Welcome to househuntvictoria.ca

As you may have noticed, visiting househuntvictoria.wordpress.com now redirects you to househuntvictoria.ca.
The new site will give us complete control to customize the site without the wordpress.com restrictions. Bear with us while we learn about wordpress and what to improve, but right off the bat there are some goodies.

New features:

  • Comment form on top of the comments.  Given we now have new comments on top, it makes sense to put the form on top as well.
  • Ability to edit your own comments for 5 minutes after you post them.
  • Ability to run any custom code on our site, such as the dynamic data page.
  • Ability to embed said custom code into posts such as:

If you notice anything not working or that should be improved, please comment.

Also a Monday market update from Marko Juras.

December 2015
Dec
 2014
Wk 1 Wk 2 Wk 3 Wk 4
Unconditional Sales 124  244 356
389
New Listings 125 261  374
419
Active Listings 2797 2734 2631
3210
Sales to New Listings
99%
93%  95%
93%
Sales Projection 479  451
Months of Inventory

8.3

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94 thoughts on “Welcome to househuntvictoria.ca

  1. Interest rates (bond yields) fell in half ‘81-85, same as they did ‘11-15… both periods saw bonds rally hard. 20% nominal sounds like a lot but it’s all relative to what inflation is doing. Real interest rates are what matter for RE.

    The loonie fell from well above par in 1976 to ~69 cents nine years later. The loonie peaked 2007 and it will likely test the same 69 cent area in the new year.

    Don’t be one of the losers 😉

  2. My guess is Canada’s market will become more fragmented like the US in 2016. Some cities in the US (and now Canada) are experiencing no appreciation. Many will find it confusing how towns like say Tumbler Ridge (where prices may be cut fully in half by the new year) can coexist in the same province with say Vancouver that’s up another ~15%. The mystery is solved by realising we’re on a similar path as the 80s for the whole shebang… currencies, resources, migration patterns, bonds, equities, demographics, RE… For instance, the same few cities that led then are leading now. And sure, a difference this time is that Van didn’t quite see the magnitude of correction as it did 1981-83, but the average house did drop ~$200,000 between 2011-13.

  3. We’ve haven’t had an active list count this low in 10 years (2005).

    Thanks for the #s Marko. Interesting how the same thing is happening in Seattle, Vanc, Portland…

    The Seattle area, which is experiencing its worst shortage of homes for sale in over a decade, has seen gains in home prices accelerate since January, when the average price was 6.8 percent higher over the year. October’s 8.8 percent annual gain was the highest yet this year.

    http://www.seattletimes.com/business/real-estate/seattle-area-home-price-gains-keep-accelerating/

    …and Jack, it has more to do with larger-than-expected inventory draws starting 11 days ago …before winter hit the east yesterday.

  4. I suspect it has more to do with the ice storms in Southern Ontario and cold temperatures in the USA.

    But don’t let me stop you from buying more stock. Please buy more!

  5. So why was… Natural gas up 32% in the last 10 days … a stimulating & thought-provoking move

    Mostly just impressive how quick & dramatic a move… nearly 40% in 11 days. Leads me to believe that was a major bottom. Not that it matters much for Vic RE, but it may be good news for our gov’t coffers going forward (NG affects us somewhat as there’s alot of it produced in BC).

  6. I suppose back to 150 would be bad)

    Back when oil was that price we heard about all those wealthy Fort Mac workers that were going to drive up Victoria prices because they all live in Victoria and fly to camp.

  7. …not that it matters whatsoever for Vic RE where oil goes

    So why was:

    Natural gas up 32% in the last 10 days … a stimulating & thought-provoking move

  8. Oil back to ~90 before 2020.
    In a few years we can look back upon my forecasts with graceful admiration 🙂

    (…not that it matters whatsoever for Vic RE where oil goes…well, I suppose back to 150 would be bad)

  9. Real-Estate Blues Bring 6th Straight Drop in Canada Confidence

    Canadians are starting to lose faith in their housing market.

    “Younger, heavily indebted families in Vancouver and Toronto pose a risk to Canada’s financial system because they may become unable to meet obligations in the event of another economic shock, Bank of Canada policy makers said this month.”

    http://www.bloomberg.com/news/articles/2015-12-29/real-estate-blues-bring-6th-straight-drop-in-canada-confidence

  10. Tue, Dec 29, 2015 8:35:

    Dec Dec
    2015 2014
    Net Unconditional Sales: 436 389
    New Listings: 429 419
    Active Listings: 2,552 3,210

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

    We’ve haven’t had an active list count this low in 10 years (2005).

  11. I find it interesting when you look at the path of one of BC’s most important commodities, it becomes obvious how little effect it has on Vic’s RE market. Northeast BC would be a different story. I bet gas & coal prices are putting the ‘tumble’ in Tumbler Ridge prices.

    Anyway it’s looking like a double ($4.50) within a year or two with tighter supply-demand fundamentals going forward.

  12. What you fail to grasp LeoM is that China’s growth is in serious decline from expectations as they were the main driver behind the global growth and commodities boom of the 2000’s which has now crashed in spades. Not to mention China’s financial system is built on a house of cards and ghost cities.

    As far as retirement in Canada for Asians I would like to see your stats. You have to immigrate here before you can retire and takes years.

    As far as corruption goes, it’s rampant.

    IMMIGRATION MEGA FRAUD: Rich Chinese immigrants to Canada who don’t really want to live there

    “The case of Xun “Sunny” Wang, a Vancouver-area consultant jailed for masterminding the biggest immigration fraud in Canadian history, is startling in scope.
    Wang, 46, who was sentenced on October 23 to seven years in prison, conducted his fraud on an almost industrial scale, as he helped rich Chinese clients maintain Canadian permanent-resident status and later obtain citizenship.”

    “That anyone should immigrate to Canada while regarding living there as a burdensome task to be endured or avoided might sound weird, but the concept is so common among some Chinese immigrant circles that there is a word for it: yiminjian, or “immigration jail”. The term refers to the period of compulsory Canadian residency (now, four years out of the previous six) which one must suffer before applying for citizenship. Think of a Canadian passport as the get-out-of-jail card.”

    http://www.malaysia-chronicle.com/index.php?option=com_k2&view=item&id=607575:immigration-mega-fraud-the-rich-chinese-immigrants-to-canada-who-don%E2%80%99t-really-want-to-live-there&Itemid=2#axzz3vda6ADsZ

  13. I think it’s always risky to buy real estate you can’t afford. In Victoria right now, if you can afford it, I don’t see it as the riskiest time to buy. I also think it’s a good time to rent as rent is relatively affordable in Victoria. Buying has big benefits but only do it if you can afford it not because of peer pressure… Waiting for a crash is a fools game though. Focusing on what you can affect is better. Save more, invest more, improve your income prospects etc…

  14. I know Hawk prefers to cherry-pick negative statistics about the economy; like the ‘fact’ that China’s economy is crashing. What he fails to mention is the comparisons to other major economies, so I’ll post the information that Hawk won’t. China is still booming Hawk and that Hot Asian Money (HAM) you keep insinuating is coming from crime and corruption, is in fact coming from hard working Chinese immigrants who are retiring to Canada.

    http://www.bloomberg.com/news/articles/2015-12-28/china-s-slowdown-in-context#media-6

  15. The not-smart money always sells at bottoms, after which the smart money begins buying

    I’ve been pondering if I should reduce my canadian allocation because I think we’re a ways off the bottom… but then I remember I don’t know shit about where things are headed and I’ll just stick with my one third Canadian, US, and international.

  16. dasmo, did you like this part ? Buying over priced real estate while the Fed does an “experiment” in “uncharted territory” is high risk IMO. But never mind, hyper inflation will never happen…..because it just won’t. 😉

    “After six years of near-zero interest rates, the Fed is in uncharted territory. Never before has a central bank attempted to raise rates after having provided so much stimulus and expanding its balance sheet to such a degree. The legacy of the Fed’s quantitative experiment is largess to banks and funds that will likely total $24 billion in 2016.”

  17. Same as the smart money that claimed the commodities boom is on back beginning of October? 😉

    Energy experts calling for $20 oil or lower.Tanker build up is insane. Many oil companies will go under this year and decline is far from over.

    How was dumb money selling resl estate in 2013? Most would be moving up or down, unless they were leaving town. Money leaving Canada is another matter, and a huge sign of another down year for TSX and loonie.

  18. Money Flooding Out of Canada at Fastest Pace in Developed World

    That would be the not-so-smart money…

    domestic mutual-fund investors have pulled money from Canada-focused funds and plowed it into global choices for six straight months

    …meaning our financial markets are bottoming. The not-smart money always sells at bottoms, after which the smart money begins buying… same as Victoria’s RE market in 2013.

  19. Totoro, I suppose the proof is in the numbers. Over the course of the year we have experienced a 20 percent increase in sales but that has not been distributed evenly among all income groups. When the board publishes the change in the median and average for the two Decembers, you’ll have to decide if they are a reasonable indicators of how prices have actually increased or have they been skewed due to an abnormal distribution in the sales.

  20. Some real estate lawyers will charge $100 to review a contract, I’ve even seen lawyers not charge anything if their client (seller or buyer) is using them for conveyancing.

    Yep when we were buying I found an old VREB offer form online and used that. Ran the offer by the lawyer first, he didn’t charge us anything.

  21. There is a lot of emotion and assuring the parties in these deals. Having the agent as a buffer between the parties can stop a lot of misunderstandings of what each party thinks the other one is saying. I also think the benefit of a real estate agent over a mere listing is having someone knowing when to close the deal. At some time in the negotiations you have to know when to say…

    You must be watching way too much Million Dollar Listing New York/San Fran/etc.

    Misunderstandings? Very simple, “Subjects to seller’s [or buyers] lawyer reviewing and approving the contract of purchase and sale by …………………….. This condition is for the sole benefit of the seller.”

    Some real estate lawyers will charge $100 to review a contract, I’ve even seen lawyers not charge anything if their client (seller or buyer) is using them for conveyancing.

    Knowing when to close the deal? lol……not how things work out in the real world. Negotiations don’t happen via cellphone over lunch.

    I will admit that business individuals, or just generally savvy individuals, do accel at mere postings. I’ve also had a lot of lawyers over the years do mere postings on their personal homes.

  22. So you are then saying that a realtor should be able to do better than a mere posting? i.e. they can sell the place even if it isn’t selling on MLS at the same price?

    Should…….but guess what, homes sell at market value whether it be a mere posting or full service. This year on the listing side of my business I did 60 transactions (33 sold full service, 27 sold mere posting). I would be lying to my clients if I told them I can get them more with my full service option. Difference between mere posting and full service is how much work and how comfortable you as the seller are in terms of taking on some of the work of selling your home. And how much is it worth to you?

    I equate it to my WordPress website. I put it together 5 years ago myself and then 4 years ago my website got hacked. I spent a couple of days (I am not a computer person) and a lot of stress going through the code to fix the problem but eventually I fixed it, upgraded my security apps, etc.. My website got hacked again earlier this year. I paid a US firm $399 to go into the website and deal with problem/code as I felt it wasn’t worth my time/stress to do what I did 4 years ago.

    If it was $999 to fix the problem I would have done it myself again.

    Mere postings make a lot more sense the higher up the real estate food chain you go. A $800,000 home makes a lot more sense (10k+ savings at least) to do a mere posting on compared to a $200,000 condo (less than 3k savings).

  23. Increasing down payment on rental properties from the current 20% would likely be a tax shift more than anything. I put down only 20-25% on my rental properties by design as the interest is tax deductible; whereas, interest is not tax deductible on my personal home. My personal home mortgage is the one only one I am paying down (in addition to monthly payments) after RRSPs and TSFAs are maxed out.

    If the down payment went up on investment properties I would need to leverage my personal home more. Really a small amount of tax savings would dry up but that is about it.

    I would guess a lot of real estate investors, at these prices, have half decent equity in their personal home to increase the down payment on an investment property.

    That all being said, highly unlikely to happen.

  24. What it actually says in the article…..

    “Mark Harris, of mortgage broker SPF Private Clients, predicted that “the market is moving towards a situation where only those with a 50pc deposit are likely to qualify for a loan.”

    Barclays has been among the first lenders to move, dramatically raising the application criteria for new borrowers earlier this week.

    Where previously Barclays required landlords to have a rental income of 125pc of the monthly interest, calculated at a mortgage rate of 5.79pc, it has increased this to 135pc at 5.79pc.”

  25. Looks like like the UK banks are changing mortgage rules for landlords. This would be devastating in Canada. Of course it won’t happen here, it’s Victoria after all.

    ‘Buy-to-let investors will need 50pc deposit – or no mortgage’

    In future only investors with hefty deposits will qualify for loans, brokers warn, as Barclays cuts buy-to-let lending

    “A lending clampdown is also potentially devastating for existing investors.
    This is because many landlords will find themselves unable to remortgage when their existing deals come to an end – leaving them locked into high rates, potentially losing money month after month as rents fail to cover mortgage costs.”

    http://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/12027732/Buy-to-let-investors-will-need-50pc-deposit-or-no-mortgage.html

  26. “My position comes from experience totorro, not bias. You are the one who is biased because you are carrying major leverage that could wipe you out should credit markets or a variety of other global financial disasters go south. I have seen prices go down 20% to 50% several times. When were you in those markets ? You weren’t.”

    Fact-less speculation on your part. We’ll be just fine in any market thanks. And I have no particular interest in anything as if prices rise we may one day sell one place – or not – they have risen and we are not selling. If they decline we’ll buy.

    And JJ, I disagree with your presentation of “prices being skewed” by more sales in the 600-800k range. If prices have increased, which they clearly have looking at the medians, there will be more houses over 600k than there used to be.

    The mode doesn’t tell us much imo – except that this is the most frequently occurring number in the bunch. It is the yoy medians, or perhaps benchmarks, which give a better picture of the market.

    My best guess is that prices will continue to increase a bit more this coming year, although this could be moderated by all sorts of factors excluding boredom of prospective home purchasers. I think there will be a lot more to choose from in the spring though.

  27. It’s getting close to the end of the year. How about some medians in the core for detached homes.

    Victoria 448 house sales ranging from $293,000 to $2,800,000. Median at $593,750
    Up 7%

    Vic West with 29 house sales from $303,500 to $824,000. Median at $475,000
    Up 3.8%

    Oak Bay with 325 sales from $485,000 to $7,530,000. Median at $865,000
    Up 11.1%

    Esquimalt with 106 sales from $290,000 to $1,825,000. Median at $526,000
    Up 7.6%

    View Royal with 106 sales from $320,000 to $2,398,000. Median at $562,000
    Up 7.9%

    Saanich East with 886 sales from $280,000 to $3,400,000. Median at $653,500
    Up 8.9%

    Saanich West with 372 sales from $250,000 to $2,025,000. Median at $525,000
    Up 2.9%

    As for all of the core districts.

    The best chance to sell your home was in May when 284 houses sold in the core. The least number of sales in a month were in January or possibly this month with under 100 sales.

    This year marked the highest median price for core homes in the history of the world at $629,000. The second highest was in 2010 at $601,000

    The only area to buck that trend was View Royal and Saanich West was 2010 at $586,500 and $532,000 respectively.

    The most active price range for the core was in the $500,000 to $600,000 with 23.5% of all the sales. The biggest year over year increase was in the $600,000 to $800,000 range with the number of sales increasing by 41 percent over last year. That’s what skewed the median price higher for the core while the mode remained unchanged from last year at around $600,000.

    My guess is that the $600,000 to $800,000 price range will revert back to levels seen in the past decade and we’ll see the mean and the median begin to decline in 2016. That will cause the months of inventory to rise to a more balanced position and the days on market to increase as well. We may not have significantly lower prices but there will be more selection for prospective purchasers in the core districts for houses. Ceteris paribus

    https://youtu.be/pQjqxayxwt4

  28. There is a lot of emotion and assuring the parties in these deals. Having the agent as a buffer between the parties can stop a lot of misunderstandings of what each party thinks the other one is saying. I also think the benefit of a real estate agent over a mere listing is having someone knowing when to close the deal. At some time in the negotiations you have to know when to say…

    “Will that be cash or mastercard?”

  29. If you do decide to hire an appraiser you should understand the difference between a current market valuation and a prospective valuation to estimate the anticipated sale price in the next 90 days.

    The first is what lender’s rely on to set a mortgage. It is based on sold properties within the last 90 days or so. The valuation is looking back in time.

    The prospective valuation has the appraiser look forward into the next 90 days. That requires some judgement calls by the appraiser of what is reasonably likely to happen to home prices in the next 90 days. This is consistent with what a real estate agent is doing.

    In my opinion this is why some real estate agents’ say that appraiser’s are conservative as the mortgage reports look back in time and are not considering the most current and most likely future marketing conditions.

    The appraiser should also estimate a market value range for your property. Depending on your motivation you may want to list at the lower end for a quick sale or hold out longer for a higher price if the market is rising. The appraiser should also give you his/her opinion of the value that would be fair to both buyer and seller under normal marketing conditions.

    I would guess that almost all of the appraisal reports Marko has seen are mortgage appraisals. Since the appraiser is called in after the property has an accepted offer to purchase. They tend to be inexpensive reports with little to almost no detail except for 3 sales illustrated in a simple chart and a point in time value. Frankly they are shit reports done for speed so the lenders can look at the value and then file the report.

    I strongly suggest that you as the consumer interview the appraiser and speak to them about your concerns and NEVER simply order an appraisal online or use a middle man such as an Appraisal Management Company (AMC) out of Toronto. And I say that as an appraiser that works for AMC’s.

    Ironically the price difference between an AMC report with little detail and a report ordered by yourself is minimal. Simply because the AMC takes one-third to a half of the appraisal fee for being the middle man. The AMC appraiser takes these jobs because they are quick to do, low liability and he/she can hire up to 8 appraisal students to do most of the work with the designated appraiser reviewing the report. Lots of volume at low prices.

  30. If the mere posting truly isn’t working then a full service realtor should be able to sell it at the same asking.

    So you are then saying that a realtor should be able to do better than a mere posting? i.e. they can sell the place even if it isn’t selling on MLS at the same price?

  31. “Thanks good point about commission, if the market is hot it seems like money wasted. Sold my first house in spring 2005 in 3 hours a full commission think I would learn.”

    If I was a seller this would be the sequence of steps I would take.

    i/ Call three or more high-producing (50+ sales/year) REALTORS® for a market evaluation. Higher performing sales volume just means that they’ve probably been through quite a few homes that sold in Broadmead recently so their comparables might be a bit more accurate. By the way, don’t feel bad doing this as we all advertise “free market evaluation,” all over the place.

    i.b/ You can also hire an appraiser if you really feel inclined; spending $250 is a small expense on that size of asset and can’t hurt.

    ii/ Let’s say for discussion purposes the appraiser and the three REALTORS® come in with an average of $900,000.

    iii/ Place the home on usedvictoria.com for $879,000, for example, and buy the “Top Ad” for a week. It is around $33. This is your best non-MLS® chance of selling. Also do Kijiji, Craigslist, etc. Key is because you are not paying any commission, discount the price a bit. What I see 100 times a year is people go on usedvictoria.com for 500k, for example, two weeks later I see them with a full service REALTOR® for $479,000….doesn’t make any sense!!!!

    iv/ If usedvictoria.com doesn’t work do a mere posting, offer a half-decent cooperating commission, list at $899,900.

    v/ If it doesn’t sell at the at point you need to drop the price, for example. Sometimes people get into the trap of thinking the mere posting isn’t working and then they re-list with full service at a lower price….makes no sense. If the mere posting truly isn’t working then a full service realtor should be able to sell it at the same asking.

  32. Thanks good point about commission, if the market is hot it seems like money wasted. Sold my first house in spring 2005 in 3 hours a full commission think I would learn

  33. I made up a frequency table for house sales in $800,000 to $900,000 range in Broadmead covering the last 5 years. I would disregard 2015 as it was such an odd year. The data seems to show the best market in your neighborhood and price range has been February and April. I’m disregarding 2015 because it likely was a one-hit-wonder year with the election.

    Sales, Number of
    Month 2011-2012-2013-2014-2015
    Jan 1 1 1
    Feb 1 1 1 3 1
    Mar 2
    Apr 2 2 1 2
    May 4 1 4
    Jun 2 2
    Jul 1 1 1
    Aug 2 1 1 1
    Sep 1 1
    Oct 1
    Nov 2 2
    Dec 1

    That likely makes sense as your property is an expensive home being above the median home price. In the winter months of December through February listings tend to be low. In the spring demand historically increases. That means listing in the market near the end of the winter season with low inventory just as demand is starting to increase in the spring.

    Other one-hit-wonders include…

    https://youtu.be/rog8ou-ZepE

  34. Given you foresee a potential leveling off of prices my question is as I plan to stay in the core Saanich East, Oak Bay or Cordova Bay in a SFH does it really matter to me if prices level off or even drop a bit as all SFHs in the mentioned areas should rise and fall in unison?

    No it doesn’t matter unless there is a big lag between when you sell and when you buy.

    More important is keeping the transaction costs down. You’re already going to be paying $15,000 in property transfer tax, so might as well save where you can on realtor commissions. On the traditional model (6% on the first $100k, and 3% on the rest) you would be paying $28,500 in commissions. Plus legal fees and you could be out $45,000 to switch houses. Maybe buy a nice 3 series BMW and keep the place? 🙂
    If the market remains hot in the spring, the place will sell itself, so either go flat fee listing if you’re ok with doing some legwork by yourself, or at least use a discount commission realtor.

  35. @Just Jack, thanks for the info! My house is 4 bedroom 2500ish sq ft on a 15000 sq ft lot. Place was fully renoed in 2006-7 great house just not our dream home I expect to list around 850000. Given you foresee a potential leveling off of prices my question is as I plan to stay in the core Saanich East, Oak Bay or Cordova Bay in a SFH does it really matter to me if prices level off or even drop a bit as all SFHs in the mentioned areas should rise and fall in unison? I am not using my home as an investment vehicle and I have my current house all most paid off, so if I sell my current house past the peak what do I care if the house I am buying is in the same situation or is my logic flawed? Time on market, I think, will be my biggest concern. Everyone feel free to weigh in.

    Thanks

  36. “How long can you hold onto an unreasonable and biased position? What is sustaining this incredible compulsion to demonstrate that the market is doing something it isn’t or hasn’t or, logically, is unlikely to do? ”

    My position comes from experience totorro, not bias. You are the one who is biased because you are carrying major leverage that could wipe you out should credit markets or a variety of other global financial disasters go south. I have seen prices go down 20% to 50% several times. When were you in those markets ? You weren’t.

    Logic comes from experiencing friends and associates going bankrupt because of the financial world getting thrown a curve ball with lost jobs, extended credit problems,etc, not maxing out my credit and say it’s going to infinity and beyond in a city with limited job growth except for low paying tourism and cyclical tech, and construction jobs. To think it can’t happen is being more than naive.

    Again, you have major skin in the game so you will never ever want to ponder a downturn and if it does you will keep saying all the way down “it’s just a blip”. Ignoring the historical Canadian debt bomb and all the other financial warnings from CMHC, Bank of Canada, major international entities, etc etc is your choice, but to say I have no case is utter bullshit. The red flags are everywhere.

  37. Primary Year Sale Price, Median for the Core, Western Communities and Peninsula
    2005 $412,000
    2006 $453,500 up 10% from the year before
    2007 $512,375 up 11.5%
    2008 $535,000 up 4.5%
    2009 $535,000 ZERO
    2010 $575,000 up 7.5%
    2011 $560,000 down 2.5%
    2012 $545,000 down 2.5%
    2013 $532,500 down 2.3%
    2014 $543,840 up 2%
    2015 $575,000 up 5.7%

    Looking back over the last decade at how single family home prices have changed it looks like prices may have peaked once more in 2015. I don’t think we will sustain the 20 percent increase in sales that we had for most of 2015 as any stimuli created from the election year is over.

    I suspect sale volumes to slow down in 2016 which will allow inventories to increase and move the market into a more balanced position between buyers and sellers. Prices will likely moderate lower by 2.5%. Simply because local buyers are strapped to move up the property ladder after all you can’t get blood from a stone.

    On the local economy, everything is getting more costly these days. Imported goods, food, utility rates, property taxes are all going up. That will raise unemployment and possible lower vacancy rates as people move to lower cost housing. Although we don’t have a rental crisis in Victoria. There are plenty of available rental properties if you are empty nesters. However families needing three or more bedrooms have a harder time.

    I suspect prices not to change significantly in 2016 (2 or 3%) but there will be more selection for buyers and longer days to market properties. The outlying areas will continue to degrade into shallower markets with fewer sales occurring. We might see the wave of parachute purchasers slow down as Albertans’ fortunes fade. The falling loonie means the foreigners that parked money into real estate in Vancouver have lost money on the exchange and I suspect that may cause them to sell and buy in more stable countries like the one south of us.

  38. Chief said: “Question for those that follow the market closely. I live in Broadmead but want to make a move. When should I list January, April or am I too late? Listing in mid 800s or higher and making a lateral move or just a bit up. Thoughts”

    Well Chief, the problem is that I know nothing about your property. My original thought was to “benchmark” the most prevalent property in Broadmead in terms of house size, lot size and age and use that information.

    Over the last 500 listings in Broadmead that ended up as 2,780 square foot home on a 12,200 square foot lot built in 1986. Then I expanded the parameters for that property to properties having from 2,380 to 3,380 finished square feet situated on 9,000 to 15,500 square foot non water view lots. Well only one in every three properties fit that description in Broadmead. A 1 in 3 chance that I’ll get the analysis right for you. That in my opinion is not good enough.

    What gives every property value is what the property is physically composed of. Except for renovations, that rarely changes with time. However price is forever changing with time.

    Without knowing the physical aspects of the property I can’t track demand for properties like yours, to tell you if the market is in your favor or the prospective buyers. And then make a reasonable forecast for the next 90 days. The further out the forecast the more inaccurate that forecast becomes.

    What you probably need is a current market valuation of the property including an estimate of economic rent, along with an estimate of the anticipated selling price three or so months from now. That requires a market study for your specific property in terms of months of inventory, the rate new listings have been coming to the market, the rate they have been selling and then looking back over the different winter and spring markets to determine what historically has happened to sales and listings in the upcomming three or more months. In order to anticipate how the current market value will most likely be affected by changing demand and supply.

    That might no be a bad idea because if you found your dream home and have not listed or sold your present home then you’ll need to get a form of bridge financing or lose the chance to buy the home. That requires a current market valuation appraisal and estimate of the property’s economic rent. If you’re thinking about making a change then you should be speaking with your banker soon to find out about porting your mortgage and penalties.

    You should order the appraisal yourself and not have lender use an Appraisal Management Company (AMC) from Toronto. So that you and the Appraiser have the same understanding of what is the intended use of the appraisal. Those AMC’s are nothing but shite, you won’t get a copy of the report and it will cost you 2 or 3 times more than ordering the report directly. In my opinion AMC’s are a rip off of the consumer. And I say that being an appraiser that works for them.

  39. Merry yuletide. Everything’s aligning for a record-breaking Spring for Vic… job growth, migration, vacancy…
    If you’re a buyer, Boxing Day is the day to get your gloves on and pen ready as price acceleration since 2013 is about to take it up a notch. It’s been 10yr up/4yr down since 1971 (beginning of the inflation mega-trend). With the last correction behind us, you may not want to wait for the next one around ~2025.

  40. Expecting 8% annual price increases based on one year is another greater fool thinking.

    I will write a post in the future explaining why the page spits out that number. In short, it’s based on past performance at similar MOI levels. May not be accurate (because the market changes all the time), but it isn’t biased in any particular direction, just an estimate based on how the market has performed in the past.

  41. “And when people move they take a piece of the Victoria economy with them — even if they commute to a job in Victoria, most of their spending will be at their new location, thus keeping the lid on job creation and housing demand here.”

    Except there is no hole left – it gets filled by someone else who is buying the house they left – or renting it. We have a seller’s market and incredibly low vacancy rates. As far as the downtown core goes, there is a problem with commercial vacancy but appears to be no problem with residential vacancies – and several new building have gone up or are being built.

    And the below the million dollar home mark has done fine. That is what medians are for – they exclude the top end. Top end homes may have appreciated more, historically waterfront has appreciated faster, but the under $1 000 000 market is very strong right now. Try finding a home in the core right now and you’ll find out.

    I am concerned about the future of commercial real estate and the downtown core. The internet and big box shopping plus the malls make it pretty uneconomic to run many small businesses in that area. E-commerce and telecommuting are reducing the need for commercial office space. I think converting commercial to mixed use might be one solution – although it would be a tax hit for the City and devalue properties somewhat as well.

  42. Hawk, you are lacking objectivity, as is Michael for that matter – only in the opposite direction.

    Reading both of your posts makes me wonder why you both haven’t gotten bored. How long can you hold onto an unreasonable and biased position? What is sustaining this incredible compulsion to demonstrate that the market is doing something it isn’t or hasn’t or, logically, is unlikely to do? We saw it in the past with info’s posts and eventually she dropped off to be swallowed up by Garth’s blog – which has proved to be dead wrong for years now.

    (Where she continues to be active – most recently posting that prices in Victoria are now down 2% from May 2010 – which is untrue according to the chart posted by Leo: http://www.greaterfool.ca/2015/12/22/ten-crazy-things/#comments).

    Do you not notice that your theories and hypotheses are on a one-way track. It is like a sales pitch. You cherry-pick one data point for one month in 2008, instead of looking at the overall trend over the last eight years. And you even state that black is white when it comes to the trend. You highlight every negative you can find and then make up some based on your views of young people getting “easily bored”, and then Michael comes on with the exact opposite approach and set of polarized theories.

    I don’t know what will happen in the market into the future except that my best guess is that long-term (ie. seven plus years) and it will go up. This is the same thing I said when I first posted here. It wasn’t incredible insight, just a look back at the way the market has performed to date long-term. If you are going to buy make sure you can hold through the cycle. Selling when prices are down is a sure way to put a hold in your net worth.

    There could be a big drop in prices, but again, a rise in rates and affordability will be what what it is now. If we were in Fort McMurray we’d be in trouble, but this is Victoria. Past big gains have already been moderated by less than average appreciation and we have a fairly stable economy.

    Prices could go up a further 8% this next year, or things like the impacts of the Alberta oil industry downturn could moderate this. People who bought recently in Alberta are having a hard time if they lost their job in the oil fields and there will be a ripple effect. Not sure how big in Victoria.

  43. What seems most interesting about the Victoria market is that while RE in the rest of the country has risen quite rapidly as might be expected as a result of the continual downtrend in interest rates, Victoria has been almost stagnant for 7 years (+11% nominal, -1% real).

    Furthermore, I would be prepared to bet that if you divided the market for SFHs between those above and those below, say, $1 million you’d find that the upper end has risen quite sharply, while the much larger (by number of units) lower-end has actually declined more than the overall market figures indicate.

    Why? Because there appears now to be a substantial trophy home market along the Eastern waterfront and adjacent areas. Just drive down Lansdowne Rd from Cadboro Bay to Beach and see what I mean — half a dozen large (6-10,000 square feet) new houses built in the last couple of year and several more under construction.

    The reason that the below $1 million sector of the market has not done well is almost certainly because there are so many much cheaper nearby communities where people currently based in Victoria can move. And when people move they take a piece of the Victoria economy with them — even if they commute to a job in Victoria, most of their spending will be at their new location, thus keeping the lid on job creation and housing demand here.

    Unless Victoria can rev up the economy, especially downtown, this trend will continue for a long time to come. But what’s to stimulate the Victoria economy? This is mainly a town for public sector employees, working for a government that takes a dim view of public sector pay raises, plus the service sector workers who feed off the public sector employees.

  44. LeoS,
    I agree medians are up some based on your chart, but the 30K difference from December 2008 and now is the difference of a real estate agents take if you wanted to sell. You haven’t missed out on the monster money others have claimed like in 2002 to 2008 run with every financial assistance tool from the government which are now gone and mortgage rates headed up.

    Cheers !

  45. “People do get discouraged if they can’t buy in. ”

    Bingo. You lose the buyer, you can lose the market momentum. Younger people have shorter term thinking these days and can easily say “forget it” if it becomes a gong show of endless disappointments. With the recent reductions on some decent places I have noticed lately there is definitely some gouging going on. Smart and honest agents deter their clients from overpaying.

    Expecting 8% annual price increases based on one year is another greater fool thinking. It would only push out another large base of potential buyers who won’t qualify. This isn’t Vancouver with HAM buying up the town. Credit lenders will also be tightening up bigtime in light of the increase in mortgage fraud.

    Mortgage fraud a key threat to Canada’s financial system

    “It has come to light that institutions have been, I would say inadvertently, making mortgages to people whose income has been falsified,” said Jeremy Rudin, superintendent of financial institutions.”

    http://www.theglobeandmail.com/report-on-business/economy/housing/mortgage-fraud-poses-key-threat-in-canadian-housing-market-osfi/article27750486/

  46. Not sure how you are getting negative appreciation from the chart when it very clearly demonstrates the opposite.

    Inflation adjusted prices peaked in 2010. We aren’t quite there yet, although I suspect that’s only a matter of months before we exceed the 2010 average in real prices..

  47. “But according to the excellent chart above the rate of appreciation over the last eight years has been negative.

    And if by “over the long-term” you mean more than eight years or so then you need to remember Lord Maynard Keynes remark that “in the long-term, we are all dead.”

    Not sure how you are getting negative appreciation from the chart when it very clearly demonstrates the opposite. Stats are what they are. Go to the link posted and you’ll see the median at the start of 2007 was $451,139 while it was $564,595 on October 1, 2015. Pretty clear to me.

    The link also states:

    “If current market conditions prevail, you should expect the median single family home price to increase at a rate of about $43,000 (8%) annually.” We’ll see what happens next. Should be an interesting year anyway.

    And, exactly – life is time limited. Most people don’t want to way more than a year to buy once they are ready.

  48. Bored isn’t really the word. Like totoro says, people get bored with real estate after they’ve bought. People do get discouraged if they can’t buy in. Also people get disillusioned with RE after big losses like we saw in the states.

  49. “I don’t see a great advantage to waiting, except maybe for more inventory to come onto the market in the spring.”

    Exactly, which translates to to lower prices with more inventory. The basic laws of supply and demand. Friends of mine have decided to wait til spring due to the reasons I posted.

    Jack has posted numbers many times showing sales where people lost money from buying back 7 or 8 years ago, or some who broke even, and some with small profits. Not everyone wins in real estate.

    Time is irrelevant if the market is in panic buying mode. It’s called patience which some have but most don’t according to sales increases this year. Just because a decline hasn’t happened doesn’t mean it never will. Every other market in Canada outside of Vancouver, Toronto, Hamilton and here is down or flat. Last time I looked Canada’s economy is in the tank and BC will eventually feel the effects.

    Credit will be the story here in and in Asia moving forward IMO. The huge increase in private lenders has a dark side which will come home to roost as it did in the US.

    Merry Christmas !

  50. @Chief The traditional peak selling months are April to July. However it picks up after January. Given you are going to be looking for a new place, I’d list in early February, and then you have the full buying season to find your next place.
    I don’t see a lot of evidence that the selling time influences the price, except perhaps in the dead months of December and January.

  51. If the drop never comes and prices continue to appreciate at 4% per year on average over the long-term…

    But according to the excellent chart above the rate of appreciation over the last eight years has been negative.

    And if by “over the long-term” you mean more than eight years or so then you need to remember Lord Maynard Keynes remark that “in the long-term, we are all dead.”

  52. Where are you getting your 2008 benchmark data from? The real estate board didn’t start using or calculating this measure until 2013.

    As far as I can tell from the chart posted on this site there has been a significant upswing in prices since 2007 in Greater Victoria: https://househuntvictoria.ca/2015/10/01/september-sales-cooling-down/#comments. And the median is higher now than it was in 2008.

    Most people I know don’t get bored of looking for their first house. It might be a bit daunting at times in a seller’s market, but people are quite motivated to own when they are ready. IMO part of this is due to life being time limited and the fact that there is no certainty that prices will decline and the past shows us that, overall, they will rise in Victoria at a pace that exceeds inflation.

    What I have noticed on this board is that almost everyone who has, over the years, been waiting for and predicting a drop in prices gave up and bought or moved elsewhere – including the founder of this site and Leo.

    My view is there will be no drop unless rates rise significantly. If rates rise significantly and you need a big mortgage you’ll be no better off on a monthly basis than if you buy now. If the drop never comes and prices continue to appreciate at 4% per year on average over the long-term you will find it harder to buy later and you will not have benefited from the appreciation in the interim. This doesn’t mean everyone should buy a house but if you want to own I don’t see a great advantage to waiting, except maybe for more inventory to come onto the market in the spring.

  53. “The wait it out theory hasn’t worked out too well over the last eight years. And the “get bored with RE” comment just makes me laugh.”

    If you go from December 2008 til November 2015 the medians and benchmarks are basically identical so you didn’t miss out on much.

    Most people can be only fixated on hunting for a major purchase like a house for only so long til they lose interest, or the true costs involved begin sink in. Other life events also change the energy flow it takes in this kind of market with lousy selection, especially in the entry level places. It’s called human nature, most people aren’t OCD and repeated discouragement of bidding wars and crappy looking places eventually turns potential buyers off.

  54. “Folks simply get bored with RE. … those who have not yet bought will decide to wait for the correction to work itself out.”

    The wait it out theory hasn’t worked out too well over the last eight years. And the “get bored with RE” comment just makes me laugh. The desire to own a home only becomes a boring topic for the majority after they’ve bought.

    In Victoria I don’t see boredom setting in any time soon.

    And as far as when to list a house, I personally would wait for the spring market but inventory is so low you’d likely do well now too. If you are ready to make a move I think the bigger question would be whether your home is ready to be listed ie. repairs, cleaning, landscaping and staging. It can be a big job.

  55. Question for those that follow the market closely. I live in Broadmead but want to make a move. When should I list January, April or am I too late? Listing in mid 800s or higher and making a lateral move or just a bit up. Thoughts

  56. “Another possibility, perhaps, is a psychological crash. Folks simply get bored with RE. Everyone anxious to buy has already bought, while those who hesitated have been priced out causing the market to falter. Then, those planning to downsize will hasten to list, while those who have not yet bought will decide to wait for the correction to work itself out. Overnight, a shortage of inventory turns into a glut.”

    Makes total sense CS. If real estate is emotional as we all know it is, then a mania eventually peters out as the panic buyers get tired of looking at house after house for months on end. They wake up one day and realize it’s too draining on the nerves and depressing to keep having to get into bidding wars on over priced houses in need of $100K renos.

    As soon as the headlines say “Victoria prices go down last month” you will then see the flood of listings and the mania is soon over. Stories of friends sucked in paying $50K over are now $50K under will spread. Social media wasn’t as big last time around, and will have a much bigger effect next time the market corrects. Those who think it can’t happen are indeed the arrogant ones.

  57. Judging by the morning traffic not sure about the West Shore theory.

    Sure, the traffic indicates that many do commute and of those who work on the West Shore, many no doubt have partners who commute.

    Commuting by car in Vancouver would be hellish, but I quite enjoyed using the Skytrain when I lived there.

    If taxpayers are ever compelled to subsidize a skytrain from Colwood to downtown Victoria, the number of commuters will undoubtedly increase, with positive effect on RE prices along the line.

  58. “Already, it is likely that the majority of employed people living on the West Shore, work there too.

    The situation in a large city such as Vancouver is rather different. Commuting to cheap housing areas is much more expensive, time-consuming and stressful than it is for those who work in Victoria, thus the centre retains its attraction despite escalating RE prices.”

    Judging by the morning traffic not sure about the West Shore theory.

    Commuting by car in Vancouver would be hellish, but I quite enjoyed using the Skytrain when I lived there.

  59. One reason for Victoria’s essentially flat RE market over the last ten years, is that people have alternatives. It’s possible for those employed in Victoria to commute from the West shore, the Saanich peninsular and even Duncan, where land prices are much lower than in Oak Bay and Gordon Head.

    And, when people migrate to the exurbs, they take most of their purchasing power with them, thereby depleting Victoria’s economy and creating new economic centers elsewhere. This in turn creates jobs in the exurbs which, for many, eliminates the need for commuting altogether. Already, it is likely that the majority of employed people living on the West Shore, work there too.

    The situation in a large city such as Vancouver is rather different. Commuting to cheap housing areas is much more expensive, time-consuming and stressful than it is for those who work in Victoria, thus the centre retains its attraction despite escalating RE prices.

  60. What’s arrogant is being wrong for a decade and saying that people who own or buy are the fools.

    No, it’s not arrogant, it’s just wrong, if it is wrong — as you believe it to be based on your expectation of the future, which itself may be wrong.

    But it’s interesting to see the apparent desperation to prove that anyone negative on RE is not only wrong, but odious. Does that not signify some nervousness among the bulls?

  61. 1000 sq with 2 bedrooms 1.5 baths, wicked laundry setup, great storage in suite and at parking spot, some indoor shared play space, some shared outdoor spaces for play. That would fair well at Capital City IMO.

  62. “Hear in the Netherlands a SFH remotely close to anything is simply unattainable compared to attached dwellings.”

    It is amazing how many people who don’t travel to Europe regularly are completely oblivious to this. To own a SFH home in Europe in a half decent place to live remotely close to anything typically takes generational wealth.

    I was looking at some job opportunities back in the homeland of Croatia and the place where I want want to live (small town outside of Zagreb, kind of like Sidney to Victoria) prices are similar to what they are here (when you compare apple to apple)…..except that average salary is less than 1/4th the average salary in Canada.

    SFHs are not associated with the middle class.

    Keep in mind this is Zagreb, not Vienna, not Zurich, not Munich, etc.

  63. “Is there little demand or nothing on the market? Name one development designed for families. It’s not just more bedrooms. It’s about the facilities, proximity to park space etc.”

    For example, the Duet had 920-1000 sq/ft condos for 389k-400k range during pre-sales. 30 seconds to elementary school, 30 seconds to park.

    They were lacking the 1,200 sq/ft three bedroom for 500k but I’ll argue lack of demand for such product.

    Is living in Happy Valley driving kids to the new YMCA in the Westhills any more convenient then living in James Bay condo, for example, driving to Oak Bay rec? At least you can probably bike from James Bay to Oak Bay rec.

  64. Part of the problem is there is little demand for family condos. If you presented a young family of 4 with the option of being in a SFH in Happy Valley or a three bedroom 1,200 sq/ft condo in the Fernwood area, both $500k, majority will go for the SFH in Happy Valley.

    When the alternative SFH is $800k or too far to realistically commute, I think that will have to change.

  65. Is there little demand or nothing on the market? Name one development designed for families. It’s not just more bedrooms. It’s about the facilities, proximity to park space etc. I live in a mixed use area in a building that mixes townhouse like lower levels with condos, and lots of shared open spaces with underground parking but also some surface which also acts as playing areas. Capital City Centre is a blank slate as is perfect for this style development. But you are right no one builds it. There might be more of a market when 800k isn’t so easy to get anymore. Hear in the Netherlands a SFH remotely close to anything is simply unattainable compared to attached dwellings. I expect that in Vic, like Van that the divide will widen. Then the market will really be there.

    I do agree though, If it’s only 20 minutes driving extra then what family wouldn’t buy a SFH?

  66. Part of the problem is there is little demand for family condos. If you presented a young family of 4 with the option of being in a SFH in Happy Valley or a three bedroom 1,200 sq/ft condo in the Fernwood area, both $500k, majority will go for the SFH in Happy Valley.

    Just the way our culture is here people have multiple cars, cats/dogs, children need a “play space,” and just a lot of stuff in general not ideally conducive to condo living. Some of the feedback I often hear during showings in general (not condo or SFH specific) is “won’t work with our dog,” “not enough storage for hockey gear and other stuff,” etc.

  67. Family condo living is the norm across the globe. … better build family condos over here.

    Yes, but that would mean requiring developers and municipal authorities to provide space for things like day care centers, schools, and children’s recreation facilities in high cost down town areas. Which would be good, but it probably won’t happen, with the result that couples will delay having children and the fertility of Canadians will continue to decline (It crossed the replacement rate of 2.1, during the last Trudeau era — no fault divorce and non-enforcement of anti-abortion laws — and continues downward today).

  68. “Family condo living is the norm across the globe. For those dreaming of a yard and white picket fence in Vancouver tough times ahead.” Yes but better build family condos over here. I’m living in one…. Most condos seem to be built for students or retired couples. High density family development would be perfect for the capital city center location. But, lack of vision among most developers means it will probably reincarnate into some for of the same ol luxury condo scheme…

  69. I’m sticking to the trusty ~10 / 4 trend…

    ’70-81 up / 81-85 down
    ’85-94 up / 94-98 down
    ’00-10 up / 10-14 down (more like late ’09-13)
    ’14-24 up

    …with the best part of the 10up usually being when rates (inflation) start to jump.

  70. Will they [the bears] continue to be wrong and arrogant or [Personal attack removed – admin]. [or will there be] a massive real estate correction but it’s never going to happen.

    “but it’s never going to happen”

    That’s not arrogant? LOL

    Since 2008 the Victoria market has followed a random walk with a slight uptrend, so neither the bears nor the bulls have been exactly right. In the future the market will turn ballistic, continue more or less horizontally, or drop precipitously depending on a number of factors that cannot be known in advance. Here are some possible developments.

    First, US/NATO goad Russia to military action that justifies giving the Russians “a punch on the nose” such as some US politicians, e.g., presidential contenders Kasich, Christie, Clinton, etc., seem anxious to administer. Then things escalate, either to a long drawn out war in Ukraine, Crimea, Syria, wherever, creating massive budget deficits, money printing and inflation, as during the Vietnam war, or perhaps nuclear escalation.

    Second, either a financial market dislocation, perhaps a meltdown in the multi, multi-trillion-dollar derivatives market, or simply a resumption of recession/depression after one of the weakest economic recoveries on record, leads to extreme central bank intervention, including negative interest rates.

    Third, a rejection of globalism and a return to national economic policy, i.e., the Trump prescription, by the US (which would compel Canada to adopt a similar set of policies or be shut out of the US market). The result would be increased labor demand, increased wages, and disproportionately large increases in prices of manufactured goods.

    Fourth, Victoria and other South Vancouver Island constituencies vote liberal in the next provincial election and a grateful Christie Clarke rewards Victoria with a third university, an extra hospital and the return of Provincial Govt offices moved to the mainland.

    I think I could add many other possibilities but the above are all more or less conceivable and all would affect RE substantially. (1) and (3) would be negative for RE, (2) and (4) would be positive.

    Another possibility, perhaps, is a psychological crash. Folks simply get bored with RE. Everyone anxious to buy has already bought, while those who hesitated have been priced out causing the market to falter. Then, those planning to downsize will hasten to list, while those who have not yet bought will decide to wait for the correction to work itself out. Overnight, a shortage of inventory turns into a glut.

    What will actually happen no one can possibly know, so arguing whether RE will go up or down seems a bit pointless, although, a degree of inflation seems to be, like death and taxes, one of the few certainties in life, so if nothing exciting happens we might expect the gentle uptrend in prices to continue.

  71. As absolutely nuts as the Vancouver market is you can still buy a half decent 2 bedroom, 2 bathroom, newer condo on a Skytrain line for under 500k in a half decent neighborhood. For example, around Brentwood Town Center in North Burnaby. I lived there for about 8 months while I was still doing my health care gig and it was an easy ride to Royal Columbian Hospital and in the other direction around 20 minutes to downtown Van. Some of the high-rises has grocery stores on the podium floor of the building….didn’t really need a car.

    Family condo living is the norm across the globe. For those dreaming of a yard and white picket fence in Vancouver tough times ahead.

  72. Vancouver total inventory on this date 3 years ago equalled 14619… today 7354 !

    Entertainment at its finest when you look back 3 yrs ago at magazines like Canadian Business, Macleans, etc with crashing & burning houses on the covers. An actual headline from one of the articles “The housing bubble has burst, and few Canadians will emerge unscathed.“

  73. I think they are called “the greater fools”. Paying that much to live in Oaklands area is ridiculous. If you can afford to overpay for a new house then you can suck up the new extra costs. Goes with the territory.

  74. The real question now is how will the spring shape up for the last few bears left. Will they continue to be wrong and arrogant or [Personal attack removed – admin]. The third possibility is a massive real estate correction but it’s never going to happen.

  75. Ascot sold for $953,000.

    Electrician that wired my home noted this morning that come new 2016 Electrical code in February there will be an additional $2,000 in material costs for a new home. Something to do mostly with the breakers in the panel.

    I am predicting by 2017 your run of the mill new spec home on a 5000-6000 sq/ft lot that use to run 800-840k only 3-4 years ago in Oaklands/Saanich type areas will be pushing $1 million. We are already into the 900s.

  76. HHV traffic follows the real estate market. Busiest in the summer! Quickly approaching 100,000 hits since David resurrected the blog in mid May.

  77. Am I really the first one to comment here? New site looks great, and has great potential. Well done, and thanks! One of these days I may ask for a tip or two related to web programming and the like…
    I guess 456 sales this month.
    Marko – can you share how much 3745 Ascot sold for? Brand new house in good area, with 2 bd suite, listed for $959k. Many thanks.

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