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 2013 month to date (previous weeks in brackets)
Net Unconditional Sales: 87 (32)
New Listings: 407 (161)
Active Listings: 3681 (3574)
Sales to new listings ratio: 21% (20%)
January 2012
Net Unconditional Sales: 372
New Listings: 1088
Active Listings: 3715
Sales to new listings ratio: 34%
Sales to active listings ratio: 10% or 10.0 MOI
I'm surprised no one has mentioned that sales have completely collapsed compared to the first two weeks of January 2012. One year ago we started the month with a sales rate of 15.4 sales per business day. So far we're at 9.7. Sales are going to have to seriously accelerate if we're going to get anywhere near last year's crappy numbers.
New listings rate is also down a bit but not nearly as much. While sales rate has taken a 37% hit, new listings are only down by 9% compared to the same period last year.
Tony Joe provides the entertainment video of the week.
"So what you're saying is don't be afraid of that 5% down, or whatever"
I'm surprised no one has mentioned that sales have completely collapsed compared to the first two weeks of January 2012. One year ago we started the month with a sales rate of 15.4 sales per business day. So far we're at 9.7. Sales are going to have to seriously accelerate if we're going to get anywhere near last year's crappy numbers.
New listings rate is also down a bit but not nearly as much. While sales rate has taken a 37% hit, new listings are only down by 9% compared to the same period last year.
Tony Joe provides the entertainment video of the week.
257 comments:
«Oldest ‹Older 201 – 257 of 257"So what explains the "local" phenomenon of Victoria's averages ballooning to $600k?"
You're right, this place is desirable. I moved here and I love it here. But desire has a limit. Real estate is purchased with credit which has been very available.
What happens if it is not so available? Will the prices be sustainable?
What sales figures would convince you that something is happening. Would 50% of yoy sales this month make dent in your undeniable assertion that people will buy here no matter what?
@CS
" the Feds may engineer sub-zero real interest rates which could give RE a further upward kick, in which case all you prudent folks avoiding great risk, will lose out."
You have posted about sub-zero interest rates a number of times in the past. Keep dreaming. What next? I'm expecting you to tell us that the government has invited a huge UFO to Victoria that will be dropping off 200,000 young, rich human clone couples to boost the local real estate market.
The feds are not, at this point, attempting to inflate the bubble more. If they were, they would not have made so many mortgage rule changes to put an end to the reckless use of excess credit in this country. If they wanted to stop the downward direction of the housing market they would likely bring back some of the same lax lending standards that caused this housing bubble.
You're right, this place is desirable.
Bingo. Not only is Victoria desirable, but it's more desirable than almost all other Canadian cities. And prices back this up. (Sorry, patriotz: population growth is not the only measure of desirability. Too simple.)
What happens if it [credit] is not so available? Will the prices be sustainable?
Don't worry. Believe it or not, I'm not saying that our prices are necessarily sustainable, or that they cannot or won't go down.
I'm basically just saying that it is different in Victoria and probably will be from now on, IMO.
I'm not denying that prices can and will go down; rather, I think Victoria has become more expensive than almost all other places in the country and it will likely stay that way.
"I'm not denying that prices can and will go down; rather, I think Victoria has become more expensive than almost all other places in the country and it will likely stay that way."
Can you elaborate on this? Are you saying that it has become more beautiful or the infrastructure has improved. Why was it in undervalued before? Why couldn't such a thing happen again?
Are you saying that it has become more beautiful or the infrastructure has improved. Why was it in undervalued before?
You've identified the next logical question, which I too have asked myself. Unfortunately, the answer to why it hasn't always been this way for Victoria is one that I have yet to figure out.
That it just randomly happened to Victoria is not very persuasive. But beyond what I think is not the answer, I don't have a good answer.
Any ideas, people? Or do you subscribe to the random-occurrence theory?
(The random occurrence theory is well-known in economics. *sarcastic*)
Marko has repeatedly expressed his (biased) opinion that the market is stable (it isn't) and that current prices are affordable (they are not). You should be on him about that, if it is repetition that really irritates you.
Prices are affordable to some extent, in my opinion; however, we just haven't defined affordability. I am content living in a 530 sq/ft condo and when I have kids I'll be content with a Fernwood bungalow with a suite. If you think an average young family should be able to get into a 2,500 sq/ft home in Oak Bay with a media room, games room and all of that - then yes, we have an affordability problem. In theory, that would be awesome, I would be all pro for everyone having a nice home; however, that is not reality.
As I've pointed out before a 50% market drop would be to my personal benefit. My income wouldn't change; however, my dream home would drop 700k and I would only lose 100k on my condo and equity is a non-issue.
I don't think prices are going up; therefore, I am content to sit in my condo and stockpile savings; however, I am also prepared to work hard to increase my income as I don't see this huge correction coming.
The buyers right now are thinking we are going to see a meltdown, once the majority realize that there will be no giant meltdown people will move on with their lives and get back into the market.
That is why I predict sales this year will slightly eclipse those of last year. Prices, flat or down a bit, nothing life shattering. It will be a slow, boring year in my opinion.
That is why I predict sales this year will slightly eclipse those of last year. Prices, flat or down a bit, nothing life shattering. It will be a slow, boring year in my opinion.
Enough with your radical ideas.
Could it be a run off from the most epic bubble to hit Vancouver?
I think home owners who think their home or condo value will recover to the peak of 2007-2008 / 2009-2010 will be disappointed with 2013.
I also think those bears who are hoping that the average $500,000 home in the core will drop to $400,000 will also be disappointed with 2013 as well.
@intro about info
"You're essentially admitting to being nothing more than a public service announcement distributor."
I believe a public service announcement is intended to help inform and educate. No?
Your frenzy of seqential posts suggest you are upset or angry.
Maybe unease is setting in, intro.
Your frenzy of seqential posts suggest you are upset or angry.
It has gotten to the point when I see a post by info I just skip to the next one.
Even thought I disagree with others such as Just Jack on a lot of things, I certainly read his posts. Goes to show that you can disagree with people but they do provide content worth reading.
Re: Info's announcements. The difference is that I would never tell anyone what to do. (Also Info's posts are somewhat SEO optimized). For example in 2003 I didn't go around telling people "You must buy now or be priced out with the coming boom." I told people what I observed and my theories and opinion that "a window had opened" and that's it. I didn't presume I knew what would happen nor did I want the responsibility of such sure advice. Info's announcements ring more of trying to influence the market so that he might then buy if I drops. Which is fine but I'm calling it like I see it. I enjoy the debate here and continue to learn from it and find it engaging and humorous. I find Info's posts neither but he has every right to make them. They are much better received here than they were on Garth's blog.
Your frenzy of seqential posts suggest you are upset or angry.
Naw, the frenzy suggests I'm really procrastinating at work this afternoon.
They are much better received here than they were on Garth's blog.
Can you please post a link to that, dasmo?
The rise in value over the last decade wasn't just in Victoria. I think South Surrey-White Rock had a higher rate of appreciation than Victoria. Kelowna, Salmon Arm, Prince George all went up in price.
But I suppose now prices are coming down, Victoria is becoming undesirable.
Astonishing that it may be to some people. People pay the same price for a house in Surrey as they do in Victoria. It sounds like it was a case of credit expansion and not desirability.
Then how come they don't pay the same in Sooke?
I think South Surrey-White Rock had a higher rate of appreciation than Victoria.
Can you back that up?
People pay the same price for a house in Surrey as they do in Victoria. It sounds like it was a case of credit expansion and not desirability.
Nope. It's desirability. More people clearly desired to live in Greater Vancouver (which includes Surrey), Toronto, and Greater Victoria.
Apparently, Kelowna, Salmon Arm, Prince George and ten thousand other cities weren't as desirable as the Big Three.
Cheap and easy credit was extended to Canadians across the country, yet the Big Three skyrocketed above all others.
leverage is not hazardous if it is a portion of one's portfolio
If by not hazardous you mean it's not going to bankrupt you provided that you have extra cash to cover margin calls or cover the loss on a heavily mortgaged house if you are forced to sell it, then no, it's not hazardous.
But then if you are keeping cash to provide extra margin, you can hardly claim to be leveraged.
Otherwise, leverage is hazardous, because it works both ways, the greater the leverage the greater the potential to increase your liabilities.
Which is why you don't go all in on your first hand...
Leverage on a primary residence is not the same as leverage in the stock market because of:
1. the requirement to live somewhere (ie. you'd pay rent if you did not own so deduct this amount)
2. the ability to generate income through a suite or renting rooms (stocks do not offer this!)
3. the ability to rent out
3. the availability of low cost long-term financing for a mortgage
4. the known quality of a home vs. stocks (unless you are a specialist in this)
5. even in the worst case scenario you have bricks and mortar - hard to get to Nortel level
Yes, there really are not two number 3s between 2 and 4 - we really really need an edit button!
Kermit agrees.
It is interesting to consider to what extent the RE market is subject to Federal government/BoC regulation.
The Feds don't want an RE crash, since that would wreck their re-election prospects. So what can they do to give the market another upward kick, or at least keep it from sagging badly.
With only brief reflection it is evident that the possibilities are endless, to use a phrase popular with RE promoters.
For example, interest-only mortgages, as were used to drive prices even higher in some Australian cities than in Vancouver.
Then one could introduce the interest accumulator mortgage, for want of a better name. With this device one would not only not pay down the principal, one would not pay the interest, but just add it on to the principal for repayment after 25 years or whatever. Probably, it would be prudent to require the mortgagee to pay interest on the interest, but that would not be burdensome: 3% on 3% in year one, rising to 3% on something like 100% of the amount initially borrowed at year 25. By then, if inflation has done its work, the house will be worth about as much as the amount borrowed plus accumulated interest. At that point, you could pay the amount owing out of the huge pile of investments you have accumulated as a result of paying so little to service the mortgage. Or you could renew the mortgage on the same terms as originally, etc.
Info, tells us we're too heavily indebted, but that's just the way the bankers like it, everybody paying virtually all their disposable income in interest payments. So why won't we get even more heavily indebted. The means to do it are there.
Now your sounding like Garth CS....
Sorry Introvert
"interest accumulator mortgage"
Why not the Interest Accumulator Mortgage Mortgage. Its the same process except repeated twice. Now your payments are even less.
We can repeat this process until the amount of monthly payments becomes negligible. We can now call them 0-payment mortgages.
Oh good grief. Life will go on.
People need to stop the end of the world predictions because real estate declines in value.
Maybe there will be less credit available. Markets will adjust. If they don't, we will have to adjust. So what, we have way more than most in the world.
Even better the banks could repossess all the homes and turn them into rental suites.
Life is short. Passion is good but not so good when it turns crazy-like. Not that I'm saying anyone here has reached that point.... although Garth has banned Leo.
And "Marko the Magnificent"
Chicken shit...
I am sensing the passion, or fear is getting thick in this pasture today.
Maybe it is just me but I think Kermit would agree.
I'll check and get back to you on that. I have connections.
Also, dasmo... was that crazy talk or was it somewhat related to something?
Today I had lunch with a friend when I saw "G Turner," on my call display. Got back into my car, dialed it up and sure enough I was speaking to Garth Turner...
in reference to Garth banning Leo and Marko. Not that I wouldn't have a tendency towards crazy talk right about now being mr mom for a few weeks...
maybe not so chicken shit after all?
@marko...and?
Yes, please tell all!
Marco, is it possible to email the 3 best deals Jj listed ? Or can you show me those 3 places? I thinking I should hv an idea about those what kinda of property for that price range.
Thank you
Without going into any details I don't think we will be friends anytime soon.
Trent Sze,
Nice to know someone is reading my posts. I thought I would be a kinder gentler person this year. That's why I wanted to show opportunities do exist even in a slowing market. To move away from being thought of as a perma bear, and more like a bull with one descended testicle.
funny JJ....
Marko, Pissed at your video?
Marko - that is too bad you two could not find common ground and agree to disagree. Oh well. I hate typing on the iPad.
dasmo - I didn't mean to elicit info about your cross-dressing gender-reversal tendencies...
marko - details require details
Now your sounding like Garth CS....
If so, perhaps because, like Garth, I am old enough to remember the crash of the 80's. I had several colleagues, just married, who bought a house, saw their (substantial) down payment annihilated, and got divorced.
Whether their financial problems caused their marital problems, I don't know, but they couldn't have helped.
The future doesn't repeat the past but, as someone said, it rhymes.
. Got back into my car, dialed it up and sure enough I was speaking to Garth Turner...
Well what'd he say!
Toto said:
"Leverage on a primary residence is not the same as leverage in the stock market"
It's still leverage, and it can still wipe you out as a few million Americans recently discovered.
Wipe you out? Really?
If a stock drops to nothing you can't still live in it or rent it out while you wait for a recovery. A recovery might never come for a stock if the business was no good to start with.
I would agree it can cause huge losses if you have to sell your house in a declining market. DON'T DO THIS. In very few cases do you actually have to sell. Divorce might be one of them. And mortgaging too close to retirement might be another.
There are mitigation strategies with real estate that are just not available with stocks at all. The fact that some folks in the US did not employ them and chose to either walk away or sell does not mean there are not alternatives.
As for the US, we are already starting to see an upswing in Arizona and a bit in Las Vegas. I don't know other areas.
Also Toto is either a Japanese toilet brand or a small dog.
"DON'T DO THIS"
They were just stupid in the states. Nobody thought to rent out their places. We Canadians have created this new concept called renting.
Just rent out some rooms in your house to the limitless number of renters available and you too can weather the housing downturn.
Yes, we are back to moron chat. It is all about how stupid people are or are not cause that's how I roll. Or were you implying that I was stupid? Not sure...
It is interesting that if you owned a house in 1981 at the "crash" and held for eight years you would be above 1981 prices and then rolling in equity.
I am part of a blog that deals with US real estate issues so I know that many folks are holding underwater mortgages.
In non-recourse states, walking away is an option - not that I think it is good to do this - but unlike Canada, this means the rest of your assets cannot be used to satisfy the debt. You walk away from what you have invested but don't carry the loss.
Short sales are often an option as well.
For those who don't or can't walk away other strategies can work until the market recovers including renting out:
See: http://online.wsj.com/article/SB10001424127887323468604578245510833196592.html
I would, most certainly, do this if I needed to.
The question is why you would need to if you are going to stay in the home given that you bought with payments you presumably could afford and interest rates are even lower now...
Many others are buying up homes in the US at low prices as fast as they can right now.
Other areas are already recovering:
http://www.realtor.com/blogs/2011/12/01/fewer-americans-with-underwater-mortgages-in-third-quarter/
Are you implying that people walked away from their houses because they weren't aware of the options?
From what I can understand from my American friends, underwater mortgages are only a problem if you sell. If you stay put it is not like your mortgage is higher.
Why do you have to sell? Perhaps job loss is one reason. The US economy is not strong right now.
Even in the situation of job loss, if you are willing to rent out your home and move to a cheap rental this might mitigate things until you recover.
I'm not sure everyone wants to do this or feels comfortable with the choice due to fears of being a landlord. Job loss takes a pretty high emotional toll too.
Emotional reactions to short-term crises do not equal "stupidity" even if they have long-term negative consequences. Part of being human and imperfect.
"They’re critizing your blog on House Hunt Victoria again Garth. (Evening of Jan. 17th has a few). What a myopic, self-important, pompous bunch. Not all, but the majority. RE pumpers to the max, they’re mostly RE investors, former? flippers, “house is their retirement fund” types.
Sooooo tiresome." - Denise
HHV used to be a blog I visited daily, and provided good information and some great discussion from all directions and walks of life. It was like a preview of things to come in Vancouver. But the majority of regulars, including the host, have caught the knife solidly in both hands, so of course the Victoria housing market is now bottomed out, will go sideways for a few years, before resuming its inexorable climb upwards. - Devore
Garth,
Is there any way to block #110′s (Marko's) IP from promoting his crap website on here ? I see there is a video trashing you and making claims that are not true, ie;exaggerating percentages and timelines you said and have corrected people on many a time. It’s getting a little nauseous as he now has a personal vendetta after getting his ego bruised for self promoting at all costs. - coastal
Done. — Garth
Agreed Denise, pretty tough sledding over there trying to get through all the mainly bull(sh*t) posts with every hypothesis known to man attempting to keep the dog afloat. I couldn’t imagine myself as a homeowner wasting so much precious time defending my digs. - Coastal
Too funny... Some people really worked themselves up to a froth about this little blog!
Too funny.
BLOG WAR!!
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