| Nov 2014 |
Nov
2013
| ||||
| Wk 1 | Wk 2 | Wk 3 | Wk 4 | ||
| Unconditional Sales | 137 |
234
| 357 |
412
| |
| New Listings | 195 | 366 | 516 |
698
| |
| Active Listings | 3722 | 3685 | 3639 |
4017
| |
| Sales to New Listings |
70%
| 64% | 69% |
59%
| |
| Sales Projection | -- | 468 | 476 | ||
| Months of Inventory |
9.8
| ||||
Wednesday, November 26, 2014
Nov 25 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.
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225 comments:
«Oldest ‹Older 201 – 225 of 225The number one attribute people look for in a property is......
Location
Not location, location, location. That was invented by a real estate agent with a speech impediment who could not find any other redeeming features about the property she was flogging.
Of course location will mean different things to people. Just as some of us are tall dark and handsome and others are well - Dasmo. People have different preferences and that location is specific to you. Consequently, if you want to be far enough away from the mortgage free buggy pushers with their life wrapped up in plastic bags and closer to the overly mortgaged buggy pushers with their bundles wrapped in huggies then Hillside or Oaklands might be your location.
And that's where your house hunt would typically start, in the location you've chosen. And within that location you can go for a corner lot along a busy street that will have a lower land cost to a more costly cul-de-sac lot with an expansive back yard and privacy or anything in between. Your likely looking at say a 2 or 3 kilometer radius comprising a couple thousand homes. You have to be realistic about location. I had one lady only wanting to buy a turn-of-the-century character home in Broadmead. It just ain't gonna happen.
Anyone want to guess what the next highest rated attribute is after location?
Location obviously takes up three...
Ahhh No.
Despite what the ladies have told you throughout your life -it's size.
The bigger the better. At some point it's too big - but for most of us that only exists in our imagination.
The typical Canadian home has some 2,100 square feet with enough wall space to mount a 72 inch wide screen TV.
Anymore and you're over compensating for something else. Size is related to width. Because if you want more square footage you'll need a wider wallet.
For us, there are three main criteria and a point system (total full mark of 100 points) which we used when looking for a house to buy for ourselves:
- Location: quiet and close (walking distance) to shops/banks/restaurants/libraries/bus, full mark is 40 points;
- Lot: needs to be good size, private, treed, some sunshine, full mark is 30 points;
- House: nice style, good and usable size, new or near new condition, full mark is 30 points.
Only if the total of all above is more than 85 points, will we look into its pricing/market value - otherwise, we just walk away.
Sorry JJ my timing was off. That was meant to be said before your follow up ;-)
Actually that is one of the more original ideas of using a point scale that I've heard.
I actually use a percentage scale at increments of 5%.
I would take a base price for a mid block lot then add or subtract depending if the property I'm looking is superior or inferior to the mid-block lot.
As an example. A pie shaped cul-de-sac would be superior and get a 5% increase of the base value. A corner lot in a city would get a negative 5%. If the site had a south westerly orientation that adds 5% again.
Waterfront and views get a little trickery as they get a larger percentage increase of the base or upland lot value depending on how many degrees of the view are unobstructed and the site's orientation. The highest value for waterfront would be for south westerly facing low bank water front that you can walk out onto. Such as the kind you find in South Oak Bay.
The point scale is a good one because it's simpler and personal to yourself. You should expand that into a check list as I think a lot of prospective buyers would find it useful.
Goes to show how different our approaches are. When I bought in 2003 I was very specific in my location. VicWest. Vicwest because I could walk into town, the water is everywhere and it was the nicest shitty neighbourhood in the world. I was just extending the notion of buy the crappiest house on the nicest street into the crappiest neighbourhood in the nicest city. I was looking for a small house (under 2000) and a fixer upper. The size because it's big enough and fixing up / Reno costs would be less. A fixer upper so it would be cheap and I'm handy plus have cash flow. Not on a busy street. At the time I was looking for a detached house under 180. Although there were option in that zone it was too harsh for me. So I stepped it up to around 200. Also, it had to be well built character home. Found it for 220 and bought it for 192.5.
I used no identified scale. I do have internalized criteria:
1. Location - must be walkable to shops and schools
2. South facing back yard
3. House size, esthetics, condition, configuration (suits family size, rental income, future mobility issues...)
I evaluate all the factors and determine what I would consider to be a good price for the property.
On our last place we paid lower than neighbourhood values due to condition which has meant we spent more on renovations.
Renovations are tricky because they can be more expensive than expected and we save and don't borrow to do them so it has taken three years to finish. Wouldn't be worth it for everyone.
Sounds like you went for location first, then house size to fit your budget.
There is reason to the saying...
"buy the worst house on the best street"
As it's the underlying land value that appreciates faster than the cost of construction in a rising market.
In contrast, that saying wouldn't be such a good guide in a declining or flat market as the underlying land value will decline as construction costs moderate lower. In a falling market you're looking at preserving wealth and that may mean a bigger or better house on a smaller less expensive lot or street.
Back when you purchased your home that saying led you make a good buying decision.
If the city is upgrading your neighborhood's infrastructure with sidewalks, street lights etc that should make your neighborhood more desirable than those that have not been upgraded.
But just because the neighborhood has gone up in value doesn't necessarily mean that it has become more desirable than other hoods that have also gone up in value. The city has to spend a lot of money before people's preferences can be changed.
The road improvements along Craigflower and Admirals are an example of what has to be done to change a neighborhood. Very expensive public works projects that the city can pay for with increased property taxes.
Don't forget the bridge! And also private developments that improve values like the roundhouse and Docside Green etc.It's a risk taken as illustrated with the build outs of these improvements. I thought they would all be done by now. Probably another 5-10 years to be finished. At least I paid the right price for those risks. Unlike those that paid top dollar for condos in the Dockside dev sold on the fantasy of the finished community....
The next one is building style. If you need a suite - then a one storey home isn't going to be on your short list. Neither will a character home with a low 5 ot 6 feet ceiling in the lowest level. You can spend $150,000 or more to raise the home and put a suite in the lower level but that may be economically unwise.
When I use the term basement I'm referring to the floor under the main living area. The main living area contains the kitchen, living or family room. In other words, the floor you mainly live on. That seems to be simple to most people. Yet you can have a 2 level home with a basement or you could have a home with a basement and a sub basement underneath. Totally different market for these two styles of homes.
And it's the size of your main living level that is most important. You can have two homes with basements with the same square footage, but the one with the larger main floor area will cost more.
Generally speaking the public work project has to be underway or completed for the public to pay higher prices.
Some speculators will gamble that the public works project won't be put on hold by the next administration looking at the books. And that's good for them...
to the bold goes the gold.
Although the blue bridge has already cost the head of one mayor.
As it should have!
“If you need a suite - then a one storey home isn't going to be on your short list.”
I beg to disagree. I have lived in two houses with a suite addition on the back and several with a suite underneath. The ones above or underneath were misery. No matter how much insulation or sound proofing people do between floors, houses are never designed properly to begin with for up/down living.
Dockside Green was an experiment that went off track. They spent too much money selling the sizzle rather than putting the money into the building.
Lots of unusual problems.
Like the low energy lighting. The bulbs cost a lot of money each and in order for them to be cost efficient and last longer they have to remain on. Turning them on and off dramatically reduces their life. You therefore have to spend more on annual energy in order to save on replacing the bulbs.
Eventually the waste water system will have to be replaced. And I suspect the strata owners will just elect to hook up to the regular sewer then.
A Smart car in the car pool. Do you replace it when it costs more to operate each year or just don't bother getting another one.
And how about the owners that repaint their suites with normal paint.
The building was LEED rated when it was completed. Would it meet those same guidelines today?
Then there was the re-sale value of the units that fell precipitously from the original prices. There is a market for environmentally conscious people, but it's a small market that is quickly saturated.
Makes more sense to have the government and commercial buildings built as LEED rather than condos. As most of us are dirty little energy hogs.
A side note is our soon to be doubling electricity costs because of corrupt business practices of the crown corporation. I still think those directors should be placed in wooden stocks at Bastion Square and pelted by the public with tomatoes.
Higher electricity just means more people will be burning wood in their fireplaces and polluting the air in Victoria.
What are you really disagreeing with Chris. The need for a suite or that the majority of homes have the suites in the basement?
I've seen houses built out of railroad cars, others than are completely underground and others that are a sphere. Anything you can imagine can usually be built or modified as a home including nuclear silos. Way too many exceptions to list from the 99 percent of homes that have a suite in the basement.
But an interesting point about additions to homes. Especially if they are just slapped onto the back of a house to make a family room or suite. The addition limits the re-sale market and disrupts the ease of movement within the floor plan layout. You get crazy things happening like a family room accessed through the master bedroom.
Most buyers easily accept a suite in the basement that they can choose to rent or not without having to remove the kitchen and renovate the basement area.
Homes with additions will almost certainly sell for less than homes purposely built with the same square footage.
Buy anything and if you hold it long enough it will likely be profitable at the end.
Cool! I think I'll do that with my house.
If an Economics professor can get it wrong - I certainly can too but in half the time it took him.
Economics isn't a science like biology. Some principles of economics are inarguable, like most aspects of supply and demand. However, many areas of economics are ambiguous, which leads to disagreements among economists. Biologists, on the other hand, rarely argue.
to the bold goes the gold.
Sometimes, yes. And sometimes the bold lose everything.
-----------
Criteria for buying a house? We walked through maybe 20 or 30 homes, in various neighbourhoods, before we found one that we loved. The more houses we saw, the more precisely we were able to zero in on what would be close to ideal.
By the way, I did renew my mortgage for another five years (fixed) at 2.99%.
If the market is going to punish me for borrowing all this money, it's not going to be in the next five years.
"If you can make one heap of all your winnings
And risk it all on one turn of pitch-and-toss,
And lose, and start again at your beginnings
And never breath a word about your loss....Yours is the Earth and everything that's in it,
And - which is more - you'll be a Man, my son!"
"Randy LeClair believes, “Looking at the longer-term, say 3 to 5 years out, interest rates will continue their trend in a downward direction. The 30-year Government of Canada bond (now around 5.00%) will trade in a range between 3.0% and 4.0%, similar to where it was in the period of 1945 to 1958. This will happen primarily of a supply-demand imbalance. The supply of outstanding bonds is limited (or even declining), while the demand for these securities in sharply increasing due to the aging Baby Boomer generation. It is really the reverse of what happened in the 1960’s, 1970’s and 1980’s." I wonder if one could get a 10 year mortgage @ 2.99% in a few years?
Monday, December 15, 2014 8:20am
MTD December
2014 2013
Net Unconditional Sales: 198 355
New Listings: 271 437
Active Listings: 3,406 3,554
Please Note
Left Column: stats so far this month
Right Column: stats for the entire month from last year
After location, size and style, most prospective purchasers consider age and condition.
Age and condition can be tricky in that a home built in 2004 may be as desirable as a fully renovated home constructed in the 1970's. Determining depreciation or diminished utility is a course all in itself. Better just to keep things easy and wrap both age and condition into one based on your personal observations. Simply what you see is what you get.
This is where you look at homes that need work and get estimates to repair or do the work yourself.
You see a home that immediately needs a roof, furnace, carpets etc. Repairs you have to allow for in your price. Then depending on if the market favors buyers or sellers you may be able to add for your time and inconvenience in performing these necessary repairs. All of which would be relative to what the home would be worth after the repairs are completed.
Like I said this can get tricky - very fast.
Probably why most prospective purchasers shy away from properties that will need repairs in less than 5 years. And why buyers get and real estate salesman promote building inspections. The inspections should identify possible immediate surprises and also get the salesman off the hook for any perceived misrepresentation of the property.
The savvy flipper knows that most buyers are reluctant to buy fixer uppers and in the past exploited this segment of the market buying real estate's ugly Bettys.
CONDO or a HOUSE?
Does the condo market have an influence on the detached home market?
It does and it doesn't.
There is a crossover area where a prospective purchaser would weigh the choices of a 1,000 square foot condo versus a 1,000 square foot home.
The prospective buyer has already selected the area, the size and now is about to trade the type of property against the age/condition.
The choice is now between a newer condo or an older half duplex or starter home needing TLC.
As the price of newish condos comes down that should have an affect on starter homes. And in turn that should have an affect on buyers farther up the food chain.
More so when the buyers of condos and starter homes are impoverished youngsters rather than affluent retirees. And since the wave of retirees to Victoria is similar to a toddler's fart in a wadding pool, the longer the condo glut last the more likely starter homes will come down in price.
In summation, a glut in condos will lead to lower prices for detached homes.
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