August 22 Market Update

Weekly stats update courtesy of the VREB via Marko Juras.

August 2016
Aug
 2015
Wk 1 Wk 2 Wk 3 Wk 4
Unconditional Sales 188  396 599
741
New Listings 265 571 811
952
Active Listings 2133 2174 2139
3688
Sales to New Listings  71% 69% 74%
78%
Sales Projection 896 889
Months of Inventory

4.98

The bump in inventory last week seems to have been temporary.

Dasmo says “this market IS mostly about home owners not selling. It seems the crazy low inventory has less to do with insane sales numbers than low listings…. The recent price gains would feel more solid if the low inventory was because of huge sales numbers but it’s not.”

However can’t really say the data agrees.   Sales are at record highs and that’s the main reason we’re in this market.   New listings are middle of the road.  Below recent years but above the levels of earlier in the 2000s and late 1990s.

newlistings

Last time it took a good 5 years of hot market for the new listings really to pick up.  Sooo…  Maybe 2020?

Property Disclosure Statements

The property disclosure statement is a form that allows the seller of a house a convenient way to disclose any latent defects on the property that they know about.  It’s sold as a way for sellers to be clear about what they’ve disclosed about a property, and for buyers to know more about a property’s history.

pds

In reality, it was invented by the BC Real Estate Association in 1992 in order to shift some risk off of the agents on to the seller.  That’s why your realtor will probably try to push you into it by saying it’s mandatory part of an MLS listing, which it is.  However it doesn’t need to contain any actual information so you are free to cross out the questions instead of answering them.

The other argument you might hear is that the PDS can protect the seller by eliminating claims of misrepresentation by the buyer after the sale but this is nonsense.  The buyer can still claim misrepresentation based on something that was said to them with or without a PDS in place.

The reason property disclosure statements are dangerous for the seller is because if they are included in the contract they survive the doctrine of merger.  In other words, a seller can be sued for what they put in the PDS even after a sale completes because those statements can act as a warranty.   So if you guessed on the PDS that the roof is 10 years old when it’s actually 20, the buyer could come back to you after they take possession and find a receipt for the roof in a floor vent.  There’s nothing but downside for the seller in filling these things out.

And for the buyers?  Well it’s no real advantage either.   You can’t rely on the statements because they’re worded as “are you aware” and in the present tense.  So if there was a flood 5 years ago but it was repaired, they can say no to the question of whether they are aware of any water damage because there is none at this instant.

In short:  If you’re going to fill out the PDS be extremely judicious about it.  Limit your disclosure to latent defects (those that can’t easily be found through inspection).  Everything else can come back to bite you.  If you’re buying, don’t believe anything you read on the property disclosure statement and have everything checked yourself.

Edit:  If you want the opposite opinion you can read this article.  However outside of some odd analogies that PDS is like an air bag, I don’t see any good reason why it protects a seller.  As they say, the seller won in court when sued, but would have not even been sued if they didn’t fill out the PDS.

August 15 Market Update

Weekly stats update courtesy of the VREB via Marko Juras.

August 2016
Aug
 2015
Wk 1 Wk 2 Wk 3 Wk 4
Unconditional Sales 188  396
741
New Listings 265 571
952
Active Listings 2133 2174
3688
Sales to New Listings  71% 69%
78%
Sales Projection 896
Months of Inventory

4.98

Sales still running about 21% ahead of last year’s pace, but for the first time some indicators are down year over year.  Sales/list at 69% is less than it was last year at 77%.

Daily sales trending downward as you would expect into the fall.

Oddly enough a pretty good sized jump in active listings last week.   After several months of decline we gained 41 listings.  For reference in the same week last year they dropped by 99.   Market turning around or just some noise?

deltainv

Birds of a feather

I know this is super late to the party, but my mind still boggles at the CMHC housing market “analysis” they like to publish quarterly.   Last quarter they finally woke up to the fact that something may be wrong in Vancouver.  Hilariously this may have come when the bubble was already well on it’s way to deflating.

van_cmhc

We covered the previous quarterly report when it came out, but I might as well mock them again.   As little attention as the Victoria report received in the media, it apparently received even less attention by the people writing it.  The note at the bottom of the page says “Results are based on data as of the end of December 2015” which is exactly what it said 3 months ago.  So either they haven’t updated their data or (more likely) they tossed the report together on a Friday afternoon and didn’t worry too much about proofreading.

The report for Victoria?   Mostly green across the board, although the “Overheating” category (sales/new list ratio) has moved to moderate as it passed 80% for Q1 2016.   The overall assessment is green though so it’s all peachy.  In fact it seems we are most similar to the Atlantic coast among such cities as Halifax, Moncton, and St. Johns.

cmhc_report

So what’s happening in Moncton that makes it so similar to Victoria?  Well this is a market that is so fantastically boring they last bothered to update their statistics over a year ago.  Back then the average house cost $155,000 and it hasn’t gone anywhere exciting since.

vicmoncton

But wait.  Isn’t the Atlantic coast a depressed economic region?  I’m sure their incomes are a fraction of ours so the house prices make sense in the local context.

pti

Nope.  Turns out those bogtrotters make almost the same as us!

The thing is, I may have accepted the argument that we must compare to historical norms.  That price to income has been high historically in Victoria so we have to see the current levels in that context.  But that’s not what the CMHC is saying.   They say that the overvaluation metric is defined by fundamentals such as incomes, the cost of financing, and population.   Well incomes are about the same, the cost of financing is identical, and Moncton’s population is growing at over twice the rate of ours.  And yet the CMHC is squinting their eyes at that graph and saying “Those are about the same, eh?”

 

August 8 Market Update

Weekly stats update courtesy of the VREB via Marko Juras.

August 2016
Aug
 2015
Wk 1 Wk 2 Wk 3 Wk 4
Unconditional Sales 188
741
New Listings 265
952
Active Listings 2133
3688
Sales to New Listings  71%
78%
Sales Projection
Months of Inventory

4.98

Daily sales with a grain of salt given the long weekend just like the first week of July

Outside of the anecdotes in the news, there isn’t much real data out of Vancouver yet as far as impact of the 15% foreign buyer tax on sales.   In looking for some I poked my head over to one of the more active housing blogs in Vancouver and was honestly shocked at the amount of blatant racism and garbage in the comments.  It seems that market is bringing out the worst in some people.

Also the lack of easily available data for Vancouver is interesting.  We’re actually pretty lucky with the amount the VREB publishes compared to most other real estate boards.