Balanced Reporting

I'm not a reporter and I'm slightly imbalanced. I make no pretenses about my status as a doggedly bearish RE market pundit. Read this site for two minutes and you've got that figured out. But what about the MSM? Many people trust that the news is balanced and free from bias. Bias appears in editorials and letters to the editor, not in news stories, is the naive belief, right? Take this story for example, how balanced is it?

Housing prices hit record high

New levels in average and median, but signs of cooling are showing

Carla Wilson, Times Colonist

Published: Tuesday, October 02, 2007

The average price of a single-family home in Greater Victoria has once again hit a record high, reaching $584,193 in September.

The new mark mashed the previous record of $576,632 set in August.

Last month, the median price of houses -- the midway point of everything sold -- also moved up to $520,000, from $515,000 in August.

But while the average and median prices are rising, there is a buzz in the industry that the market is starting to cool.

September saw a total of 632 sales through the Multiple Listing Service, down from 846 in August, the Victoria Real Estate Board said. Even so, overall sales for the first nine months of this year are running 12 per cent above the same months in 2006.

As is usual in this market, several sales of high-priced homes went through last month. Board president Bev McIvor said there were 17 single-family home sales of over $1 million and this had a significant impact on the overall average.

She said nearly a quarter of all single-family homes sold during September for less than $425,000.

The average price for condominiums sold last month was $341,014 and the median was $288,500. And townhouses earned an average price of $402,313 last month, with a median price of $375,000.

A total of 3,381 properties were listed on the local MLS at the end of last month, down from 3,449 in September 2006.

Of the single-family houses that sold in September, the average time on the market was 43 days, down from 56 days in September 2006, board numbers show.

Daniel Clover, of Genesis Group Real Estate Inc., said days-on-the-market statistics are showing that if homes are priced correctly, they get sold.

Clover has been talking to fellow real estate agents and the sense is that while the market is still active, it is beginning to settle. "We have got fewer people showing up at open houses, we've got fewer sales going through, price reductions are becoming more prevalent ... The buzz phrase right now is, 'If it isn't priced right, it won't sell.'"

Greater Victoria is a "price-sensitive" market, Clover said. "There is a change going on out there. Buyers are not jumping at the first home they see."

When prices come down, the drop is often larger than normally seen in the past few years in order to catch the attention of buyers, Clover said. He believes that homes are staying on the market longer than a year ago, referring to all residential properties, not just those sold.

Even so, the market remains healthy because there is a demand for Victoria properties, Clover said. Disaster is not looming and the economic indicators back that up, he said. "We have not overbuilt to excess," Clover added.

This is a good time for buyers because they are in a position to negotiate, he said.

Local MLS sales last month included 335 single-family houses, 150 condos, 77 townhouses, and 21 manufactured homes, the real estate board said. Total residential sales value was just over $279 million.

Saanich East saw the largest number of single-family sales, with 62 sales at average price of $616,027. Langford followed with 35 single-family sales, with an average price of $490,379. Langford topped the number of townhouse sales with a total of 28 and an average price of $326,021.

Victoria beat other areas in condo sales with 69 and an average price of $322,914. Saanich East and Langford tied for second place with 15 sales each.

Normally anything I steal from websites I italicize so that you aren't confused that I wrote it. I don't do that here because I italicize bull terms and bold bear terms. Here's the count: Bulls: 11 Bears: 10. I point out the one statement that can be construed either way, some think 17 sales over a mill is great for the market, some think it inappropriately skews the average. So I counted as 1 each. That said, the MSM has picked up the cooling story. Even given it a tag in the sub-headline. Times are changing. This is almost balanced.

I ran with a Realtor I know tonight. I was asked, "still looking?" I responded with, "um, not seriously, but still blogging about the market. Kinda funny right now. You still renting?" The response to my question: "You'd have to be crazy to be buying right now." That came from the horses mouth.

Considering that since last Friday the BoC has dumped a billion dollars a day to prevent having to drop the interest rate, I'd say that the storm is brewing. If the BoC does the right thing and checks inflation now with a rate hike or at minimum no rate changes, and no more dumping cash into the market, we may be saved from long term pain. If they don't, I'm thinking the similarities to 1981 are too striking to believe that a different outcome is a given.