Jan 27 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.

	January 2014				January  2013
	Wk 1	Wk 2	Wk 3	Wk 4
Unconditional Sales	71	167	243		294
New Listings	362	610	854		1080
Active Listings	3295	3346	3340		3870
Sales to New Listings	20%	27%	28%		27%
Sales Projection	---	295	310
Months of Inventory					13.2

Surprisingly enough sales dropped second week to third, but we'll still easily exceed last year's total.  

2014 Predictions

Time for another prediction thread.  What will happen in 2014?

My guesses are:
1. VREB sales of 6200 (up slightly from 2013).
2. Greater Victoria 6 month SFH average in Dec 2014:  $580,000 (currently $593,000)
3. BoC overnight rate in Dec 2014: 1%
4. Teranet June 2014: 128 (currently 133)
5. Teranet Dec 2014: 124

As for macro events, the larger economy will be sluggish and boring, with Canada not making any headway on unemployment in 2014.  We will be teetering on the edge of deflation, and if the Bank of Canada is going anywhere it is more likely to be to cut rates than to raise them.   The US will slowly dial back stimulus but in baby steps.  Fixed mortgage rates within a narrow range of current values.

We are off the recent peak of months of inventory as the last mortgage changes worked their way through the market, but as the rest of the country goes gangbusters, I suspect there will be more tweaking of the CMHC this year.   Something less headline grabbing than a reduction in the amortizations, perhaps a tweak to the maximum TDS ratios.

Edit:  And the monthly numbers from Marko

	January 2014				January  2013
	Wk 1	Wk 2	Wk 3	Wk 4
Unconditional Sales	71	167			294
New Listings	362	610			1080
Active Listings	3295	3346			3870
Sales to New Listings	20%	27%			27%
Sales Projection	---	295
Months of Inventory					13.2

The linear sales projection is meaningless in a month like January where sales increase strongly from the first weeks.  We'll be well over 300.

Jan 13 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.

	January 2014				January  2013
	Wk 1	Wk 2	Wk 3	Wk 4
Unconditional Sales	71				294
New Listings	362				1080
Active Listings	3295				3870
Sales to New Listings	20%				27%
Sales Projection	---
Months of Inventory					13.2

You can tell it was a blustery rainy weekend by the number of comments and number of mentions of Phoenix.  Sales total should be around 360 if current pace continues..

Happy New Years your home lost value again

Hey it's a new year.  To get the year started on an positive note, home owners around the Greater Victoria area will be getting their assessment to let them know how many tens of thousands of dollars their largest asset declined by this year.

It's a mixed bag out there, but negative across the board.

Read the complete article on the Times Colonist

A whopping 10% decline in Metchosin, but who cares about those farmers, here in Oak Bay we are insulated.   Yep, a paltry $2000/month decline in value for the standard house there.  

Our assessment is down 4.6%.  Interestingly enough, the bank assessment done in June 2013, was 5% higher than the 2013 BC assessed value which is supposed to reflect value as of July 2013.  Seems like quite the variation.  Either banks like higher assessments, or the appraisal procedure consists of taking the current BC assessment and adding or subtracting a random small number (Just Jack are you offended yet?).   Also apparently the land lost value, while the building increased.  Didn't know that buildings age like wine...   Or maybe they noticed that I scraped the moss off the roof?  

The more sophisticated measures of price have made it clear that despite static medians and averages, the market continues to decline.   Assessments down 2% to 5%, and MLS HPI and Teranet both down 2.4%.  As you can see, the median price declines have flattened out due to changes in the sales mix, while the months of inventory has recovered from our little government meddling last year.   I would expect median prices to start declining again in 2014.

The VREB continues to expand the information they provide, which is great to see.  Many real estate boards are very secretive with information, so despite the interesting spin in their summaries, I commend whoever is crunching the numbers over there for making them all public.  Now please archive the full news release every month, not just the price summaries :)

Thanks to everyone for your contributions and comments on the blog last year.  It'd be a boring place without your input.

Dec 16 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.

	December 2013				December  2012
	Wk 1	Wk 2	Wk 3	Wk 4
Unconditional Sales	94	195			283
New Listings	148	282			405
Active Listings	3829	3709			3896
Sales to New Listings	64%	69%			70%
Sales Projection	---	330ish
Months of Inventory					12.3

Again no point in sales projections using days of the month.  It's Christmas time, only a handful have a presents budget of half a million dollars.

Dec 9 Market Update and a Note on New Condos

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.

	December 2013				December  2012
	Wk 1	Wk 2	Wk 3	Wk 4
Unconditional Sales	94				283
New Listings	148				405
Active Listings	3829				3896
Sales to New Listings	64%				70%
Sales Projection	---
Months of Inventory					12.3

No point in doing a sales projection when sales drop off so quickly in the later weeks of December.  Should be between 300 and 330 according to last year's performance.

A quick note on construction.   Here are the condo starts and completions over the last 23 years.

Some periods of note:

1. The condo boom in the early 90s, when we were building some 75 units a month.  That was when the term leaky condo still made you think of defective prophylactics rather than building envelopes.
2. The aftermath when completions dropped down to 25-30/month for almost a decade.
3. And the market recovery in the 2000s, leading to first a pickup in building, and then a period of over exuberance in 2007/08 when credit was flowing like water.
4. The current levels is what I found interesting.  The price of condos have flatlined and are significantly down from their peaks in 2008.  You can likely ignore the small rebound this year, the MLS HPI shows a dead flat market amongst condos.  And yet despite this miserable market, condo building is going strong.  Some 70 units a month are sprouting up and there is no sign that builders are getting tired of it.  We've seen some evidence of older condos being hit pretty hard by all the new construction, and I think at the current rate of building we will continue to see declines.   

Developers are building at boom-time levels in a declining market.  Interesting strategy...

November numbers and another comparative look

Last time I said that the Victoria market was almost the weakest in Canada since 2008.  Of course it could be that the market here has just been weak to compensate for above average performance in the decade before.   Well since we have Teranet back to the early 1990s we can take a look.

Since 2008 we are the second weakest market in the country.

If we look back 5 more years the picture changes a bit.

We can see that Victoria along with the rest of the west got a little overly exuberant in the years leading up to the financial crisis.  The relaxation of credit seemed to have no effect in the east, while over here it drove prices very quickly.   Back more until 1999 (the earliest year of data for many cities).

This shows the entirety of the boom for Canada.  After our extended flat period, we are on the middle to lower end.  Hamilton, Toronto, Halifax, and Ottawa have appreciated less in 14 years, while the rest appreciated (relatively) more.  Back to 1993, we are once again the weakest link.

In other news the November update is out.  The VREB is a sad panda because sales aren't quite as rip roaring as they have been.   What with last month's discovery that prices are actually down instead of flat, they are struggling to find something positive to say about November numbers.  Well at least prices are up since 2005! "This represents a 36.5 per cent increase since January 2005, when the index was 100".

Funny the headline still says prices are flat, when the article goes on to elaborate that SFHs in the core are down 1.65% from last year, in the peninsula they are down 2.57%, and SFHs in the west shore are down 5.94% in one year.