Welcome to househuntvictoria.ca

Oh lord, not the eighties again!

https://youtu.be/pIgZ7gMze7A

The Loonie, which all those losers have been selling at the bottom, may not have bottomed after all:

http://www.canada.com/business/money/canadian+dollar+could+sink+cents+bond+with+grows+world/11612319/story.html?__lsa=9f07-7143

Could be we will be back in the low sixties before the oil price recovers:

http://www.cbc.ca/news2/interactives/map-history-dollar/

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.

Anyone investing in natural gas would be watching the long term weather forecasts of 14 days ago.

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!

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)

our financial markets are bottoming

Unless they are not!

BMO says twenty dollar oil possible:

http://www.zerohedge.com/news/2015-12-27/bmo-asks-if-oil-prices-could-collapse-20-answers-yes

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.

http://i.imgur.com/sXdT63L.jpg

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

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

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.”

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.

…and then there is the precipice of hyper inflation…

http://finance.yahoo.com/news/federal-reserve-will-pay-banks–12-billion-in-2016-165253054.html

Here’s something to cool the ardor of the bulls:

Bloomberg: Money Flooding Out of Canada at Fastest Pace in Developed World:

http://www.bloomberg.com/news/articles/2015-11-02/money-flooding-out-of-canada-at-fastest-pace-in-developed-world

Not a good sign for those hoping for negative interest rates, since they would only hasten the outgoing flood of cash.

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).

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.”

“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.

Tiny houses the trend. http://www.cbc.ca/news/business/tiny-housing-trend-1.3380207

Although 1000sqft isn’t really tiny. But your grandpa’s 50s rancher just isn’t as cool as a 9ft wide modern build.

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.

“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.

Merry Christmas House Market nerds!

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

@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

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.

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.

“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.

It’s not just a gov town… http://www.timescolonist.com/business/greater-victoria-economy-in-for-growth-spurt-conference-board-1.1936549

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 !

“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 !

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.”

“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.

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

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.

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.

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.

“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.

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

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.

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).

“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…

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.

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.“

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.