.169-08:00@DavidL, CMHC only insures the spread between what...@DavidL, CMHC only insures the spread between what the mortgage amount is and what the property value was at sale in cases of foreclosures involving mortgage insurance. There's a bunch of costs the banks assume in these scenarios that aren't insured. All told, they add up to be negligible on the business side of real property lending right now. <br /><br />The CMHC has outlived its mandate and has expanded outside its original scope. It should be sold off and the risk should be transferred away from the public, who generally don't have a clue there's any risk to them at all and are, in fact, the risk themselves based on their spending habits on real property. <br /><br />I won't hold my breath on this one. If it ends badly, then there will be changes. Until that happens, the Gov't (doesn't matter which party) will continue to hold the CMHC up as the poster child for prudent financial practices in Canada.HouseHuntVictoriahttps://www.blogger.com/profile/07456914359088891317noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-38884742617868864752011-03-10T11:11:46.708-08:002011-03-10T11:11:46.708-08:00@Wally wrote: Some argue we’ll retrace to 2000 pri...@Wally wrote: <i>Some argue we’ll retrace to 2000 prices - I don’t see it. Does anyone know what the average house sold for in 2000? I think it was around 250</i><br /><br />You are correct that the average SFH was $250K in 2000. (See my link to VREB historical stats 3 postings above.)<br /><br />I agree that 2000 prices is highly unlikely - but with rising energy and food prices, various wars and unprocessed sewage being dumped off Clover Point (this is a joke, folks!), inflation is going to be hard to predict!DavidLhttps://www.blogger.com/profile/00353906360642344879noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-12003484683565666662011-03-10T11:09:57.639-08:002011-03-10T11:09:57.639-08:00My apology, to Simple Man.
Credit to you and thro...My apology, to Simple Man.<br /><br />Credit to you and through you to Marko, who like you, is a valuable contributory to the blog. <br /><br />Now - where's my heckler?Johnny-Dollarhttps://www.blogger.com/profile/12950799399842707067noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-65873790242437105072011-03-10T11:05:40.151-08:002011-03-10T11:05:40.151-08:00@Marco wrote: The consensus on this blog is if you...@Marco wrote: <i>The consensus on this blog is if you buy right now you will lose big.</i><br /><br />There are always good deals to be had in any market. ;-)DavidLhttps://www.blogger.com/profile/00353906360642344879noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-61929831493049500672011-03-10T11:04:12.215-08:002011-03-10T11:04:12.215-08:00@Leo S wrote: I wouldn't hold my breath for th...@Leo S wrote: <i>I wouldn't hold my breath for the mortgage changes to be a big trigger. 35 year ams are gone, only to be replaced by skip a payment schemes. I'm still appalled at that brazen circumvention of the regulations and hope the govt cracks down on it.</i><br /><br />Likewise, I am also appalled. I promote the idea that the government should immediate change rules regarding CHMC insurance so that only 80% of the purchase price is insured. The bank (or lending institution) would be liable for the remaining 20% of a defaulted mortgage. I am certain that this would make the banks much more cautious about there lending practices.DavidLhttps://www.blogger.com/profile/00353906360642344879noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-15071340334593654762011-03-10T10:59:52.328-08:002011-03-10T10:59:52.328-08:00@Evan wrote: I'd love to see some of the regul...@Evan wrote: <i>I'd love to see some of the regular contributors make some predictions on when exactly the collapse will take place, maybe something that could be revisited and compared to reality ...</i><br /><br />My prediction is by the end of 2014, the average SFH price will have dropped about 30% to mid-2005 levels (~420K). Prices will stagnate (not keep pace with inflation) thought 2018. The same kind of stagnation occurred during the latter part of the 1990's. I expect a larger correction with condominium prices.<br /><br />I base my prediction on a modest understanding of economics and about 30 years of observing the fluctuations in Victoria housing prices. In case someone thinks that I'm a "hopeful" bear, waiting for the market to drop - I already own a house with just 3 years left to pay off the mortgage.<br /><br />My ongoign concern is how a sigificant drop in real estate prices, combined with increasing interest rates and a flat (or declining) economy will: [1] dramatically affect ability to pay off debt, [2] thus restrict non-essential spending, [3] increase defaults, and [4] strain personal relationships. I think that our economy is going to be suffereing for a long time.<br /><br />You can view historical SFH prices at: <a href="http://www.vreb.org/pdf/historical_statistics/YE782009.pdf" rel="nofollow">http://www.vreb.org/pdf/historical_statistics/YE782009.pdf</a>.DavidLhttps://www.blogger.com/profile/00353906360642344879noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-11210945086393582011-03-10T10:58:44.299-08:002011-03-10T10:58:44.299-08:00Take my opinion for what it is worth. I have had ...Take my opinion for what it is worth. I have had a lot of experience buying/selling/renovating properties. My gut feeling says that we are going to get a boatload of new listings in the next few months with very little sales in comparison. Don't ask me why.....I just "feel" it. We'll see. I hate sitting on the sidelines, but there isn't a choice.Alexandraherehttps://www.blogger.com/profile/13100843258061373047noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-15720194504899395072011-03-10T10:57:46.845-08:002011-03-10T10:57:46.845-08:00This comment has been removed by the author.a simple manhttps://www.blogger.com/profile/13054677016369304449noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-68321208116452116152011-03-10T10:57:46.644-08:002011-03-10T10:57:46.644-08:00This comment has been removed by the author.a simple manhttps://www.blogger.com/profile/13054677016369304449noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-21784977659605766712011-03-10T10:57:46.412-08:002011-03-10T10:57:46.412-08:00JJ - to be fair to Marko, I was the one who foreca...JJ - to be fair to Marko, I was the one who forecast to 10% drop in each of the next two years.<br /><br />Thanks for all of your analyses. I agree that the drop is already happening and moving from the extremities inward.<br /><br />Sooke MOI over 17. That is hard to ignore.a simple manhttps://www.blogger.com/profile/13054677016369304449noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-26868424904062793232011-03-10T10:53:32.714-08:002011-03-10T10:53:32.714-08:00The previous information was only for the core dis...The previous information was only for the core districts of Victoria, Esquimalt, Oak Bay, Vic West and Saanich.<br /><br />The Westshore seems to be a completely different market and the farther you go from Victoria's down core the worse the market becomes. For example there are 206 homes for sale in Sooke today, but only 12 homes have sold in the last 30 days. With the sold prices ranging from $285K to $995K. So good luck in trying to figure out where this market is going.<br /><br />For those thinking that a crash can't happen in Victoria - you should be asking the people that live in Port Renfrew that question. For example a home that is "listed" today for $195,000 had sold back in February 2006 for $250,000. For people in Port Renfrew - the crash has already begun.Johnny-Dollarhttps://www.blogger.com/profile/12950799399842707067noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-49432891826404449982011-03-10T10:31:14.470-08:002011-03-10T10:31:14.470-08:00The last time we saw a drop in year over year sale...The last time we saw a drop in year over year sales activity, similar to today, was 2008 to 2009 when sales activity for homes in the core dropped off 24 percent and houses were selling at 8 percent less than the same time period a year before.<br /><br />My opinion, is that we don't have enough sales to cause prices to increase and at our current sales rate, the core property values for detached homes are slipping away.<br /><br />Assuming that the Mortgage changes have not brought future demand forward, even a marginal one percent increase in the interest rate may drop the sales activity by 10 percent. And I think, that would accelerate the fall in prices from Marko's estimate of 10 percent to 20 percent. <br /><br />Of course this is just the demand side of the equation. If sellers panic and flood the market with listings - all bets are off and the race to the bottom begins.Johnny-Dollarhttps://www.blogger.com/profile/12950799399842707067noreply@blogger.com