September Sales – Cooling Down

Two weeks ago, I suggested that the real estate market in Victoria might be slowing down. At first glance – the sales volume of 704 properties sold being the highest since 2009 (776) would suggest otherwise, but strangely the inventory of 3668 active listings is at the lowest level since 2009 (3509). As Marko has pointed out, you have to go back a dozen years to find such low available listings for September.

The Single Family Home (SFH) average selling price dropped a substantial 7.3% from the previous month, and is the lowest monthly average since February. The SFH median selling price also dropped slightly, but the three month rolling average is similar to last April.

Great Victoria - September Market History - September 2015

Victoria SFH Median and Months of Invetory - September 2015

With the average SFH price dropping but the SFH median remaining fairly constant, the gap between the median and average prices is closing. This suggests that the market is shifting – with an increase in the volume of SFH selling substantially less than the median being tempered a similar increase in sales volume above the median (as indicated by the 6-year high in sales volume).

2015-10-01 16_55_57-September 2015 Sales

The volume of condominiums sold is up a significant 30.2% from September 2014, but the average price is down 2.8% from September last year and down 4.1% from August 2015. The volume of townhouses sold is up a whopping 51.0% from September 2014, but the average price is down 3.0% from September last year but actually up 7.9% from August 2015.

In spite of very low interest rates and a stable five months of inventory (near sellers market) from July through September: there’s an increase in volume of less expensive real estate being sold … things are cooling down.

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155 thoughts on “September Sales – Cooling Down

  1. That was the point I was making in my earlier postings about how the market has changed this year. It’s not just the price and the lack of choice, but also the hyped-up conditions sometimes of houses being listed low and dozens of viewers on the first day. Who wants to make such a huge decision under those circumstances?
    P.S. I would love to rent the house you are in, even for more. You have a tough decision to leave that.

  2. This makes me feel blessed that I rent a house in Oak Bay for $1850 that is assessed at $775,000. Something of a Unicorn in Victoria!
    We love the location of where we rent and the charm of the 1912 house, but we would love to buy a place as well and raise our two young children there. We are in a position to buy now, but know we couldn’t come anywhere close to matching what we have for the price. Added to that is the frustration of how little choice there is, and the competition for what little there is. My wife would love to stay in Oak Bay, but right now it seems that $700,000 barely gets you a starter home. $700 is within reach for us, but not for the quality of home currently on offer. I can almost live with the prices, it’s the lack of choice that is killing me right now. If only 2013 would come back….

  3. Who needs a new blog to discuss the Okanagan ? It was just an article for general interest, not to dissect.

    FYI, “year to date” refers to January to present. Sometimes google comes in handy to see other areas of the province.

    Wether you find it of interest or not it makes no difference to me, but others may find it of interest. Funny how the word “annoying” comes to mind today.

  4. The actual statement is:

    “The Central Okanagan and Shuswap markets continue to strengthen and see an improvement year-to-date over last year.”

    Not sure what they are referencing but I read that as comparing the same timeframe this year over last year – or yoy. Maybe it is not.

    The subject is September cooling is only in relation to the Victoria market which is clear from the post and title of the blog. If you want to expand to the Okanagan I would be happy with that as I don’t think there is a similar blog for that area.

    I didn’t know the province was on fire. The only markets I follow are Victoria and the Okanagan.

  5. Where I come from it’s called a dead cat bounce. From Wikipedia:

    “In finance, a dead cat bounce is a small, brief recovery in the price of a declining stock.[1] Derived from the idea that “even a dead cat will bounce if it falls from a great height”,[2] the phrase, which originated on Wall Street, is also popularly applied to any case where a subject experiences a brief resurgence during or following a severe decline.”

  6. A few up days don’t mean diddly Mike. All those stocks have been decimated in value in the billions and loaded with debt. Lumber, oil and copper are sucking wind and will be for long while with a loonie at 75 cents. A trader can make some change on these pops after but if you are thinking a boom is suddenly going to appear out of your fairy dust then you will be surely disappointed.

  7. “year-to-date sales improved by 5.4 per cent compared to 2014” not YOY as you just stated :

    “but the sales numbers yoy are up 5.4%.”

    If the province is supposedly on fire and one area that attracts the second largest market outside of the lower mainland (excluding Victoria) shows a cooling off in sales then it’s worth noting.

    You don’t have to buy it but I recall the Okanagan one was one of the first to decline in 2008 correction with the heavy tourist/recreation related population. It may not effect Victoria immediately but the subject of this thread is “September sales cooling down” is it not ?

  8. Where I come from this is called a bigass Canadian bull flag with big ramifications.
    20k here we come.

  9. Hawk, did you happen to notice how much BC resource companies (timber, mining…) are up again today? Here’s a few for you to peruse… interfor, first quantum, teck, west fraser…

    ***If you’ve been a housing bear renting, especially in a smaller resource community, it’s time to pay attention to the shift that’s starting.

    ———
    “I believe Jack has posted stuff on the outlying effect many a time.”

    I’m not so sure Jack would agree that his theory has worked out so well for him over the years.

  10. Might be some correlation between Victoria and Langford. I don’t see one between the Okanagan and Victoria which was your premise. It is not basic economics 101 theory to correlate these markets imo, nor is it valid from what I can tell.

    There are many statements in that article. If that is the one you are referring to you’ll need to include the rest of the statement which was that low interest rates and high consumer confidence are bolstering demand – not that demand is bolstered as sales decline.

    What I take from the article was that September 2014 had a lot of sales and this year sales are down 9.5% over last September, but the sales numbers yoy are up 5.4%. I don’t know what that means for Victoria but it is not like what has occurred in Victoria.

  11. PS, I believe this was the trend back in 2008 when Langford and Bear Mountain blew up. But you can look up the stats yourself. I believe Jack has posted stuff on the outlying effect many a time.

  12. It’s very common to see smaller markets with less economic activity be the first to see slower demand. Sorry I can’t provide you with a detailed 10 paragraph thesis but it’s pretty basic Economic 101 stuff.

    When they have to state demand is bolstered when sales are declining then I call that a hype statement.

    “According to the OMREB, with B.C. being “the economic growth leader among provinces” and mortgage rates remaining at historical lows, high consumer confidence continues to bolster the demand for homes in the Okanagan-Shuswap.”

  13. Ah info, moved on to repetitive posting on the greater fool site. I don’t think her views have shifted a bit. The crash is still coming and Victoria house prices have declined since 2008. Only the foolish would own a home in Victoria.

  14. “Always starts in the smaller places first.”

    What is the factual basis for this assertion? Do you have historical stats to compare?

    I own a home in the Okanagan and the market there does not seem to be closely correlated with the Victoria market.

    And passing off information not supporting your downturn view as “realtor hype” is not very credible. “Realtor hype” definitely exists but statements need to be analyzed prior to dismissing them.

    For example, the article states: “The inventory of homes for sale remains at low levels with essentially no significant upward momentum over the past few months,”. And, “The North Okanagan outpaced these zones with a vigorous run up of sales activity in 2014 and also saw relatively strong sales activity during 2015, but has lagged behind last year’s pace,” – which is not at all what has happened in Victoria YOY.

  15. About two full years ago (Sept 2013) that our old friend Info predicted that “sales will tank”. Amazingly since then every single month has had a year over year increase in sales. The perils of prediction….

  16. Housing starting to cool off in the Okanagan – Shuswap. Always starts in the smaller places first.

    Housing sales cool

    “After an active summer, house sales cooled in the Okanagan-Shuswap over the month of September.”

    ” Single family home sales across the board were down 11.9 per cent compared to September 2014 ”

    “Overall sales of all property types reported in OMREB’s board area (Peachland to Revelstoke) during September 2015 dipped 9.7 per cent compared to 2014.”

    Lots of agent pump in this article though but those are the key points.

    http://www.castanet.net/news/BC/149206/Housing-sales-cool

  17. “Market crash pending” blog posts are a market signal for impending bear capitulation. The days of this blog are numbered.

  18. A sure sign of a impending market crash. At least for most bears it is. Meanwhile in the real world property owners are enjoying life.

  19. Thanks for the numbers Marko. That’s a big increase in Vancouverites buying. Now we just need some of our new Trans Pacific Partners (TPP) to start buying.

    I think we a “warming up” blog post is in order… or how about “El Nino winter on its way”

  20. I’ve been using a rolling three-week average to predict sales at the end of the first week for the end of each month. Based on weekly sales for Sept, 20th, Sept, 27th and October 5th my current projection is for 676 sales for October – so not far off the 700+ that Marko is predicting.

    Looking back at the predictions for the past three months:
    July – prediction made July 5th: 779, actual: 796
    August – prediction August 9th: 731, actual: 741
    September – prediction Sept. 6th: 703, actual: 704

  21. Yes I see the typo.

    Unfortunately, the free version of WordPress does not allow for users to edit their own comments. However, as the site administrator – I have permission to do so. If any user posts a comment and then realizes they need an edit, just let me know.

  22. if the market is being manipulated then there will be little reason to continue the stimulus after October 19.

    A tighter lending policy after the election will make financing more difficult to obtain for some buyers. I can understand the rush for some to buy something or to buy anything while they can still qualify.

  23. Why should we not be surprised with 163% personal debt levels. That is based on only a $300K mortgage. Since twice that seems to be the norm in parts of the woods I would bet $1000 would push the market off the cliff.

    Nearly one in six Canadians could not handle $500 increase in mortgage payment

    “Nearly one in six Canadians would not be able to handle a $500 increase in their monthly mortgage payments, a new survey from the Bank of Montreal suggests.

    According to the bank, 16 per cent of respondents said they would not be able to afford such an increase, while more than a quarter, or roughly 27 per cent, would need to review their budget.”

    http://business.financialpost.com/personal-finance/managing-wealth/nearly-one-in-six-canadians-could-not-handle-500-increase-in-mortgage-payment

  24. In the core districts the volume of year over year house sales since January 1 is up from 1,543 to 1,831 an 18.7% increase. For core condos sales volume so far this year is up from 1004 to 1,300 or 29.4%.

    Victoria isn’t much different than other cities in Canada like Montreal, Ottawa, Toronto, Fraser Valley, Vancouver etc.

    There all up. Which is amazing since real estate is suppose to be local. What ever has caused this spike in sale volumes is mostly universal across Canada. That makes me suspect that this increase in sales volume has been directed, most likely for political reasons.

    When governments interfere with free markets, there actions distort the market. When the government eventually removes the stimulus the market has a propensity to over react in a negative manner.

    In my opinion, if the government is intentionally interfering for political reasons then they should be held accountable for their actions. This is predatory economic entrapment.

  25. Another trend I’ve seen for the first time is Vancouver buyers solidly out clipping Calgary buyers. Since September 1st, 2015 39 properties have gone to Vancouverites versus only 25 Calgarians.

    For 2014, we had 205 reported Vancouverites sales compared to 208 Calgarians.

    So far for 2015, YTD we have 259 reported Vancouverites to 178 Calgarians. We’ll finish the year with more Calgarian purchasers than 2014 and more than 50% Vancouverites.

  26. For the last 24 hours my database is showing 33 new listings, 33 sales, 9 cancelled, 5 expired…..I have not seen these types of ratios often in my 5+ years. Even this spring most days you had quite a few more new listings than sales. Obviously this can’t last forever as we would ran out of inventory.

  27. I have a better idea in terms of how a month will play out as I book a lot of showings; therefore, I get a lot of replies along the lines of “accepted offer, conditional until October 12th, do you still want to show.”

    I don’t really have a history of pumping the market. I under predicted 2015 by 2,000 sales or so.

  28. Kinda premature to predict a whole month’s sales on the 6th ? C’mon Marko, you lose credibility trying to pump people to buy based on a few days. On the other hand the more that pile in the better, then the sooner the pool runs dry like in 2007/08.

    BTW, oil hit $49 a month ago so we’ll see how much oomph it has left tomorrow. I may even buy for a flip if it’s got another leg to go.

  29. Ancient news my dearest blogmaster 😉 …hence today’s market & currency reactions.
    That was way back when oil was in the 30s.

  30. The way sales are coming in yesterday and today we won’t be too far off the best October since 1992. 2009 was 742 sales and 2003 next up at 713 sales. We’ll be someone in the 700 to 750 range I would think.

  31. The only reason it went up is because they dumped assets to save a billion not to mention layoff hundreds of people and reduce salaries by 20%. Now there’s signs of a booming global economy ! 😉

    “The Vancouver-based company has also cut 644 people from its work force, reduced salaries by up to 20 per cent and lowered the cost target for its flagship Cobre Panama project by seven per cent, to $5.95-billion.”

    http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/first-quantum-to-sell-assets-reduce-debt-by-at-least-1-billion-by-end-of-first-quarter/article26677291/

  32. “This is the worst time of year to compare rentals. Listings are always tighter when school gets back in and landlords are gouging, especially in the Gordon Head/UVic area.”

    ———————–

    Excerpts from a recent Times Colonist article re: UVic and student housing:

    “Right now, there aren’t enough beds. Last year, 5,000 applications came in for a space in residence, but UVic has just 2,300 beds in single-student housing and 181 family housing units.”

    “UVic has a policy of guaranteeing first-year students a bed in residence. That meant 93 per cent of single-student beds were taken up by first-year students, leaving little for others.”

    “More than 70 per cent of UVic’s 19,400 students arrive from off Vancouver Island, and it can be difficult for students to find housing in the region with tight vacancy rates.”

    http://www.timescolonist.com/business/uvic-planning-for-additional-student-housing-1.1952672

  33. Nice to see energy, minerals, banks up again today. Oil’s adding another $2 per barrel, miners like First quantum another 17% today, CIBC is up 23% since oil bottomed back on Aug 24th.

    The forecast calls for a ‘hot’ winter folks!

  34. I don’t think it’s that bad. My portfolio is well balanced and 100% equities and I am down 12% from it’s peak value. I will say most of my recent purchases into this storm are down on average around 15%. Then again the cash for those came from cashing out portions of the winners before the correction. I am glad I cashed out my all of my Alibaba shares at $85 at least. Traded them for LULU some more Paypal and some GoPro again (had cashed those out when they doubled).

  35. “With rates still having a chance to rise in December…”

    Why wait til Dec… let’s get this rising rate party started! 😉

  36. Industries that just got creamed due to global demand don’t just “turn a corner” Mike. It takes many many months or years for that matter to turn around some of these commodities. What you are seeing now is a dead cat bounce, just like a month back.

    With rates still having a chance to rise in December as per the Fed today I wouldn’t be loading up too heavy on Marko’s stock picks as Teck’s debt is labeled “junk status” by Moody’s and First Quantum isn’t far off of it and bondholders are not happy. Both got hammered 70% the past few months so a 20% pop is nothing to crow about after such a disastrous implosion.

    Are @MLS agents allowed to give out stock tips ? 😉

    Moody’s downgrades Teck Resources debt to junk status

    “We expect prolonged commodity price weakness and sizable investment spending will cause Teck’s financial leverage to remain well in excess of typical investment-grade thresholds through at least 2017,” Moody’s said in a statement Monday.

    http://www.cbc.ca/news/business/moody-s-downgrades-teck-resources-debt-to-junk-status-1.3227990

  37. My point precisely young skyhawker… if Vic houses are up 8.7% while our stocks and industries have been creamed, what happens now as our western industries turn the corner?

    Another way of looking at it… the buyers of COS know full well the price of oil will soon be double what it is today, hence they’re willing to pay such a premium.

    Now quit wasting your time here and go buy some property before we hit the million median 😉 You can invite me over for celebratory drinks in 2020.

  38. That video just reminded me that the China markets have been closed for a week, no wonder markets went up.

  39. Canadian Oil sands got bought out. Have you actually looked where those companies were just months ago ? Most are down 50% plus and have a mountain to climb. Pumping a market turnaround after 2 up days is very salesman of you though. 😉

  40. Neighbours who recently sold their house are now renting a 5-year old 3000+ sq.ft. home in Gordon Head for $2500/month. The landlord approached them to see if they were interested in buying for $750K.

  41. @Totoro

    The rolling 12-month median for SFH in Victoria a year ago was $537,420 and is now is $556,475. This works out to a $19,055 increase, or a 3.54% increase over the past year.

    The rolling 3-month median for SFH in Victoria a year ago was $545,483 and is now is $566,167. This works out to a $20,684 increase, or a 3.79% increase over the past year.

    (Knowing that single-month averages are the worst kind of comparison), the SFH average in September 2014 was $626,774 and is $621,118 in September 2015. This works out to a $5,656 decrease, or a -0.90% decrease over the past year.

    The reported benchmark increase of 7.1% (or 8.7% in the core) was provided by VREB.

  42. By the look of some of our company performances lately and other news, I’m starting to wonder if this could be a record setting winter for Vic’s housing market.

    Canadian oilsands +55% today
    Teck resources +21% for the week
    First quantum +32% for the week
    Can West bank +6% today
    Trans Canada +10% for week

    With all the resilience we’ve shown in the face of economic fear lately (up 8+% annual), you have to wonder what happens as the fear fades? If interest rates (wages & inflation) start to rise next year, this market is really going to ignite.

  43. I am not seeing when and where this market crash is coming from

    Economic recovery, on the model proposed by Donald Trump, the fronrunner in the race for the Republican Presidential nomination, i.e., protectionism leading to reduced unemployment and higher prices for most manufactured goods, which will mean a return to what Info calls “normal” interest rates, i.e., a bank rate of 6% and mortgage rates of 8 or 9%. See what that will do to affordability.

    Canada would be compelled to follow in America’s footsteps.

    Trump, incidentally, now leads Hillary in national opinion polls.

  44. Might be. There were quite a few above that price point. Those houses might suit a family well if they are up for a furnished house in the one case and willing to drive everywhere. All the homes for rent in the walkable ob village area where I live seem higher priced.

    I’m not even sure of the point really. If I was a renter I would be looking for cheaper accommodations in my neighborhood than a 750k house so I could save more to buy.

    I’d consider a townhouse or duplex in the right walkable area. I would buy a 750k home but harder to pay 3k a month on rent.

  45. The 750k homes renting for $2,500/month are homes that buyers would buy for 750k and spend another $100,000 updating them.

    Rental market and sales market are a bit different in that a buyer, for example, will pay a large premium for a big lot; however, a renter is unlikely to pay too much extra for a 12,000 sq/ft lot versus a 6,000 sq/ft lot.

  46. I was just about to say unless teardown sitting on a huge lot a home valued at 750k is probably going to run $3,000 -/+ $300 to rent, but probably more +$300s out there than -s

  47. Yes – 4 % might be high. It is the historical average. We have had a period of little appreciation. I don’t know what will happen but aren’t prices up 8% this year?

  48. This is the worst time of year to compare rentals. Listings are always tighter when school gets back in and landlords are gouging, especially in the Gordon Head/UVic area. Usually much more SFH rentals out there. Must be following the housing market where renters are staying put and owners aren’t selling.

  49. I never stated borrowing on credit card to invest. Total debt obligations from other places does effect your ability to borrow for a mortgage. If you have $30K credit card debt or a car loan for similar amount and have 10% down with average income on a $700K home, I bet you won’t be getting a mortgage.

  50. Home equity isn’t an asset. Asset-Liability=Equity

    You may use the equity in your home for a secured line of credit.

    Those without a home may have an unsecured line of credit typically at a higher interest rate than unsecured but certainly not at the high rates charged on credit cards.

    A common misconception is equity is the same as cash. However cash is an asset. Equity is not.

    For example one might say they bought their new BMW with cash. What they actually did is that they bought the car using their home equity and not a car loan. What they’ve done is confused cash and equity.

    The media and advertising has helped this misconception with ads.

    https://youtu.be/Dmf8hVNH8cc

  51. Yes, assessed at $478,000. Not sure what market is. I’m in Oak Bay – maybe it exists here – I’m not changing school districts.

  52. 4% seems a little high when you consider the performance over the last 7 years… Some of those numbers are suspect though 😉 so do the calculator yourselves! but most of all think for yourself…. I own two houses. I’m comfortable with my decisions. I would not however pressure anyone one to buy right now. I did to all my friends in 2003 though….

  53. There is a big difference between credit card debt and mortgage financing. The qualification rules for mortgages are based on affordability limits. Anyone borrowing on a credit card to invest is playing a high interest high risk game.

  54. Yes, I don’t know any 750k whole houses for rent for $2200. However, you can rent a suite for that so it is not comparing apples to apples but that is maybe a real scenario and I kept your number.

    And 7% seems high for a return for your average person – I put 6%. I also used 4% for home appreciation.

    Here are the other differences from mine:

    1. No $5000 tax to be paid. Not sure what this is for – not a new home.
    2. Down payment of 20%.
    3. Taxes $4700 after HOG
    4. Costs of buying a home of $2500 (conveyancing title insurance and share of property taxes)
    5. Costs of selling with Marko $11,000 – mere listing and commission to buying realtor only.
    6. Yearly home maintenance $5000 – I don’t spend anywhere near this on maintenance fyi – renos yes but I’d hope at $750,000 it is not a fixer upper.

    I don’t know how to post the chart but the net investment gain in year 2 is $6,581 with a home and negative $33,016 with renting.

  55. The Dow up 300 points means nothing coming off a major whacking. ICYMI the Dow is just 30 stocks. It’s the shorts getting squeezed off a bottom but is still miles off the 200 day moving average. Danger still lurks everywhere, two up days is not a recovery to the “good times are back” scenario. Check out the largest winning sector of the past few years in the biotech stocks, there’s still blood everywhere and no bounce back yet there.

    I believe the 2007 sales numbers pre-financial crash are similar to today’s, and since we have a diversified selection of houses you best be praying those with the bucks to buy the $700K plus houses keep buying. Is there an endless supply buying substandard selection forever ? I highly doubt it. Markets generally go down faster than when they go up and you haven’t experienced a real correction in your career yet.

    tortoro,

    “roadkill” is a well used term that refers to those who got greedy and maxed out their credit borrowing too much, wether it’s in real estate or investing.

    Many carry credit cards with upwards of $30,000 balances or a number of cards compiled without a HELOC or equity. A credit squeeze will be the demise of this market IMHO.

  56. Not too many 750k home out there for rent and when you do find one that is livable $2,200 seems a little low.

    7% return will carry significant risk in the markets.

  57. Based on the gains this year and the losses from 2010 to 2013 we would need to have this year followed up by the sales volumes/inventory of 2010 to 2013 to give up the gains.

  58. Your home equity is your home equity.

    It is separate from other debt you might have and remains an asset you would not have had had you rented.

    If you have a HELOC you have quite significant equity. The effects of divorce on someone without equity but credit card debt and legal fees are much worse.

    I agree child/spousal support payments make it hard for men in particular to repurchase or even rent a decent place in many cases. Crazy system that needs some adjustment imo.

    Good luck on knowing when the market is peaking. We’ve had constant wrong predictions of that here. Not sure what magical “macro signs” you are referring to that indicated peak, but no-one has predicted this accurately that I am aware of and I’m not aware of anyone who has been “road-killed”. What does that even mean.

  59. Unless we get a repeat of 2008 (with the dow up 300 points today would not appear investors are banking on it) I am not seeing when and where this market crash is coming from….let’s put sales numbers into perspective.

    2010 – 395
    2011 – 458
    2012 – 419
    2013 – 487
    2014 – 565
    2015 – 704

    Sales are up over 50% in comparison to 2010 – 2013, new inventory for Sept was at a 12 year low……nothing really supports prices going down at this point.

    The crazy part is even with low 400 sale Septembers we didn’t see a lot of downward price pressure in the core.

  60. I know a few couples that owned much longer than 7 years and have zero or very little left after the lawyers papers signed. HELOC’s and credit cards take a big chunk of the equity built and most people access that credit, just look at the country’s 163% personal debt records that prove it.

    Most people I have known don’t re-partner for a few years or more, and those who pay child support are put in a lowered borrowing power position as it is used against income. The guy paying for two kids at $1000 or more plus another $1000 alimony aint buying in anytime soon. In some cases it’s 70% of their take home pay making average money.

    Wanting to buy and content to rent, and knowing when the market is peaking is financial power, not “waiting for a crash that never comes” mentality. Those ignore the macro signs are the ones who have been roadkill in past corrections/crashes.

  61. I think you would likely be up on your equity if you purchased in the last 5-7 years in the core and are now selling. Two of my friends have sold recently having bought in this timeframe and they did make money after transaction costs. Not sure exactly how much.

    I agree with many renters being those who won’t become owners due to income and this skews that stat a bit. I also agree divorce is a serious financial blow. People do recover from it and go on to buy houses again as most people re-partner after divorce.

    There might be a lot of landlords of SFH’s in it for the long-term, but I don’t so. Apartments and suits in houses are more secure imo. Nothing wrong with renting unless what you really want is to own and you are waiting for a crash that never comes. If you are happy to rent then there is no problem.

  62. Another trend that I’m seeing in foreclosures is the law firm taking a percentage of the sale price in addition to their regular fees. It’s incredible how much gets tacked on to the outstanding mortgage in a foreclosure. With missed payments, penalties and legal costs it can be another $100,000 on the typical home in Victoria.

    I worked for one credit union that tacked on $3,500 to the mortgage when the payment was late by 3 days. I was usually the first human contact the home owners had. And it’s scary for most people when someone says “I’m an appraiser for XYZ credit union and have been asked to perform an appraisal on your property” They want to know why I’m calling and usually I ask “have you missed a couple of payments?”

    Most of the big banks will take between 6 months to a year to foreclose on a property. But the smaller credit unions don’t have that luxury. They have to move a lot quicker since they don’t have the deep pockets of a bank. From your first notice to when the Sheriff changes the locks on the doors can be less than 3 months.

    Foreclosures are down from the last few years because so many people can sell their property easily or can readily obtain financing from another bank.

    But, If you want to know who “owns” your house – start missing some payments.

  63. Thanks Marko. My current projection is for 676 sales for October.

    The rate of sales (22/day) has been steady for the past six weeks and new listings (32/day) steady for the past five weeks, so even with the active listings dropping, it looks like there is a net growth of about 10 new “fresh” properties coming on the market each day. This is good for buyers.

    I expect that some of the properties that didn’t sell over the summer are being pulled to “try again” next spring.

  64. I would bet that the majority of those getting divorced who bought in the last 5 to 7 years will have little if any equity left, especially after the lawyers take their share, thus neither will be most likely be buying again anytime soon. Most divorces with lawyers involved cost upwards of $30,000 to $60,000 for each party if kids and property are involved. One of the parties will also be paying child support and possibly alimony so one person is definitely out of the housing game.

    As far as net worth thing goes, a large percentage are low incomers who will never own and the others are renting by choice like myself who see a bloated market and like the $1000 plus left over every month to invest, save, or have a life without the ball and chain of endless home repairs or upgrades.

    Not everyone rents from a landlord who is on the edge of selling either. I think that situation is exaggerated and most have steady landlords who are in it for the long term or they rent apartments where there is no direct owner.

  65. Economically that makes sense to look for an alternative property that is lower in cost. Psychologically that means lowering your aspirations and settling for less than what you want. No one wants to settle for less in life. You want more than your parents – not less.

    But with low interest rates most of us can have what we want – now. We just have to finance more of that purchase. And if it makes you fell any better – everyone else seems to be doing it too. But that’s the emotion talking not sound reasoning. An extra $200 or $400 a month in mortgage payments to get the home and the location you want by bidding $50,000 or $100,000 over market value seems cheap today. But that’s lost money, it doesn’t compound into increased equity You’re lighting the fireplace with hundred dollar bills each month.

    What’s likely to happen is that you are going to get so frustrated that you’ll buy at almost any price the bank will finance. That’s what happens in a sellers market when you get bid out by so many other buyers that are feeling the same frustration as you.

    And now some music to buy a home to..

    https://youtu.be/36HQo_06AFE

  66. A lot confounding factors in the net worth equation. For example, the higher your net worth the less likely you have time or are willing to deal with being given two months notice to move or the landlord putting the place up on the market. I had one situation this year where a landlord put a home up on the market and we had over 90 showings while the tenant was trying to work from home, it sucked for the family renting.

    At this point in my life for me it isn’t a numbers game anymore in terms of monthly cost of renting versus owning, moreso a game of it would cost me a ton in lost income/my time to move on two months notice. Just finding a half decent single family home to rent is a challenge in itself.

    Renting could be 2x-3x cheaper/monthly, not going back to it as I can comfortably afford to own.

  67. I did the calculator and you are much better off buying starting off in year two. I’m not sure what the difference is but maybe my interest rate, annual maintenance costs and cost of future sales were lower?

  68. Mon, Oct 5, 2015 8:00am:

    Oct Oct
    2015 2014
    Net Unconditional Sales: 87 602
    New Listings: 128 945
    Active Listings: 3,348 3,927

    Please Note
    Left Column: stats so far this month
    Right Column: stats for the entire month from last year

  69. @ sweethome. I agree with the be patient sentiment. Although I don’t believe in a nuclear meltdown crash is around the corner. Opportunity knocks but once many times…. So who knows what might happen down the road. What is most important is now.
    In Victoria renting is still a sound option if you can also invest. This is a fantastic rent vs own calculator. http://www.getsmarteraboutmoney.ca/tools-and-calculators/buy-or-rent-calculator/buy-or-rent-calculator.aspx#.VhJfSVWrRQI

    A house of $750,000 vs renting for $2,200 at 4% appreciation in housing you are still better off renting. I condone owning a home if you can afford it though. perhaps lower your target price?

  70. In our local real estate market houses have appreciated faster than inflation over the past 50 years, quite significantly so. Leo posted those charts here in January 2014.

    I’m not sure of your point as to the “hole in the theory” when we are talking about Victoria here but, in any event, the same can be said about Canada overall and whether you use the inflation rate or increase in incomes, housing prices have outpaced both.

    The divorce rate in BC is 40%. I strongly agree that this is a big risk in not being able to plan the timing of a home sale, although not everyone sells when they get divorced. One spouse often retains the home. It does impact net worth significantly.

    As set out on this blog previously a number of times, home ownership is correlated strongly with higher net worth for families. The “renting from the bank” for life scenario is actually a privilege. There is a fairly dramatic increase in net worth over time due to equity created through low-rate leverage.

    The average Canadian homeowner has a net worth of $377,000 versus renters whose average net worth is $64,000. A big part of the difference is home equity.

    If you believe this will somehow be different going forward because of increasing house prices I’d disagree that this is likely to be true. Home ownership is a very strong motivator for the majority of Canadians.

  71. Hate to put a hole in your theory, but real estate is local. It tracks the local economy and not the inflation rate.

    But I agree with you on selling in less than seven years. The only thing that makes real estate a sure bet is a long holding period. The longer you hold real estate the greater your chances of not taking a loss. Unfortunately, a significant portion of today’s home buyers won’t have that luxury of choosing when they will sell. Half of the people reading this blog will get divorced, another portion will relocate for a work and family, loss of a job, injury, death of a spouse ( male or female) etc.

    That today’s mortgages are jumbo size increases the probability that due to the trials and conflagrations of our lives a lot more people today will never pay off the mortgage. They will become life long renters of the banks. A pair of golden handcuffs with a garden shed.

  72. Meh, market value is easy to determine. Willing seller and willing buyer determine this. Dive in and you’ll soon find out. SweetHome can tell you this, as can Marko.

    Assessments for property taxation purposes do not correlate with market value now, nor have they most of the time in my experience. Red herring.

    I don’t know what the housing market will do in the future. I do know what it has done in the past, which is to increase at a greater rate than inflation over a seven year period or so.

    As for having to sell, if you think you might have to sell in less than seven years there is a higher risk of a loss.

  73. If only the calculation were so simple. Try rent vs. mortgage, interest, expenses minus mortgage pay down, appreciation and rental income (if any). Different number.

  74. You have three offers on a property. One at $150,000 another at $160,000 and the last at $210,000. What’s the market value of the property?

    The answer is – no one knows. It can be any or none of them. All of the above are potential market/sale prices depending on which offer and terms the vendor accepts.

    Market Value is not determined by the sale of a singular property but many sales of similar properties.

    The assessed value is also known as “actual value” it may or may not be market value. For example farmland has an exemption through legislation and therefore does not reflect market value.

    The assessed value is as at July 1 of the previous year based on the condition of the property as at October 31 of that same year. When was the last time a government assessor went through your home to determine what has been renovated or added onto the home? Now how accurate would you expect the assessed/actual value be?

    The assessed values are also for taxation purposes only. If you’re using them to determine a value to buy or sell a home, then that is an improper use of the assessment and the government is not liable for your inappropriate actions. Rely on them at your own peril.

    Now what will the market do in the future? That’s simple it will do what every market has done before. Adam Smith in 1776 wrote the Wealth of Nations and he explained that all markets return to equilibrium. A balance between buyer and seller.

    What is really underlying the upward trend? The foundation of market value consists of Social, Geographical, Economic and Political factors. You’ll have to ask Stephen Harper that question. But ask yourself if you had the ability to loosen credit conditions during an election year to keep voters happy – would you? Voters that are happy with the economy don’t want things to change.

  75. I believe, by definition, “market value” is what someone is willing to pay for the house at the time, so if there are several offers on a house in the same ball park, that is the market value of the house. Assessed values will go up next year as the market value goes up; they lag behind in a rising market. Also, assessed values are sometimes way off (high or low) if a house is atypical. It does require a change in mindset, though, to adjust to an increase after years of basically flat prices.

    The question is what will the market do in the future? I do not own a house at present, so there will be no return from that sale to make a price increase less painful. So, I’m stuck with the classic real estate dilemma: I do not want to buy at a peak, but I don’t want to get shut out (although the rate of increase hasn’t been that dramatic yet). Unfortunately without knowing what is really underlying the upward trend we have seen, it becomes hard to predict.

    I know that if one plans to stay in the house long term, the timing becomes less important, but sometimes a sale is necessitated by changing circumstances.

  76. Meantime, Sweethome is paying less in rent than he or she would pay in mortgage interest plus taxes, and has no maintenance expenses. So what’s to regret?

  77. I can not believe how little even $750K now buys in some of the “better” areas.

    Unless the sky’s the limit, your observation suggests an approaching market top. The market is overpriced relative to rents, so why buy? More and more people must be asking that question, so the market could tip any time (and according to DavidL’s chart it already has). A few more disillusioned prospective buyers and the market could tank. A sharp rate increase due to a credit crisis and you could have the mother-of-all crashes. But not till after the election!

  78. Sounds more like selling cemetery plots rather than real estate or a priest giving last rites. “Buy now before you’re dead”

    .

  79. Maybe. Sweethome has already waited a few years. Life is time limited and waiting it out doesn’t always work – market timing is pretty hard to do.

  80. Well Sweethome let’s see how the competition is stacking up against you.

    Since April there have been 51 homes sold within a 2 kilometer radius of Lambrick Park in your price range. An average rate of about 8.5 homes a month.

    The bad news is that there are only 9 homes with your criteria listed. And new listings being added at the rate of less than 1 to every home that sells.

    This isn’t just a market that favors sellers. The extremely low months of inventory and low new listings being added indicate a market that is very one-sided in favor of sellers. Half of the sales of homes you are looking to buy are selling over asking price. If you want to buy a home with this criteria you will most likely have to pay over market value because the competition is fierce. How much more? If it’s a recent renovation you could pay 30 percent over assessed value. That’s a big premium.

    Anything you pay over market value doesn’t become equity. It’s gone money. And that seems to be okay by many buyers because they are also selling a home at a high price too. It’s a zero sum game. You win on your sale and lose on your purchase.

    A hundred grand today only costs about $450 a month, so how much over market value are you willing to pay to get the house you want?

  81. I would take your time, as markets will eventually change. Worst thing is to kick yourself for missing out. I have sold two houses into hot markets that I thought would be a breeze and sell in a few days, but the market decided to go south practically overnight as listings suddenly exploded out of nowhere and 10% -15% haircuts were common place.

    If the cooling signs David pointed out materialize on a greater scale, I am sure it won’t take long create better selection and cheaper prices. The houses with those deficiencies you could live with before become deal breakers. Once the headlines change to “Listings Quickly Increasing” you will be surprised how fast the market can change. Patience can’t be stressed enough.

  82. It’s not a fun one to seriously contemplate as the ramifications could be massive but the risk is very real. When you think of the fact that most pension funds invested heavily in oil bonds/debt when oil was pushing $100 and now they are worth pennies on the dollar or zero in some cases. On the other side of the scale, pension funds in the US are in dire straits and need interest rates to go up bigtime. It’s a dangerous time to be flippant about dropping $700K plus based on emotion and keeping up with the Jones’s.

  83. Of course I’m referring to nominal David. When someone says “my house went up x dollars or % last year” they are never referring to inflation-adjusted. Most don’t even understand real dollars.

    Here are some of the years near or over 20% in the past 3 cycles…

    ‘74 >20%
    ‘80 37%
    ‘81 38%

    ‘89 18%
    ‘90 19%
    ‘92 16%

    ‘04 18%
    ‘05 20%

    Our lead city is already surpassing 20%. It’s usually only a year or two for the ripple effect to reach us. Maybe we only hit the mid or high teens this time?

  84. I purchased one home in a strong sellers market. Places went so fast and in many cases over list if they fit our criteria that I started to worry we would never find something. I did up flyers asking if anyone would like to sell their home in the area I was interested in and delivered them. I ended up finding something through a CL ad instead, but I think the flyer method could work.

    Hope you find a good place soon.

  85. I agree that year-over-year (YoY) and month-to-month (MtM) aren’t great … So why do you think that real estate boards put so much emphasis on these numbers?

  86. Prove me otherwise, Michael – but the only two years that had a minimum 20% increase in house prices since 1970 (after accounting for inflation) were in 1974 and 1980. We’ve never had sustained annual increases of 20% as you are suggesting.

    Year Canada CPI SFH Price [2015 dollars]
    (annual average)
    YoY change
    1960 15.5 $72,184  
    1961 15.7 $78,111 0.08
    1962 15.9 $80,912 0.04
    1963 16.1 $91,205 0.13
    1964 16.4 $90,444 -0.01
    1965 16.8 $93,780 0.04
    1966 17.5 $95,538 0.02
    1967 18.1 $107,171 0.12
    1968 18.8 $116,807 0.09
    1969 19.7 $145,964 0.25
    1970 20.3 $139,024 -0.05
    1971 20.9 $143,754 0.03
    1972 21.9 $148,748 0.03
    1973 23.6 $174,485 0.17
    1974 26.2 $222,843 0.28
    1975 29.0 $229,403 0.03
    1976 31.1 $245,656 0.07
    1977 33.6 $233,480 -0.05
    1978 36.6 $221,498 -0.05
    1979 40.0 $213,585 -0.04
    1980 44.0 $266,059 0.25
    1981 49.5 $325,776 0.22
    1982 54.9 $243,332 -0.25
    1983 58.1 $222,550 -0.09
    1984 60.6 $200,598 -0.10
    1985 63.0 $189,518 -0.06
    1986 65.6 $197,885 0.04
    1987 68.5 $204,513 0.03
    1988 71.2 $228,474 0.12
    1989 74.8 $256,662 0.12
    1990 78.4 $290,660 0.13
    1991 82.8 $294,609 0.01
    1992 84.0 $336,800 0.14
    1993 85.6 $366,632 0.09
    1994 85.7 $380,004 0.04
    1995 87.6 $351,415 -0.08
    1996 88.9 $346,130 -0.02
    1997 90.4 $350,252 0.01
    1998 91.3 $342,755 -0.02
    1999 92.9 $342,208 0.00
    2000 95.4 $335,197 -0.02
    2001 97.8 $337,038 0.01
    2002 100.0 $356,437 0.06
    2003 102.8 $405,858 0.14
    2004 104.7 $469,006 0.16
    2005 107.0 $550,882 0.17
    2006 109.1 $607,972 0.10
    2007 111.5 $645,587 0.06
    2008 114.1 $650,717 0.01
    2009 114.4 $645,727 -0.01
    2010 116.5 $687,781 0.07
    2011 119.9 $651,212 -0.05
    2012 121.9 $629,528 -0.03
    2013 123.0 $619,078 -0.02
    2014 125.4 $618,089 0.00

  87. Population-wise, comparing Victoria to Vancouver is like comparing Campbell River to Victoria. It just doesn’t makes much sense ….

  88. It’s hard to define the middle class, but by most estimates our combined family income would put us in the “lower” upper class category. We live in a modest, very average late 1970’s house on a nicest street in a less than ideal neighbourhood. The walkscore is about 50, and the commute to work can be frustrating at times. When we bought the house in 2002, our idea was to pay off the house ASAP so that we could have money left over for our kids, vacations, investments, etc.

    Perhaps it because my wife and I were together for ten years before we got married, but during those “student years” we developed a very similar attitude about money when planning our financial future. Would we like to live is a nicer house in a better neighbourhood – yes. Are we willing to compromise our lifestyle to do this – no. We tend to be more debt-averse than most, but I wonder if this is more typical of the “Bust Generation” within Generation X,

  89. Welcome to the blog and thanks for your comments. Likewise, I’ve been tracking available listings in Saanich, Victoria and other areas for the past five years and I have been surprised by both the lack of listings and some of the poor quality properties listed at a premium price.

  90. I just want to add a couple of comments from personal experience and a pretty good knowledge of market activity gained from looking for a home in Victoria or Saanich in the $600-700K price range for the past few years.

    I can definitely say that this year the selection is down and prices are up for my location/price range. I am now kicking myself for letting perfectly good houses go by because they had some deficiencies that in retrospect I could have lived with. When I recall the prices some of last year’s possibilities sold for, they now seem like a bargain.

    I can not believe how little even $750K now buys in some of the “better” areas. It is astonishing that Gordon Head is now being referred to as “prestigious” in some of the listing descriptions I am reading. Many houses in that neighbourhood are now being marketed as turn-key rentals.

    In the past month, I have seen many houses sell in one day and many for well over asking (like $50K). I am now starting to feel really uneasy (not quite panic yet) and hope things calm down. I don’t really understand why there has been this increase at this particular point in time, but if it is due to out-of-province buyers then I am afraid there may be more fuel for the fire still to come.

  91. A spouse is a life partner in a marriage, civil union, domestic partnership or common-law marriage. The term is gender neutral, whereas a male spouse is a husband and a female spouse is a wife.

  92. “Now ask your spouse the same question. You may get a different answer.”

    Love the stereotyping of wives/women. Keep up the great work, JJ.

  93. That’s a tough discussion to get into without being ridiculed. There are just so many things none of us know. But I think there is possibility that this could happen.

  94. What happens if the IMF’s fears of emerging market debt explosions coupled with all the North American oil bond debt bomb creates a nuclear credit crisis ? Sooner or later something has to snap if the IMF and many other market pros are freaking over just a mere quarter point interest rate hike. Evaporating liquidity is not a good thing, especially if you’re loaded up on real estate and need to renew that mortgage.

    World set for emerging market mass default, warns IMF

    “The International Monetary Fund (IMF) has issued a double warning over higher US interest rates, which it said could trigger a wave of emerging market corporate defaults and panic in financial markets as liquidity evaporates.”

    “The IMF said corporate debts in emerging markets ballooned to $18 trillion (£12 trillion) last year, from $4 trillion in 2004 as companies gorged themselves on cheap debt.
    It said the quadrupling in debt had been accompanied by weaker balance sheets, making companies more vulnerable to US rate rises.”

    It warned that this could create a credit crunch as risks “spill over to the financial sector and generate a vicious cycle as banks curtail lending”.

    http://www.telegraph.co.uk/finance/economics/11898936/World-set-for-emerging-market-mass-default-warns-IMF.html

  95. I suppose you would have to ask why the Fraser Valley isn’t synchronized with Vancouver by now. Despite having a lot more commonalities than Victoria has with Vancouver.

    “The Fraser Valley Real Estate Board recorded its second-busiest September on record last month, driving benchmark prices for detached homes up 12.2 per cent over the same period last year, the board said in a news release Friday.

    Sales last month were on par with September 2005, which was second only to the all-time record for the month, set in 1992. The total number of active listings was the lowest of any September since 2006, contributing to seller’s market conditions, the release said.

    This drove the benchmark price of a detached home to $639,500, up from $569,800 in September 2014.

    Benchmark prices for townhouses and apartments were also up, though not by as much. Fraser Valley townhouses were up 3.1 per cent, to $308,900, while the price of apartments was up two per cent, to $197,500.

    The Fraser Valley Real Estate Board includes Surrey, North Delta, White Rock, Langley, Abbotsford and Mission.”

    Read more: http://www.vancouversun.com/business/hurt+vancouver+property+values+city+told/11249659/story.html#ixzz3nWzhcZKv

    What is spooky about this real estate market is that so many cities in Canada are having increasing sale volumes. Real estate markets are suppose to be local but this seems to be a wide spread event. The only thing they all have in common is financing which has in the past been politically manipulated.

    What happens after the election when the Conservatives or other party is in power? When they bring out the rolled up newspaper and give Canadians a sharp smack on the nose for being bad (bitch) dogs.

    My opinion is that the Conservatives are bringing housing demand forward to keep the economy rolling along so that they are most likely ones to form the next government.

    https://youtu.be/y9FCsJSKhwc

  96. I’m not saying Oak Bay gets to Van West’s $2.74-million median next year.

    I’m simply wondering if in this cycle Victoria achieves the 20% yearly increases we did in each of the past 3 cycles… ’73-80, ’87-94, ’01-08.

  97. Vancouver is eight times our size, the financial hub of BC, not on an island and has historically has had over 10,000 homes listed for sale not including the Fraser Valley.

    Comparing Victoria to Vancouver is a fallacious argument.

  98. What is middle class when considering housing?

    As one blogger expressed a person’s income doesn’t determine class. Being middle class is more of a lifestyle rather than how many beans you have in the bank. And for most people, along with that lifestyle comes a house that befits that lifestyle.

    I suppose for real estate it relates to the most common style and size of homes. I would guess that most reading this blog would consider the common style of housing through out Gordon Head as middle income housing. Something less than that style as lower income and something more as higher income. Someone shows you three pictures of houses and you can lay them out from lower to upper income just by what they look like.

    Yet we have houses in the core districts that in appearance are lower income but with middle income or higher purchase prices. Well any estate agent will be quick to tell you that this is due to the land value. After the agent douses that fiery question they can then move on to selling the home. And in a very heated market that seems to suffice a lot of prospective purchasers that the location is a lot more important than the improvements.

    Now when your perimeter drains need to be replaced and the yards resemble the Battle of the Somme, or a wharf rat runs across the yard during a garden party at your new home you can quickly explain that you bought for location and your guests can go back to eating their Coq au Vin.

    Appearances are important to a lot of people and many professions. A doctor or university professor are not likely to remain in a hood where the neighbor leaves a toilet on his front lawn as freeware no matter how close the commuting distance is to Jubillee, the university or a higher walk score.

    How about yourself? Are you willing to live in a house that is below your class standard because of a higher walk score or is the house more important to your needs. Now ask your spouse the same question. You may get a different answer.

  99. Looks like we’re still running less than half pace of Van‘s core.

    “On Vancouver’s west side, the HPI rose 19.2 per cent over the past year to surpass $2.74-million while surging 22.5 per cent to $1.16-million on the east side.”

    http://www.theglobeandmail.com/report-on-business/economy/housing/the-real-estate-beat/prices-for-single-family-detached-houses-in-greater-vancouver-hit-new-highs/article26639751/

    Makes you wonder if a 20% is in Vic’s near future? …I suppose we did reach that annual average in the past two cycles…‘87-94 and ‘01-08.

  100. Winter December 21-March 19
    Spring March 20 -June 20
    Summer June 21- September 23
    Fall September 23 – December 20

    Not much difference between this and using quarters. Traditionally quarters are used in analysis. Most of our lives are regulated by the seasons but that may not be as evident with office workers and those living in hot climates.

    Anyway Victoria doesn’t have the traditional four separate seasons like most Canadians experience.

  101. There are several more permits needed from both provincial and federal levels. It will never get past the environmental stage.

  102. I don’t really see many differences in the overall indications of the market using HPI or Teranet or medians. Once you average out the noise the message is the same

  103. You should be trying to time the new moons as well Jack. Many stock traders use the lunar calander as a guide and it is uncanny how sometimes it marks a change in direction in the markets. Maybe the super-moon eclipse got Victorians all jacked up and we’re now in for a change in sentiment, especially if the financial markets volatility keeps people on edge. The US jobs drop was a surprise to the markets and may delay interest rate hikes but also proves that the problems are not over for the US.

  104. I was re-thinking the use of 500, monthly or quarterly sales and instead using the four seasons Spring, Summer, Fall and Winter. … Since a lot of the housing market is psychological using the seasons instead of arbitrary dates may provide a more meaningful analysis.

    The beginning of each season is defined by an astronomical observance (equinox or solstice). I would argue that the “perceived” season has a different timing in Victoria. For example – it feels like winter from mid-November through early-February. By late February, daffodils are blooming and trees are budding – it’s spring again. By late May, it’s often just as warm as in July – so summer must be already beginning. Etc …

    I think that the buying/selling patterns in real estate often revolve around the the school year and vacations. Every April and May, there’s a flood of new listings. Many people want to buy/sell before summer holidays and definitely want to move before the new school years begins in September. Sales grind to a halt over Christmas and New Years’.

    I think that the quarterly sales (January though March, April though June, July through September, and October through December) is probably as accurate as any method.

  105. Maybe the First Nation’s are raising a trial balloon. Propose an LNG plant and get the public in an uproar and then switch to residential development. All of a sudden residential doesn’t seem so bad.

  106. I was re-thinking the use of 500, monthly or quarterly sales and instead using the four seasons Spring, Summer, Fall and Winter.

    Since a lot of the housing market is psychological using the seasons instead of arbitrary dates may provide a more meaningful analysis.

    Approximately these are the dates

    Winter December 22 to March 19
    Spring March 20 to June 20
    Summer June 21 to September 22
    Autumn Sept 23 to December 21

    Do you think buying habits are affected by the seasons?

  107. Ditto. I liked the residential option that was proposed in the 1990’s …

    The Bamberton cement plant created in 1904 was shut down in the early 1980’s: http://www.bambertonhistoricalsociety.org/history.htm

    https://youtu.be/ScWpBDG7vTY

    There’s been lots of ideas proposed over the years. From a post on VibrantVictoria in 2006:
    In the late 1980s it [Bamberton] was proposed as the site of an aluminum plant and in the early 1990s, an innovative, environment-conscious residential development with nearly 5,000 homes and plans for 1,400 more. But local residents felt bullied by the high-pressure developer (Greystone Properties, fronting for four union pension funds), and worried by the added pressure on the already overtaxed Malahat Drive, the narrow bottleneck connecting them (and the rest of Vancouver Island) with Victoria.

  108. I don’t think there will be a plant there either but it sounds like you have better information than I do.

    I actually liked the residential proposal for Bamberton. Some politician didn’t get an envelope.

    Her Majesty The Queen vs. Shambrook Hills Development Corporation also known as Sun River Estates Ltd (Sooke, BC)

  109. Thanks. That chart indicates a strong 2015 sellers market to me. Very high sales to relatively low inventory.

  110. I’ll admit David, I thought we would have seen more of a seasonal slowdown by now, especially with some of the recent economic fears… maybe certain pockets have slowed a bit. I’m now more concerned that things could go ballistic next Spring as the broader economy strengthens.

    TC headline is asking the right question… will pace continue or will we see typical winter lull?

  111. What is the SF median price in the core yoy for September?

    Unfortunately, the year-over-year monthly comparisons tend to vary a lot. (For example: compare the three month trailing median to the monthly median in the table below.) Additionally, as it is a monthly “snapshot” taken each year, inflation should be factored in.

    Just Jack has previously suggested that comparing the past 500 SFH sales would be a more accurate way to go – but I do not have access to this data. Leo tabulated data to include a 12-month trailing median which (if inflation-adjusted) may be a more accurate approach – as it allows a much larger sample size and removes seasonal variability. However, looking at a year at a time also excludes analysis of seasonal or monthly trends.

  112. What is the SF median price in the core yoy for September? Wouldn’t that be a bit more telling than last month vs. this month averages? The differences from month to month seem pretty unreliable predictors of a trend, other than a seasonal variation, given the number of sales, but I may be wrong.

    Seems like the aggregate HPI for Victoria puts September 2015 6.85% higher and September over August this year up .27%.

    The HPI aggregate is up only .61% overall from five years ago. So much for that HELOC! Toronto; however, is up 48% in the same timeframe.

  113. I guess you could say townhouses aren’t doing much…but that makes sense to me with the boomers and millenials driving the markets… I think.

  114. Dropping prices??

    From VREB:
    SFH Core 0.6% LM 8.7% LY
    Condo GV 1.2% LM 5.1% LY
    TownH GV -1.7% LM 0.6% LY

    Benchmarks are far more accurate than averages. One multi-million sale can throw averages for a loop.

  115. I don’t put any stock in monthly price fluctuations because they can be +=$50,000 from month to month.

    I’m only interested in the long term trend and in the market conditions. I don’t believe it is possible for prices to plateau or drop in a buyers market. I have some graphs on this maybe will write up a post.

  116. I guess it depends on your definition of heating up. Sales volumes are definitely up, but average prices for houses, condos and townhouses are all down from September last year while houses and condos are also substantially down from August 2015.

    To me, dropping prices suggest that that the market is cooling down. To you, increased volume means that the market is heating up. According to VREB analysis, we are “in sellers’ market, where there is upward pressure on prices“. So why are we seeing the exact opposite?

  117. My bad … I was looking at August new listings:
    2013 – 935
    2014 – 904
    2015 – 952

    I’ve updated the original post … Thanks for keeping me honest!

  118. What?

    By your posted information, in the Western Communities there were 2 more sales this September than last under $600,000. There were also 13 more over $600,000. There was a particularly big jump up in the $700-800,000 sales category.

    In the core there were 12 fewer sales under $600,000, but far more over $600,000 than last September and than in the Western Communities. The jump up was also particularly noticeable in the $700-800,000 category.

    The only thing I get from this data is that the market prices are likely higher, particularly in the core, and sales volumes have increased YOY.

    I don’t see any correlation with your assertion that families are moving out of the core and businesses going with them. Haven’t noticed a particular lack of families in the core areas myself, except for downtown which has never had a big family presence.

    As far as I can tell, the competition by families for homes in the core seems pretty fierce right now.

  119. There are several sub markets that are included in the board’s data. It may be interesting to look at a frequency table just for the single family market for the core.
    Sale Price- 2014- 2015
    $0 – 200
    $200 – 300 2
    $300 – 400 10 5
    $400 – 500 32 28
    $500 – 600 48 45
    $600 – 700 26 30
    $700 – 800 19 28
    $800 – 900 11 14
    $900 – 1,000 2 10
    $1,000 – 1,250 8 9
    $1,250 – 1,500 4 7
    $1,500+ 5 2

    Comparing year-o-year the number of houses sold in the core is down from the year before in home prices under $600,000. The sales activity is predominantly for houses in the $600,000 to $1,000,000 range.

    The notably large increase in year over house sales is not in the core districts – its in the Western Communities.

    Sale Price-2014-2015 (September)
    $0 – 200
    $200 – 300 5 3
    $300 – 400 20 18
    $400 – 500 24 27
    $500 – 600 13 16
    $600 – 700 9 15
    $700 – 800 1 5
    $800 – 900 2 2
    $900 – 1,000 4
    $1,000 – 1,250 1
    $1,250 – 1,500
    $1,500+ 1

    It comes down to selection. For a young family the core is too expensive. It isn’t an option for a family of four or more to live in the small homes in the city priced under $600,000. They’re leaving. And with them go businesses.

  120. New listings down, inventory down, sales up. By all counts the market is heating up. In fact looking at your first graph the rate of heating might even be speeding up.

  121. “The 952 new listings added during September is an increase over the previous two years, such that if this trend continues through the fall – the active listings may start to go up again.”

    2013 – 1106
    2014 – 1099
    2015 – 962

    We need to go back to 2003 to find a September with fewer listings.

  122. CHEK is just parroting the VREB report, and VREB is in the business of selling real estate. My analysis is based off VREB’s statistics.

    My opinion is that the increase in sales volume of cheaper houses is a combination of pent-up demand combined with low rates. It’s also my opinion (based on listings in my PCS accounts) that good quality starter houses are in short supply, so I expect a lot of fixer uppers are being purchased.

  123. Wow, someone^ is really trying to talk the market down!
    VREB & Chek News say up 8.7% benchmark (up 8.2% median). The market continues to strengthen and prices are accelerating.

    It must be the stock market and recession that are holding back this market 😉

  124. Good research David. Looks like distribution of a topping market. Prices should be exploding with such low inventory and the pros touting affordability never being better.

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