May results and a whine from the mortgage industry

May numbers are in, and they're about as expected.  714 sales which puts us on the low middle between a hot market (963 in May 2007) and a moribund one (572 in May 2011).   Prices are well within the margin of noise, with SFH medians up a bit, and townhouses and condos flat.

Just Jack has it right when he says that the market is very fragmented.  There are both reasonably good deals in certain segments, while others have barely declined at all.  The best options price-wise seem to be those houses that have one or two little defects, or a few year old condos.  Unless that condo is cash flow positive, it's likely a losing proposition in the foreseeable future.

While Victoria's market is spectacularly unexciting, the rest of the country seems to be doing ok, with just a few cracks showing in such unimportant places like Halifax and Quebec..  and Ottawa...  and Montreal.  Not to worry.   However just in case there is something to worry about - like more government regulation - the Canadian Association of Accredited Mortgage Professionals are either hosting their annual get together for hay fever suffers (CAAMP ACCHA!), or have released their spring quarterly report.    In there they conclude that the 2012 mortgage changes were inappropriate, in that they apparently didn't do much to slow price appreciation in Canada.

Otherwise there isn't much of interest, mostly because the survey isn't worth a lot.  When they claim that average Canadian homeowner equity has increased by 6 percentage points in 6 months, you can pretty much judge the validity of the rest of the numbers.

One interesting tidbit:  Adding up the increased payments and lump sum payments, we get 12 billion in additional mortgage pay down in 2013.   Pretty impressive right?  Except at the same time home owners extracted $52.7 billion in equity out of their homes.  Well I'm sure the economy won't miss that $40 billion in spending when that well dries up.

May 20 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.

	May 2014				May  2013
	Wk 1	Wk 2	Wk 3	Wk 4
Unconditional Sales	229	406			659
New Listings	572	909			1428
Active Listings	4512	4578			4783
Sales to New Listings	40%	45%			46%
Sales Projection	719	687*
Months of Inventory					7.3

*Counting the stat as a weekday.  

It's looking awful fishy out there

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.

	May 2014				May  2013
	Wk 1	Wk 2	Wk 3	Wk 4
Unconditional Sales	229				659
New Listings	572				1428
Active Listings	4512				4783
Sales to New Listings	40%				46%
Sales Projection	719
Months of Inventory					7.3

More listings piling on and lower sales/list than last year.  Seems the market is equalizing again or as Marko says "a whole lot of boring".

End of month numbers are no different.  The more data we get, the more it seems the decline went from 2010 to 2012, with flat afterwards.  It took a big shift in sales mix to keep median prices flat during the inventory spike after the 2012 CMHC changes, but stay flat they did.  I wonder what the sales mix is like these days?

Another brick is pulled

Just when the Victoria market was starting to show some signs of life after four years of decline, the noose is tightened a bit more.

First off, the BC Financial Institutions Commission (FICOM) is proposing a set of Residential Mortgage Underwriting Guidelines to bring BC credit unions (who are not covered under the federal Office of the Superintendent of Financial Institutions, or OSFI) in line with federal regulations restricting HELOCs to a max of 65% of the value of the mortgage, amongst other restrictions.

In an interview with CMT, Doug McLean, the Deputy Superintendent of FICOM claims that the new BC guidelines have nothing to do with the feds, but they were certainly inspired by them given the similarities.  Perhaps Doug also got a little antsy from the likes of Vancity offering a little too much lending "innovation" by letting people borrow half their minimum down payments.

The new guidelines are out for feedback, but if I know government agencies, that's hardly more than a formality and they will likely be adopted almost as is. How many people will be affected?  Impossible to say, but what's certain is this will prevent some people from extracting equity from their homes, and prevent others from qualifying to buy, thus taking some demand out of the market.

At the same time, CMHC is getting nervous again and is tightening the screws on borrowers.  CMHC has announced that they will stop insuring second homes (Finally! Which industry shill on their board thought that was ever reasonable??) and stop accepting "non-traditional" (aka fake) proof  of income for self-employed borrowers.  Again, the impact isn't huge, with those programs making up only 3% of CMHC business, but the little adjustments add up (more info on the changes here).  And CMHC isn't done yet, even announcing that more changes are coming.  Funny how things change when you throw out the industry insiders and bring in people that actually know how to regulate financial institutions.

All this comes with the chance it might destabilize our apparently stabilizing market.  After 4 years of decline and 6 years of flat prices in Victoria, it seems our market has shed some risk while the rest of the country continued to go bananas (1.3 months of inventory in Calgary right now!).  However the government remains the wildcard in this game, and they are not concerned with little Victoria.  In order to slow the nation, Victoria might get sideswiped.

April 28 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.

	April 2014				April  2013
	Wk 1	Wk 2	Wk 3	Wk 4
Unconditional Sales	108	278	436	564	615
New Listings	338	695	1073	1374	1408
Active Listings	4087	4170	4289	4394	4585
Sales to New Listings	32%	40%	41%	41%	44%
Sales Projection	---	679	685	653
Months of Inventory					7.5

Just about done with April, and it's slowed down a bit from the pace we saw at the beginning of the month.  In fact, it looks like for the first time in almost a year the sales/list ratio will be lower than last year.  Sales will be higher, but if this is the start of a shift the months of YoY improvements might be over.   

April 14 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.

	April 2014				April  2013
	Wk 1	Wk 2	Wk 3	Wk 4
Unconditional Sales	108	278			615
New Listings	338	695			1408
Active Listings	4087	4170			4585
Sales to New Listings	32%	40%			44%
Sales Projection	---	679
Months of Inventory					7.5

Same pace continues, sales ahead of last year.  This month might even be ok compared to more than just last year, but I don't think it'll be anything to write home about.   Teranet for March is out, flat year over year.  The beginning of the month predictor said to expect 705 sales, which should be pretty accurate given that sales are still accelerating through April.   

Tim Ayres is taking my jerb

What happened to the old spinmeisters at the VREB?   Gone are the days when we needed this blog to de-spin the VREB press release and no matter the market it was a good time to buy.  Ever since Tim took over, the press releases have been getting progressively more restrained and, dare I say it, balanced?

It starts with the title, "March 2014 Real Estate Activity in Victoria".  That's so boring I could have written it.  What happened to "Spring Market Rebounds in Victoria?" or "Buyers Frothing at the Mouth for Your Home"?  After all, sales are up almost 20% from last year.   It's here I would point out the problem with that comparison, but Tim has thought ahead; so I'm reduced to a lame "what he said".

However, the average sales for the month of March over the past five years is 607 properties per month, so though 2014 is stronger than the year previous, sales have not yet returned to the longer term average

Prices are flat according to the MLS HPI, and the market according to Tim is balanced.  "There is no extreme upward or downward pressure on housing prices right now".   Sure enough, the data agrees.

MOI of 7 is a bit less than the March of the last 3 years, but still on the high side of a balanced market.

Sales to list is again stronger than the last years, but not strong.  

I like the yearly data because it flattens out all the seasonality and minor price movements.   And something unusual is happening.  Whether due to sales mix changes or actual price increases, the yearly median price has gone up for a few months now.  That hasn't happened since the last peak in 2010.

$5000 isn't much, but it's a break from the multi-year trend we've seen.  However, as Just Jack says, if you really want to know what's going on, you have to look at the segment of the market you're interested in.