Simple question

Should we talk politics during this election?
	yes
	no
pollcode.com free polls

Monday market update: feeling down?

MLS numbers 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.

Month to date March 2011 (last week's numbers in brackets)
Net Unconditional Sales: 544 (438) +106
New Listings: 1,262 (987) +275
Active Listings: 3,902 (3,855) +47
Weekly sales to new listings ratio: 43% (51%)
Month-to-date sales to new listings ratio: 43% (44%)

March 2010 totals 
Net Unconditional Sales: 789
New Listings: 1,719
Active Listings: 3,712
Sales to new listings ratio: 46%
Sales to active listings ratio: 21% or 4.7 MOI  

Despite the arrival of spring, as indicated by the flowers and blossoms quickly making their presence known, the only dust collecting on the local real estate market isn't due to pollen, but rather stale listings.

Sales are definitely down year over year. Listings are definitely up year over year. There's little evidence of price pressure on the market, so we can't definitively say that buyers are getting good deals these days. Nope, sales price data is definitely disconnected from sales volume data right now. And I have few ideas why.

You?

All quiet on the western front

D-day passed us by unceremoniously on March 18th. You can be forgiven for not having noticed, what with sales so low regardless in 2011. What's happening out there now?

Here's the most active category of home sales in pictures (Single Family Homes under $550,000 near the core):

Nothing but new listings and price drops today and yesterday.

 

Big bunch of price reductions on the 22nd. I guess these sellers got the message that the buyer pool shriveled drastically after the mortgage rule changes took effect.

One sale on March 19.

Other Matrix and PCS accounts show little activity as well. Like the VREB, BCREA and CREA will be doing later this spring, I might have to revise down my anticipated monthly sales volume total soon.

Eerie ain't it? These are beautiful days to be shopping for a home. Lots of listings, few buyers, great weather, low interest rates. Maybe people have finally woken up to the truth about Victoria's over-priced market? Or maybe they're finally all tapped out? Or maybe this is just one isolated segment of the market that isn't representative of the rest?

Monday market update: it's a stalemate

MLS numbers 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.

Month to date March 2011 (last week's numbers in brackets)
Net Unconditional Sales: 438 (266) +172
New Listings: 987 (647) +340
Active Listings: 3,855 (3,638) +217
Weekly sales to new listings ratio: (51%)
Month-to-date sales to new listings ratio: 44% (41%)

March 2010 totals 
Net Unconditional Sales: 789
New Listings: 1,719
Active Listings: 3,712
Sales to new listings ratio: 46%
Sales to active listings ratio: 21% or 4.7 MOI 

Listings should be piling on this time of year. They're not. At the current rate, with only 10 days left in the month, we'll be lucky to see 1400 new listings on the month. That's a 15% decline from March 2010. If you're thinking that means prices will rise, think again. Buyers are even less active in the market than sellers, with March 2011 sales on pace to decline some 20% from March 2010.

One thing's for sure: the VREB is well off the pace necessary to support their rising sales volume thesis for Victoria's market in 2011 when compared to a "dismal" 2010. Lucky for those who can't fathom falling prices, the sellers are on strike too.

It will be interesting to see if sales volume can keep pace with the first 18 days of March for the last 13. I'm willing to wager they won't. I think this market will be hard pressed to see 620 sales by month end. Prices will be flat, which equals plus or minus 3% in current sales volumes.

Unless there's a rush for the exits, likely caused by a black swan event, 2011 looks like a whole lot of no-change for the Victoria market. Now more than anytime in the past 5 years, if you're buying, you'd better be buying the home you're buying for the long term. If you think you can live in a condo for the next two years and trade up to a house.... good luck, you'll need it.

Dropping the bomb

In about 3 hours, if you haven't closed on your new home, well, you're literally sh&t out of luck if you can't afford the home you want without using a 35 year amortization and require government-backed mortgage insurance.

You snoozed, you lose-d.

It will soon be March 18th. All the usual pundits claimed that a sales-frenzy would be created by the mortgage rule changes and that spring would come early for the Victoria real estate market.

It didn't. Sales have been ho-hum, averaging about 20% less than this time last year. Sure, we're seeing higher sales volume than in 2009, only marginally so, but that's nothing to be happy about considering 2011 is shaping quickly into the second-lowest sales volume start to a year in the past 10.

If you're left wondering why, you're not alone. Unemployment isn't up. Nor are interest rates. There's no economic calamity. No recession. No impending doom. No riots. No protests. No instability. What could possibly be the issue keeping the Hot Asian Money from buying in Glanford? Why aren't the rich Albertan Oilmen snapping up Bayview and Hudson condos for weekend playgrounds? I thought it was en-vogue for gangsters to buy their goo-mah a Bear Mountain condo so that when they came to golf they never dined alone? And everyone, and by everyone I mean the world's elite wealth who really know what's what and who's up when the rest of us look down, wants to own a prestigious Beach Drive address so they can park their mega yacht in the sheltered bays and snap iPhone shots to tweet out to their legions of adoring fans, don't they?

Oh, wait. It's locals. I forgot. Real estate is always local. It's location, location, location. I guess the locals are exhausted. Or priced out forever. Or maybe they stopped caring. Whatever, they sure have stopped buying. I blame this guy. You should too:

Super Jim made it harder for you to buy a home today. It's too little too late, but damn it Jim, it's still St. Patrick's Day and I'd still like to buy you a beer for the effort. In that short 20 minutes I'll have your ear, I'll convince you to fire them all at the CMHC and privatize that crown corporation to get their gambling off our collective books.

Monday market update

MLS numbers 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.

Month to date March 2011 (last week's numbers in brackets)
Net Unconditional Sales: 266 (119) +147
New Listings: 647 (279) +368
Active Listings: 3,765 (3,638) +127
Weekly sales to new listings ratio: (40%)
Month-to-date sales to new listings ratio: 41% (40%)

March 2010 totals 
Net Unconditional Sales: 789
New Listings: 1,719
Active Listings: 3,712
Sales to new listings ratio: 46%
Sales to active listings ratio: 21% or 4.7 MOI

Despite the relatively high sales to new listings ratio, the true story about current market state in Victoria is being told in the low sales and listings volumes. Active listings volume typically peaks in Victoria in the spring. We're not seeing enough new listings to create significant negative price pressure. Nor are we seeing sales volumes at a level necessary to create upwards price movement.

Things look to be shaping into a dull spring market punctuated by a lack of quality offerings and a dearth of active buyers.

Lies, damned lies and statistics

VancouverCondo.info linked to this disturbing article on the CBC's website today. It's a story about a survey that says Canadians are prepared to weather a housing price collapse -- conveniently they don't define what a housing price collapse looks like, and by they, I mean the RBC which conducted the study to support their business. It's actually quite blatant what they're trying to accomplish when you read the actual press release. Here's the synopsis:

• The vast majority of Canadians (90%) believe in home ownership, you should too
• The vast majority of Canadians (85%) have no trouble paying their mortgages despite record unaffordability and rising interest rates -- so don't worry about it and get yourself in over your head today too
• The major reason why most Canadians are motivated to buy soon is rising home valuations (26%) and rising interest rates (22%) -- they want to buy now before they're priced out forever, very smart folks these, use our handy online calculator
• BCers are most likely to want to buy new rather than used, most likely to buy before they're priced out forever and more prone to group think "buy now, buy now, use RBC, use RBC, buy now, buy now"

So yeah, the RBC release was a bit much in my opinion. But fair enough, we've come to expect this from business, so our spidey senses tingle and we read it for what it is. Note to RBC: in the future, if you want to have your press release turned into a news story without the inconvenience of edits for balance, send a box of chocolates and a bouquet of flowers to the fine folks over at the Times Colonist. They're well trained in the finer aspects of RIGHT CLICK>CUT and RIGHT CLICK>PASTE.

The CBC, well in this case, they did try to inject some balance into the story by using RBC's inconvenient survey contradictions against them. While RBC is currently saying Canadians are having no problems buying and paying for their houses, they didn't ask how the effects of doing so are impacting other important financial activities: like actually saving real money. Thankfully for us, back in October, RBC did ask Canadians that question and thankfully someone at the CBC (likely an industrious intern; they always go above and beyond) Googled for some balance (was that so hard?). Here's what they found:

• 58% of Canadians can't save what they think they ought to
• 38% of Canadians can't save at all

But the intern(?) didn't stop there. Industrious little folks, not content to wait for the established players to retire off and open a career path for them; nope, I tell you, these new-fangled millennial careerists are go-getter's who are going to manage the news desks sooner than the previous generations did; picked up the phone (not likely), or e-mailed (they're tech savvy), CAAMP to get a second opinion! And what did CAAMP tell them?

• "Housing market crash? You're making a big deal out of nothing, there's nothing to see here, we're not like Americans and we didn't load up on mortgage debt over the past decade"
• Only 2000 Canadian households would face foreclosure if interest rates rise
• The Canadian mortgage market expanded by 10% this past decade

There's an old saying: there's lies, damned lies and statistics. In this piece, I've pointed out the lies and those last couple of bullet points are most definitely a damned lie (or it could be a misquote). Here's the statistics:

Does that look like 10% over the past 10 years to you? It's actually more than double. Maybe CAAMP meant 10% per year over the past 10 years?

What about last year when CAAMP told us that 16% of Canadians couldn't weather a $300 increase in mortgage payments and that 11% of Canadians couldn't weather a 1.5% rise in interest rates (source)? That surely will impact households significantly and a great many more than 2000 homes could (will) be forced into foreclosure.