January 2013 (previous weeks in brackets)
Net Unconditional Sales: 294 (251, 177, 87, 32)
New Listings: 1080 (917, 701, 407, 161)
Active Listings: 3870 (3812, 3759, 3681, 3574)
Sales to new listings ratio: 27% (27%, 25%, 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 not quite sure what to say about these abysmal numbers except that I am surprised at just how weak they are. Sales down 21% from last January while listings remain the same. And it's easy to forget just how bad last January already was. A typical January in the boom years had sales closer to 450.
Months of inventory sitting at 13.2!
The only January in recent history that was worse was 2009, and sales very quickly rebounded in the following months. Anyone want to bet if that will happen this year?
Update: Let's see what the VREB has to say about January.
I'm not quite sure what to say about these abysmal numbers except that I am surprised at just how weak they are. Sales down 21% from last January while listings remain the same. And it's easy to forget just how bad last January already was. A typical January in the boom years had sales closer to 450.
Months of inventory sitting at 13.2!
The only January in recent history that was worse was 2009, and sales very quickly rebounded in the following months. Anyone want to bet if that will happen this year?
Update: Let's see what the VREB has to say about January.
Although January 2013 sales are 27% lower than January 2012, the six-month average price for a Greater Victoria home is only down 1% for the same period.I don't have the foggiest idea how they came up with 27% sales decline. It seems they took the sales drop of 78 and divided that by 294 which is.... not correct. In any case, prices are flat!
"One Member told me that he has several potential buyers, but they can't find anything they like."Attention sellers: The easiest way to make your house attractive is to drop the price.
"He (VREB president Shelly Mann) believes the economic fundamentals are strong, and as a result the sales volume will increase 4% this year over 2012, but prices will remain flat."We will add this to the official predictions. Sales up 4%, prices flat.
135 comments:
Last time the monthly sales were in the 200's was in January 2009, following the financial crash of late 2008.
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I am surprised at just how weak they are. Sales down 21% from last January while listings remain the same. And it's easy to forget just how bad last January already was. A typical January in the boom years had sales closer to 450.
Why are we comparing the bust years (now) with the boom years? Both are wacky. How is it beneficial to compare wacky-high with wacky-low?
Instead we ought to compare both booms and busts with average or "normal" periods, insofar as we can determine what those are.
There's my original thought for the day.
"the market is even more balanced than it was before" -VREB
For those who can't wait...
Median = 489,000
Average = 530,517
Condos down even more, almost 16% compared to 2012 average.
last time median was this low was Jan and Feb 2009.
Prior to that we go back to May, 2007.
3 month rolling median (516) is back to April 2009 levels.
Inflation adjusted 3 month rolling median (516) is back to April 2006 levels.
The housing market is very weak. Similar to 2009. The government should have let the market sink to where it would have without intervening in 2009 by making credit even easier to obtain. We could have been almost half way through the housing market correction and painful deleveraging process by now instead of having to start over from the beginning.
This is what eventually happens when lax lending standards are brought in to create an environoment of excess credit for more than a decade. Sure it helps the economy temporarily as the housing market surges higher, but that can only work for a certain amount of time. Once the market turns the other way, and it always does, the positive effect on the economy reverses as well.
The US went through 6-7 rough years as their housing market corrected/crashed. The deleveraging process is always painful. Their economy is still struggling, but at least they don't have years of a falling housing market to deal with like we do.
"Condos down even more, almost 16% compared to 2012 average."...and buddy wouldn't accept 1% bellow list? Idiot....
Why are we comparing the bust years (now) with the boom years? Both are wacky. How is it beneficial to compare wacky-high with wacky-low?
Actually I compared this year to last year first, but then added the boom years to give context because last year was already a terrible year for sales.
Instead we ought to compare both booms and busts with average or "normal" periods, insofar as we can determine what those are.
What is normal? I can't think of any year that would be representative of a "typical" Victoria market.
Median = 489,000
Average = 530,517
Crazy. Of course that is just one month and will almost certainly bounce back in one of the next few months, but the direction is unmistakable.
"Instead we ought to compare both booms and busts with average or "normal" periods, insofar as we can determine what those are."
2003?
The US went through 6-7 rough years as their housing market corrected/crashed. The deleveraging process is always painful. Their economy is still struggling, but at least they don't have years of a falling housing market to deal with like we do.
It is going to be fascinating to watch what happens as Canada hits their downward stride just as the US is recovering.
Canadian bonds are ~90% correlated with US bonds, so this might actually bring some mortgage rate increases.
2003?
Jan 2003 sales: 493
"Jan 2003 sales: 493"
I guess it's hard to define "normal" when we constantly have to adjust to "the new normal".
Not pretty...
BC Population
full article
Homes are just too expensive in Victoria. These prices are not sustainable at the current low level of sales. And that's why prices are dropping.
I think it would be wise for a prospective first time buyer to cut back their debt service ratio to 30% to offset the cost of living in Victoria which has dramatically increased over the last couple of years.
One of the ways to trim your budget is to spend less on housing. That means Victoria prices will have to get a lot cheaper before buyers return to the marketplace and sales activity returns to long term norms.
Looking back over the years we would need at least two back to back years with double our current sale volumes for prices to begin to steadily increase once more.
You can't time your purchase to the absolute bottom of the real estate cycle, but real estate isn't measured with a stop watch, it's measured with a calendar. You just have to buy sometime during that two year period when sale volumes are double our current level. That's as close as you have to be in timing your purchase to the bottom.
The typical home in Victoria has come down around $40,000 over the last year. That more than compensates for the rent paid for that same home during that same period.
Far better for a new home buyer to wait for prices to come down to where their debt service ratio is less than 30%. Choosing to live in a rental property for the next year or two will have a massive benefit in what they'll pay for a mortgage over the next 25 years.
Even holding off from buying your first home this last year means you will be out of debt sooner than those that bought a year ago. Or it could be the difference between having a renter in the basement or not.
And before the Rat Pack descends on me, most of the above applys to first time home buyers. If you already own a home, your circumstances are different and this could be an exciting time for a change in lifestyle.
You don't have to spend the rest of your life in the mouldy city.
Marko's last few posts (about sellers hold up their price) reminded me of our own house purchase experience in Feb of 2009.
The sellers put the newly moved/built house for sale in Oct 2008, had some interests but no taker at the asking price and they didn't want to take any lower bid. By the time we walked by the "for sale" sign by chance in 02/09, they had dropped the price twice. After another failed offer/counter offer cycle, then there was a bidding between 3 offers including ours. The sellers just accepted one of the offers without trying any negotiation this time, we got our dream home at $8K below asking price.
BTW, we have a marking system on selecting our own home, to avoid any emotional impulse:
1. Location: walking distance to stores/banks/library/restaurants/beaches/schools/university/..., full mark is 40
2. Lot: good size, lots trees, private,..., full mark is 30
3. House: style (we like west coast, arts&crafts, MCM(mid century mordern)), open space, room and layout efficiency, repair/maintenance work amount required, ..., full mark is 30
only if a house can reach 85 or above, out of total 100 marks (ours is 90), plus it is in our price range, we will then consider it, and then evaluate the price.
We feel that buying a house this way, we will always love and appreciate it afterwards.
TOH (i.e. the other half of Al)
“It is going to be fascinating to watch what happens as Canada hits their downward stride just as the US is recovering.”
Maybe US is recovering…slooowly.
Latest US gdp went negative…poss double dip recession? have to wait & see
Unemployment rate went up last month.
LatestUS home sales slide 7.3% in December
just sayin
Excluding non VREB areas, I get SFH median of 495,000, average of 533,000. Final numbers could differ of course. Lots of Shawnigan Lake and Saltspring sales in the mix this month.
The final numbers are the ones I posted earlier in the day.
Median = 489,000
Average = 530,517
interesting Marko - perhaps one or two sold listings disappeared or something else.
There are a number of different software programs to account for a number of different occurrences such as realtor reporting listings 3 or 4 days late that occurred in the previous month, etc.
The raw data is close by never the final number.
That is the reason why the weekly stats and month end don't always add up.
@TOH
I like your ranking/marking system. It's very similar to my own when looking for a possible second/replacement house.
The canary is feeling light headed from licking all the litmus paper.
$489K? Step in the right direction.
Love the VREB news release. if you don't like the data then resort to anecdote
"But there are many stories within the market. This week, three houses sold in Sidney that were all newly listed and they sold for over asking price."
Mann adds that she's spoken to several local REALTORS® who have clients who want to buy, but they are looking for good houses with quality amenities. "One Member told me that he has several potential buyers, but they can't find anything they like."
"Sales Down but Prices Hold in Greater Victoria Real Estate Market"
-8% is not "prices hold" IMO. It will be very interesting to see how much of that proves to be month to month noise and how much is part of a steeper decline
I see they spent a whole two minutes making that graph.
December 2013???
on the second row
"Unusual average reflects value of collapsed sales this month"
Interesting.
Wow, all this analysis.
Remember, not so long ago, when we bought in E. Saanich and the only important stat was, what percentage could you afford to increase your offer?
No micro analysis of data like the present day.
"statistics are just like mini-skirts, they give you good ideas but hide the most important thing"
I hope the Times Colonist article is titled "Great news for Sidney, three homes sold above asking".
I like your method AL+TOH on finding a home.
Make a list of what you want in a home. Some of the things in my list would include:
1)location
2)lot size and topography
3)Type of building -detached, townhome, condo
4)building style - rancher, 2 storey
5)Age and condition - updating?
6)floor area - finished, unfinished
7)number of bedrooms and bathrooms
8)basement finishing
9)parking
10)immediate repairs roof, hot water tank, oil tank?
Then you and your significant other could each fill in the list and compare your likes and dislikes.
I like this approach to finding a home because you're getting away from the "price trap". The emphasis is now on what you and your spouse want - not what you have to bid to beat out some stranger that is also looking at the property. The conversation now changes from how much should we pay for the home so that no one outbids us to one where if you are outbid you can move on to another property as the home didn't have everything you wanted.
As for the evaluation part, you should have a very solid opinion as to the home's worth - if you stick to your list. Where you can go wrong in the evaluation is if you're bouncing around from Oak Bay to Sidney, from one storey to basment entry homes, etc..
If you're still stuck on the value you can call in a professional appraiser to value the property. I would make this one of the subject clauses in your offer to purchase. Make sure you explain to the appraiser that you want not just his opinion of the value, but the range of value the property has. In that way if you're a little reluctanct you might put your bid in at the low end. If you are hot to trot and can't live without the home, then you're going in at a high bid.
Always remembering that with this slow market, there will always be a better deal coming your way.
And if anyone from HGTV is reading, I'm available for interviews later this month. Mike Holmes versus the Nerdy Appraiser. The season finality is that we both strip down to our gonches and wrestle Sarah Richardson in a pit of ready mix stucco.
"statistics are just like mini-skirts, they give you good ideas but hide the most important thing"
They're not called mini-skirts anymore.
They're called Greyhounds.
Because they're only an inch away from the Hare.
Ha ha love the 27% drop miscalculation.
Although there tends to be seasonal fluctuations in prices, I find the six-month average to be a good indicator of the trend.
The data ... According to VREB, at the end of January 2013 the six-month average was $593,582 while January's average was $530,517. Compared with a year earlier, in January 2012 the the six-month average was $608,827 while January 2012's average was $581,519.
The results ...Over the past year, the six-month average has dropped 2.5%($15,245) from $608,827 to $593,582. The monthly average has dropped 8.8% ($51,002) $581,519 to $530,517. More interesting is the difference between the monthly average and the six-month average for that month: in January 2012, there was a 4.5% ($27,308) difference while in January 2013, there was a 10.6% ($63,065) difference. This clearly shows the direction of the trend ...
Is it normal for the chart to compare the previous month's data instead of the year over year change? I seem to recall that previous charts showed both.
SFD Unit Sales Victoria for Jan. (VREB)
2006 - 36
2007 - 31
2008 - 31
2009 - 17
2010 - 25
2011 - 18
2012 - 16
The new mortgage rule changes started in July and some were brought in as recently as the end of October.
One of the effects of these changes was to significantly decrease the number of first-time buyers. This has resulted in pushing the average price higher than it would have been if no mortgage rule changes had been made.
The average price over the last 6 months has been misleading. It appears that the temporary average price boosting effect of the new mortgage rules is wearing off.
Many other indicators point to prices decreasing over the last 6 months. The Teranet index shows this. We have seen listings as low as 36% below assessment recently. That doesn't happen in a stable or flat market.
The direction that prices are moving is down. The average price for December makes this clear.
SFD Median Price for Victoria in Jan (VREB):
2006 - 440K
2007 - 477K
2008 - 550K
2009 - 425K
2010 - 647K
2011 - 582K
2012 - 486K
This is fun!
For what they're worth, here are some of my stats.
SFH: Min 3beds,2baths in Vic OB ESQ SE & SW priced between $375K & $775K.
AVG Prices
2010 From Mid Jul-end Dec $562K
2011 $561K
2012 $547K
2011 3Jan-30Jan $565K
2012 2Jan-29Jan $556K
2013 31Dec-27Jan $529K
... most of the above applys to first time ...
Applys?
The season finality ...
Finality?
515 Nelson St (MLS 318827) is assessed at $458K, but asking $700K. Granted that the owner gave the house had a big makeover, but who will pay $700K for a house with a 6'4'' lower floor in this Esquimalt neighbourhood?
Is is preferable to buy a better house is a worse neighbourhood, or a worse house in a better neighbourhood?
@Introvert
"Applys" - what you order at the pub to go with your fifth beer.
The DOW closed at over 14000 today ....hasn't been that since Oct 2007.
Toronto still has along way to go before reaching the over 15000 loftiness of 2008.
Looks at this graphic
http://www.vreb.org/pdf/vrebgap.pdf
Powerful.
I am going to have a beer.
Here are some house re-sales in the Victoria Core that sold this January ranked by previous sale date.
$490,000 May, 2010 Now- $447,500
$667,500 Apr. 2010 Now -$597,500
$533,000 Jun. 2009 Now -$540,000
$495,000 Sep. 2008 Now -$540,000
$632,500 Aug. 2008 Now -$642,500
$550,000 Jul. 2008 Now -$550,000
$460,500 Apr. 2008 Now -$405,000
$500,000 Sep. 2007 Now -$445,000
$590,000 Feb. 2007 Now -$593,000
$690,000 Feb. 2007 Now -$670,000
$460,000 Jun. 2006 Now -$522,000
$448,000 May. 2005 Now -$555,000
That should put a little flesh on the bones of those stats. Except for a brief time in 2009, our market prices are back to the first and second quarters of 2007. It's a big hurdle to roll back into 2006 and 2005. That's when CMHC threw gasoline on our already burning real estate market and prices exploded by a hundred grand.
But, if you want sales activity and prosperity to return to the real estate market that's the bullit this market has to take.
Sorry about the typos working on the small screen today without spell check. Nice to see Intronerd still lurking as our blog breaker.
Introvert can't argue about prices holding steady anymore, so he has to really focus on typos now. So throw him a bone once in a whyle.
Sorry about the typos working on the small screen today without spell check.
You're blaming "applys" on lack of spell check? Hmmm.
... or just use Firefox for your Web browser, as it includes a spell checker and can provide suggested corrected words.
Now gram mar is uh hole udder story.
Introvert can't argue about prices holding steady anymore, so he has to really focus on typos now.
Prices declined. Boy, I did not see this coming! I haven't been saying that prices would probably continue to gently decline at all!
Nothing gentle about that price drop. Did you see the graph for the past two months?
http://www.vreb.org/pdf/vrebgap.pdf
Does anyone know the original asking price and final sale price of 1144 Summit Ave (MLS 315174)? I believe that is sold at the end of December 2012.
that's the bullit
JJ, I think we're learning of the disturbing degree to which you rely upon spell check.
Nothing gentle about that price drop. Did you see the graph for the past two months?
It's two months in the dead of winter. Try not to wet yourself.
Not saying the six-month averages won't start to look bad at some point, but we're not there yet.
"There's a party going on right here, a celebration that'll last throughout the..."
Did anyone actually buy a property for 25% off peak prices?
It's two months in the dead of winter. Try not to wet yourself.
Different from the previous winter months. Hmmmmm.
Instead of incontinence I will have another beer - cheers to you, introvert!
Intovert: "It's two months in the dead of winter."
2 month median price (Nov-Jan) change Victoria.
2006/07 +9.1%
2007/08 +7.8%
2008/09 -1.0%
2009/10 +7.8%
2010/11 +13.2%
2011/12 +7.2%
2012/13 -14.0%
You got the "dead" part right.
and cheers to you, reasonfirst!
Intronerd, the amount of time you spend going through my posts looking for typos, and your thoughtless negativity to the views of others says a lot about the emptiness in your life. Here's a phrase you must hear daily at "your" home...
"Nurse, he's out again!"
13.2 months of inventory - that is really high, right?
"13.2 months of inventory" no wonder with sellers refusing offers 1% under asking...I would never offer asking price personally. It's like a game of bridge for crying out loud...counter at .5% under asking and be done with the sale idiots!
I will offer 20% under 2013 appraisal if the house was in good, updated condition That would buffer me today for what is in the pipeline (I will forgive the extra 5% due to low financing right now).
Monthly data is _extremely_ volatile and it is worse in the winter months because of low sales.
The price in January does appear to be remarkable but I wouldn't be at all surprised to see an increase again this month.
The trend is what matters, and it is unmistakably down, and almost certainly accelerating.
We don't know the circumstances, Dasmo.
The builder could already be priced below market and he knows that he doesn't have to take anything but a full price offer.
And if the developer has a unique product he can control that market segment until competitors move in.
An example of this was assited living facilities where you bought the condomiminium and paid a monthly fee for nursing and food services. At first, there was enough of a demand for these buildings that the complexes sold out quickly and at full price. But as more developers moved into this market segment, that market became saturated and prices dropped steeply.
***Warning - the above post has not been spell checked. If this offends you - please take one of the blue pills, the nurse has given you, before reading.
Sometimes a chart can make things clearer:
https://docs.google.com/spreadsheet/ccc?key=0Aj_0HTYHq-YsdExWM0JrVVpnT0VsZGhkcDBQV2FXOUE&usp=sharing
[Feel free to reuse and distribute]
The average in January 2010 was $644,678 and is now 17.71% lower ($114,161) at $530,517 in January 2013.
Love the graph, DavidL. Makes it quite clear.
When I see the average price above the median, my thoughts are that prospective purchasers are optimistic about the future of real estate prices.
And when I see the average below the median, I think of the prospective purchasers receiving big price concessions. The real estate vultures with their talons displayed and ready to rip into the soft under belly of those vendors that are struggling to sell or have abandoned their properties.
If we are unfortunate enough to slide into a "foreclosure market", I believe we would see the average price well below the median for quite awhile.
Sure, there will be those that refuse to sell at these lower prices, but these vendors will be of little consequence in the marketplace. I think for that to happen, we'll need to see a lot more inventory. The market would have to shift from a demand-driven downturn to a supply-driven rout.
-Damn, almost wrote route instead of rout. Had a mental picture of little puffs of smoke coming out of someone's ears.
@introvert
"that's the bullit"
"JJ, I think we're learning of the disturbing degree to which you rely upon spell check."
What is disturbing, Introvert, is your pathological fixation on JJ and grammar. He is playing you for the fool you are.
@jj
"Intronerd, the amount of time you spend going through my posts looking for typos, and your thoughtless negativity to the views of others says a lot about the emptiness in your life. Here's a phrase you must hear daily at "your" home...
"Nurse, he's out again!"
Missed yor post before mine, JJ. You hit the nail on the head. Introvert, get some help.
Marko do you have the residential inventory for December 2012 and January 2013?
That MOI is on the high side. You can spin it any way you want, Victoria is correcting. Congratulations, I guess!
The lower number of sales overall must be difficult for the RE agents. Maybe not all, but I wonder if the numbers in this field will decline.
I think the spring market will be down a bit, but we may also see people starting to buy up some of the MOI if there are price drops in the more core areas.
Rates are low and if prices fall some folks will have been waiting for this :)
With last year’s mortgage changes, it seems it has affected the first time home buyers these days. What about “house flippers”? How much of an impact did they have on the market during the last decade? I’m still seeing lots of listings with “newly renovated”, but I am guessing this sector of the housing market is slowing down as well. To have bought at such high prices, even in the last few years and spent money renovating (especially with the price of materials/appliances etc., being so high these days), it must be difficult making this a worthwhile venture. So, has this seemingly never-ending river of opportunity finally dried up?
"So, has this seemingly never-ending river of opportunity finally dried up?"
I like when a listing says "no expense has been spared" and it's the price is really high.
What they really mean is "no expense of your money has been spared".
The lower number of sales overall must be difficult for the RE agents. Maybe not all, but I wonder if the numbers in this field will decline.
Marko posted something a while back on how much the number of agents has already decreased.
I think the spring market will be down a bit, but we may also see people starting to buy up some of the MOI if there are price drops in the more core areas.
Maybe. But I think we're a little bit off from that point yet. In Seattle the inventory peaked about a year after prices started declining seriously and then decreased over the following 3 years while prices declined as well. They had a somewhat extended decline because price drops were stopped in 2009 through government intervention.
I think this year will be the peak inventory, and largest price drops. Inventory will start to decrease after that but prices will continue to slide for a couple more years.
Marko do you have the residential inventory for December 2012 and January 2013?
Posted on VV.
The lower number of sales overall must be difficult for the RE agents. Maybe not all, but I wonder if the numbers in this field will decline.
It isn't just the lower volume. You also have new innovative business models that are growing (very slowly, but growing) every year taking even more money off; therefore, less to go around the table.
We've dropped about 65 realtors from a year ago. Currently sitting at 1239 but I think we'll be under 1200 come fall.
Lots of deals are collapsing and if you do 3-5 deals a year and one collapses after you've put in a lot of work it stings.
Thanks.
"I think this year will be the peak inventory, and largest price drops. Inventory will start to decrease after that but prices will continue to slide for a couple more years."
In the US, virutally every city hit bottom at the same time - December 2011. The same will happen in Canada. It doesn't matter that Victoria started to decline before other major cities. Victoria will hit bottom when Canada hits bottom.
I think that we will see the largest price drops in Victoria this year and in 2014. With a price to income ratio of 8.2 right now, prices have a long way to decline before they hit any sort of income support. That was proven with the US crash and many other national housing market crashes throughout the world.
After the next 2 years of big price decreases, I think Victoria will continue to decline for another 5 to 7 years, again, following Canada down until Canada reaches bottom.
@ reasonfirst
Can you find the months that greater Victoria peaked in terms of average price and median price?
It will be interesting to compare the data from those months to the data from January 2013 and each month going forward.
Houses are not 8.2 x income in the CRD. Maybe yours mind you....
Peak price in Victoria for SFHs was somewhere around
Jan 2010
Median 595,000
Average $644,000
to
May 2010
Median 594,000
Average 646,000
If you smooth the data you see that May 2010 is a better candidate. Even though Jan was $1000 higher on the median, it was an outlier and prices continued to generally climb after that point until May
Average SFH price to average HH income is actually about 8.
Although the inventory to sales ratio is high, that is because sales are slow, not because the inventory is unusually large. So to those who have been looking for while the inventory is beginning to look pretty stale, which doesn't help sales.
If vendors lower prices, that may help, but then it only confirms that it's a falling market, so why buy now?
A third negative factor is that now it is generally recognized that the market is falling people who want to trade will be reluctant to buy before they have sold, the opposite of the tendency in a rising market. This can only slow sales.
Not a happy time to sell, or a particularly promising time to buy, which seems to explain why property markets take so long to adjust downward.
Although the inventory to sales ratio is high, that is because sales are slow, not because the inventory is unusually large
It's both. January 2013 inventory is higher than at any time since the start of available data (1996). Of course if we adjust for population then inventory in some previous years may have been higher.
I don't think the market is as bad as the numbers indicate. Showings are quite strong on most of my listings and I've had three accepted offers in the last few days.
The severe slow down over the last 6 months has created a small amount of pent-up demand and I think we'll see sales numbers improve. SFH Average/Median will bounce back in the short term; I don't think we'll see a 6 months rolling average at January levels anytime soon.
As for condos, we'll see, MLS numbers were poor but pre-sales had an extremely strong month.
The current numbers are catastrophic. I would expect them to moderate to just "very bad" as the spring market develops.
Correct me if I'm wrong but isn't the SFH median around 500k? Median family income is around 78k so we are closer to 6.5x...
The last available year for household income is 2010, where the BC median was $52,800 and the Victoria median $53,500.
Where did you get $78,000?
The current numbers are catastrophic.
Which numbers, exactly, are catastrophic? And catastrophic compared to what?
Which numbers, exactly, are catastrophic? And catastrophic compared to what?
13 is extremely high for months of inventory. At this level prices drop quickly as we saw in 2008/09.
MOI will come down in the spring, but it will have to come down drastically to prevent a strong decline in prices.
Statscan median family income
If you are making 53k a year, You need to get the wife a job and yourself a raise...Forget about a SFH, first things first.
That link doesn't work. What table?
nm found it. That is family income, different than household income which will include unattached individuals, and is the usual definition when talking about price/income.
This definition of family is closer to the "economic family" I used a couple articles back.
"Families are comprised of: 1) couples (married or common-law, including same-sex couples) living in the same dwelling with or without children, and 2) single parents (male or female) living with one or more children. Persons who are not matched to a family become persons not in census families. They may be living alone, with a family to whom they are related, with a family to whom they are unrelated or with other persons not in census families. Beginning in 2001, same-sex couples reporting as couples are counted as couple families."
RBC conducts one of the most well known affordability reports and they have this to say on the subject on the of income:
"The meas- ures use household income rather than family in- come to account for the growing number of unat- tached individuals in the housing market"
"If you are making 53k a year, You need to get the wife a job and yourself a raise...Forget about a SFH, first things first."
Reminds me of the question: Why do we have so many homeless people? Why don't they just get jobs like the rest of us?
I ran the numbers in the 90's and you needed 60k back then to buy a house. I wasn't making that so I asked for a 100% raise. I didn't get it...right away. It took about three years to get there. My point is you have to look at the financial reality of your situation and deal with it. Owning a SFH is not some gifted right. You have to make your own way in this world....But you go ahead and keep hoping for your 53% crash in prices...
And by the way I'm 100% with helping the poor. Shelter and food should always be there for those in need....
I do agree with Garth Turner's words of "We are living in a day and age when real estate is seen to be a right, not a privilege." "And the danger is that when real-estate-entitlement culture takes hold, all of a sudden just owning a home isn't enough. It becomes competition."
The bottom line is that house ownership is and will always be a privilege for anyone.
The root causes of homelessness don't appear voluntary to me. Mental illness and addictions are health conditions.
Can't say that comparing someone with a disability to someone without seems reasonable or fair to me.
I agree, shelter is a basic human right which I'm happy to pay taxes towards for those that need assistance.
Home ownership is not the same thing at all.
My point is people don't make more money for lack of wanting.
Owning a SFH is not some gifted right.
The reason that we have a housing bubble is that the government is trying to "help" people to buy.
I would like nothing more than for every government program which promotes home ownership to be eliminated.
If you are able bodied and unsatisfied with your income then you can do something about it. How do you think many immigrants coming here do so well so quickly?
If you have a goal that requires you to earn more you can:
1. cut all your unecessary spending first and reduce costs for basic needs
2. get a second job
3. take steps to otherwise increase your income including retraining if necessary
I would suggest that if you want to buy a house and a couple and only one is working and making $53 000 you might need to do all three with an emphasis on the first because it is within your immediate control.
In my view, people around me do not save/make more for lack of application of these strategies.
The help was only fuel to the fire. It started before all that. But I agree. 25 should be max. I'm ok with 5% down though...
The help was only fuel to the fire. It started before all that.
Before CMHC was created 60 years or so ago? I don't think so.
How do you think many immigrants coming here do so well so quickly?
Not the norm.
"Native-born Canadians earn an average total income of $64,239 compared to $48,488 for immigrants. And unemployment for Canadian immigrants was 6.6% -nearly twice of what it was for native-born Canadians (3.5%)."
As for the "just pull yourself up by your bootstraps" lecture, the reality is that our median household income is about $55,000. Our overall median dwelling price is about $400,000. The math doesn't work out well.
Also working two jobs so you can buy a SFH is probably not the best course of action right now.
The help was only fuel to the fire. It started before all that.
It didn't. The biggest impact was the change to allow 5% down payments. That happened in 1999. Price ceiling for CMHC insurance was removed in 2003. The short-lived change to longer amortizations had comparatively little effect.
Sorry but the public didn't have a clue about that stuff. I didn't even know about the 5% down until after I bought. It was simply that it was cheaper to buy than rent after rates reached 6% and lower...
Who cares what the norm is? If the norm is not helping you reach your goals - stop acting normal.
If you are making $55 000 you can borrow approx $250 000 at 3%. If you would like to own a home you need to move from Victoria, go in with someone else, or have a suite. The more you save for the down payment the better it is.
Now probably is the time to work two jobs to save up for a down payment and qualify for a mortgage if prices drop further.
It is not a lecture. It is just reality for lots of folks. It was for me too when we started out. We did all the things I suggested.
This blog focusses a lot on prices but this is only one part of the equation in buying a house. Saving for a down payment is another, as is qualifying for the loan. These factors are much more controllable than prices.
"If you are able bodied and unsatisfied with your income then you can do something about it. How do you think many immigrants coming here do so well so quickly?"
The job situation here is dismal. Quit your job and try to find a higher paying one. Report back here with your progress.
Sorry but the public didn't have a clue about that stuff.
Nonsense. The mortgage broker and bank will be happy to inform them. The reality is a person with $20,000 could borrow $100,000 before, and (GDS/TDS permitting) borrow $400,000 after. Of course in reality the jump isn't that massive because people still need their income to qualify, but it pulled in a huge number of buyers from the future.
Then when the price ceilings were removed in 2003 (I think it was around $400,000 in BC), it removed the last barrier to pushing prices to the moon.
Who cares what the norm is? If the norm is not helping you reach your goals - stop acting normal.
The norm is the only thing that matters for the market. The motivational "rah rah you can do better for yourself" is nice and all but doesn't change the fact that the income of people here as a whole is what it is and prices are generally out of reach to people with that income. That doesn't work with an ownership rate of 70%.
This blog focusses a lot on prices but this is only one part of the equation in buying a house. Saving for a down payment is another, as is qualifying for the loan. These factors are much more controllable than prices.
A bad investment is a bad investment regardless of whether you can afford it.
I really doubt a large number of HHV readers are actually priced out of the market. Likely most people here could buy places but choose not to.
Victoria median household income in 2010 was $77,820 according to Stats Can. , not $53,500. Or did someone else already point that out.
Someone pointed that out - I think there are two measures. Once accounts for individual and the other for family income.
If you make $77,000 you can borrow about $325,000. Gets you to median dwelling price with 20% down.
"A bad investment is a bad investment regardless of whether you can afford it."
It takes time to build up a down payment and income. Unless you are saying a home is never a good idea it might be a good idea to start on this now.
No that's median family income, which excludes singles.
"The biggest impact was the change to allow 5% down payments. That happened in 1999. Price ceiling for CMHC insurance was removed in 2003"
Don't forget the RRSP home buyer's plan, which was introduced in 1992 to try to put the brakes on the Toronto bust IMHO. A terrible program which has resulted in overpriced houses and underfunded retirements.
"The job situation here is dismal. Quit your job and try to find a higher paying one. Report back here with your progress."
Yes, well, did that and I'm happy to report a 100% increase in income over a seven year period.
We also purchased prior to this increase when we were below median and did so by saving as much as possible, working additional jobs and having rental income.
As for homeless folks, no comparison. I wish we would do more for root cause treatment and I'm willing to may more taxes for this.
"We also purchased prior to this increase when we were below median and did so by saving as much as possible, working additional jobs and having rental income."
The new Canadian dream.
Yes, it was a dream come true for us. We felt both fortunate and grateful.
I'm going to go out and get several jobs so that I can have the pride associated to home ownership.
I mean what are all these people complaining about? When I bought (before prices doubled) prices were expensive but I bought anyway. Now that I have done so well with my investment, I'm going to go on blogs and tell people what a good idea it is to buy into the market.
But wait, isn't the market different now? Couldn't you be counselling people to buy into the biggest nationwide bubble in Canadian history?
No, it is a good time to buy.
It takes time to build up a down payment and income. Unless you are saying a home is never a good idea it might be a good idea to start on this now.
I don't see how it has anything to do with real estate.
It's a good idea to start saving and increasing your income as early as possible.
First of all, I am not counselling you to buy.
Second, I did not buy prior to prices doubling.
Thirdly, I have bought recently - in fact, if you will remember I purchased last year.
Leo - if you are looking at affordability income and savings rate are as important as prices.
Also, I've never purchased for the pride of home ownership. I've purchased based on analysis that works for us. I've posted this numerous times.
It is kind of disheartening to have someone dismiss real life experience and twist things to fit their views. Might be best to stop commenting on my posts because they really do not fit your version of what must be true or advisable.
Add interest rates into the important factors too.
Your views don't reflect reality any more. Welcome to the new normal. Where real estate is a losing game.
Uh, just in case anyone reads this post again, the 27% number they came up with seems to be [1-(294-78)/294]*100% = 26.5%
Dave3
Info: Can you find the months that greater Victoria peaked in terms of average price and median price?
Victoria SFD Average Peaked Dec/09 @ 711K
Victoria SFD Median Peaked Dec/09 @ 674K
(assuming no typos on may part and going back tyo Jan/06)
Introovert - please find typos in my last entry.
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