April 11 Market Update

Weekly stats update courtesy of the VREB via Marko Juras.

April 2016
Apr
 2015
Wk 1 Wk 2 Wk 3 Wk 4
Unconditional Sales 367
840
New Listings 502
1413
Active Listings 2600
3945
Sales to New Listings  73%
59%
Sales Projection 1168
Months of Inventory

4.7

The madness continues unabated.   Inventory is building but very slowly, and sales are keeping up the frenzy pace.   A couple months ago I argued there was still a good opportunity to buy, but every week that goes by it’s harder to tell.  A few friends are still looking for places and it’s desperate out there.   Anytime I think there’s a reasonable listing available it sells for way over ask.   I think Just Jack’s advice to concentrate on the ones that remain after a week or two might be a good strategy.  You aren’t going to get a better deal (those listings aren’t selling for a reason), but at least you can do your due diligence before committing hundreds of thousands of dollars.

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220 thoughts on “April 11 Market Update

  1. And opinions are never wrong.

    Opining on what the market will do in future that and having that opinion proven to be incorrect by the future arriving and the opinion being wrong is, well, wrong. And opinion is different than personal taste, ie. chocolate ice cream is the best. Seems like you might be mixing up concepts. In any case there is a lack of logic in that statement when applied to your facts.

    Here is one of your opinions/predictions:
    http://househuntvictoria.blogspot.com/2013/01/2013-predictions.html?showComment=1357604014167#c6745965939638989339

    My thoughts are that the typical two-bedroom condominium in the core districts will be selling under $229,000 and a starter home will be under $299,000 before the end of the year.

    Didn’t go that way, mind you no-one posting here seems to have predicted things perfectly.

  2. @Fernwood Rd. My guess is 580k. There’s brand new 2-story builds around the corner on Pembroke(?) selling in the 700s. Can’t see this place on the main drag going for anywhere near that. Then again I know nothing about duplex zoning and its implications for market value.

  3. Introvert – I’m curious what your job is?

    Heck I’m curious if anyone here works. Heck of a lot of comments during prime business hours.. 🙂

  4. Introvert must lead a really interesting life. Always trying to pick holes in other people’s arguments; never advancing any arguments or providing any data of his own.

    He seems to have plenty of time on his hands. Introvert – I’m curious what your job is?

  5. I’d like you to find that post where I said I was a renter. Or was that just made up?

    How about this one:

    June 7, 2012, at 5:17 PM, Just Jack wrote:

    Oh yeah, spoke with the landlord today when he came by to drop off the cheque for the new fridge we bought last week. He’s having a new deck put onto the back of the home and we’ll have new hardwood floors put in the bedrooms this summer.

    Gawd, how I hate renting for half the cost of what a mortgage would be on this home.

    Source: http://househuntvictoria.blogspot.ca/2012/06/another-look-at-affordability.html

  6. @gwac – I was teasing you about your typo re: offers: ‘August’ vs ‘April’.
    Ok, with no credibility what-so-ever I will wade into the pool with a guess of $565,000.

  7. juwai.com is interesting isn’t it. It provides immigration, schooling, family settlement information in Canada including Quebec ‘fast tracking’ (their words). They also describe Vancouver as a ‘lost paradise’. I didn’t find any description of Victoria so I suppose we are really in a LOST paradise.

    I had an errand which caused me to drive through Oaklands area today. I don’t know if I’m imagining things or not but there were a few very expensive SUVs/luxury vehicles driving slowly around the streets. (I wasn’t there long enough to see ‘streets’ driven on but I’m assuming this because of their driving behaviour.) The vehicles stood out from the usual bicycles I would pass on Haultain.

  8. Again, Introvert adds nothing to the debate except for more snarky, trolling comments.

    Introvert – a challenge for you. See if you can contribute something positive to this blog over the next 24 hours, instead of just criticizing others.

  9. There are only a very few posts showing my predictions and they have been as reasonable as most on this blog. What you are looking are my opinions of the market given the information available at the time. And opinions are never wrong.

    Introvert has never given a prediction, so in that way Introvert has never been wrong.

    And it doesn’t count when its Introvert’s mom that owns the house.

    I’d like you to find that post where I said I was a renter. Or was that just made up?

  10. Come on JJ lets get a guess.

    sale price guess on Fernwood Rd house
    fireecology1 630k
    Gwac 725k
    Animal Spirit 637.50
    Michael 688.8
    Hawk 490k
    CuriousCat 525k
    Aug 14th bids expected

  11. According to Globe & Mail, it is possible that Chinese investment in Canadian RE is increasing this year. Scary stuff, to be sure. If this foreign cash injection continues, prices won’t soften or correct anytime soon. Man, I don’t think anyone would have predicted the insanity our BC housing market has become.

    http://www.theglobeandmail.com/news/british-columbia/chinese-investment-in-canadian-real-estate-set-to-increase-in-2016/article29628005/

  12. My guess is $525k for Fernwood Rd. I just drove down that street this week to check out Fernwood Inn for the first time (my friend had a groupon). I wasn’t impressed – the street is narrow, houses are close together, a big truck came towards me in the opposite direction and barely had room to squeeze by between the parked cars and myself. I don’t think it’s comparable to Fairfield at all.

  13. Requesting someone to post their information publicly? Really?

    Introvert has posted quite a bit about his house here over the years including its location and that he has a suite. If I recall correctly the last you posted you were renting.

    Again, your stats are good – thanks – but I’d have to agree your predictions have not been accurate overall. In fact the opposite of what you predicted has occurred overall. Revising the past when the archived posts are there is not a great plan. You are allowed to change your opinions if things didn’t work out as planned 🙂

    Who was thinking condos would not rise too once hot market conditions manifested?

  14. If you had bought a house you would have told us.

    You can’t refute that you’re almost always wrong, so time to deflect…

    We bought in Gordon Head in 2009.

  15. Too bad you didn’t buy a condo when I said.

    Good thing I bought a house when you were counselling prospective buyers not to. My home’s value is up $100-150k since I bought around the last market peak.

    But keep reading the blog someday you might learn something.

    Over the years we’ve all learned that doing the opposite of what you suggest is usually the wisest course of action.

  16. Interesting Fernwood history. Hope you don’t have a spring capped in your back yard that might let loose.

    “Within Section XVIII of Fernwood is the district known as Spring Ridge, bounded generally by Chambers Street on the west, Bay Street on the north, Fernwood Road on the east and Pandora Avenue on the south. Gravel deposits left after the retreat of the last Ice Age 10,000 years ago underlie this area. Numerous fresh water springs gave it its name. Until the damming of Elk Lake in the early 1870s, these springs were the principal source of drinking water for Victoria. One of the most important springs was on the 1100-block of Princess Avenue. At first, water carriers filled their wooden casks there and sold it door to door throughout the city. Later, wooden stave pipes were used to carry the water to town. At least two breweries (the Lion and the Empire) were established in the vicinity to take advantage of the pure water. Though the springs remain in many basements and backyards, most have been capped, and the water has been diverted into Rock Bay through a drainage system built specifically for the purpose in the 1950s.”

    “The gravel deposits proved very useful as a source of building materials for the growing city of Victoria. Stevenson Park between Pembroke and Gladstone Streets is lower than the surrounding area because of the large quantities of gravel removed from the site in the early 1900s, some of which was used to fill in the James Bay mudflats where the Fairmont Empress Hotel was built. South of Gladstone Avenue, now the site of Victoria High School, concrete block factories took advantage of the abundant gravel. However, the dust and noise of the unsightly gravel pits were a constant source of annoyance to nearby residents who regularly petitioned City Hall about the issue.”

    http://www.victoriaheritagefoundation.ca/Neighbourhoods/fernwoodhistory.html

  17. Correction, it was an old gravel pit near where that particular place is. Still ripe for who knows what to find buried back in those days. I believe the dump was a bit up towards Oaklands direction. Will have to look it up.

  18. I’ll say $490K…. then re-listed for $380K a couple weeks from now after they find the body in the back yard after soil testing due to zero conditions. It did used to be an old dump site down there in the olden days. Who knows what you can find in your back yard in Fernwood. 😉

  19. 2215 Fernwood is only 888 sq ft up, so I’d say either a developer buys the lot, tears it down and builds a duplex, or someone goes crazy in a bidding war. 637.5 is my bid. This one could give us a land value estimate.

  20. Like I said a few months back you should be buying condos. Again I predicted rising prices and I was right on.

    Introvert, I said a lot more than what you tactfully snipped out. I think anyone who has a higher than grade 5 education would have understood what I wrote. Too bad you didn’t buy a condo when I said.

    Some of us are winners – then well there is you. But keep reading the blog someday you might learn something.

  21. This is a market driven by a shortage of supply and panic buying and mistakes are being made today that will have an adverse effect on the net proceeds upon re-sale.

    JJ, you also said this years ago and it turned out not to be true, because anyone who bought around then and is selling around now is not experiencing any “adverse effects” on “net proceeds upon re-sale.” Quite the opposite, in fact. But go ahead and say it again. One of these times you might be accidentally right.

  22. I’ll say $688.8k for Fernwood.

    The market must still be sizzling if even old unreno’d condos are going ~100k over list (301-1370 beach dr).

  23. Excellent articles Hawk on how the yuan is being devalued, and how the money that’s leaving is affecting real estate worldwide. Finally people are investigating how the shift from communism to croney capitalism and corruption is pushing prices to insane levels in local BC markets and creating rotting neighbourhoods.

    Interesting excerpts from The Province:
    “Yuan’s company later provided Yunye with additional gold bullion gifts … for more mining permits …

    “Meanwhile, back in Vancouver in 2010, Yuan bought a $5-million British Properties home, adding to his numerous B.C. assets including a private island and a vacant $14-million Shaughnessy mansion. The West Vancouver home was purchased in the names of relatives … Yuan’s estate is the subject of a court battle between relatives in China and Vancouver, and his numerous mistresses and illegitimate children …

    “Huaican Ren, the other known Vancouver-area tycoon who testified against Yunye, is worth about $400 million … Ren and his wife Xuepei Sun possess two Vancouver homes worth about $10 million, including a home in the 4100-block West 8th Avenue bought for $4.6 million in July 2011. Neighbours said the Chinese owners have never been seen in the rotting Point Grey home, which was cited in a City of Vancouver “untidy premises” order in June 2015.

    “According to the Global Real Estate Institute, Ren is among the world’s leading real estate players …As for Ren’s Point Grey property, it was listed for sale about 10 days after The Province exposed its decrepit conditions. It appears to have been sold for $6.5 million on March 3 according to MLS documents. But over a month later, a new owner has yet to be registered on title … B.C. Notary Society counsel Ron Usher — who is a member of the B.C. Real Estate Council panel investigating so-called ‘shadow flipping’ said he can’t determine the status of the Point Grey home sale.”

  24. Hawk, the asking price on the Fernwood home is to garner interest in the auction to happen on April 14 at 6 PM. The price is set low to encourage multiple bids. The market exposure has also been shortened to 4 days. That puts a lot of cars in the driveway at showing times.

    Anyone interested in bidding on the property should satisfy themselves as to the R2 zoning and minimum lot size requirements for a duplex. You may also want to review the Official Community Plan and soil conditions for the neighborhood and speak with city hall. You’ve got till 6:00 to do your due diligence.

  25. Looks like the tip of the iceberg in the shady realtors story. A police investigation would be huge and may be the first catalyst to shutting down the insanity.

    Vancouver real estate firm target of two probes as complaints keep coming

    “A Vancouver-area real estate brokerage firm is now the focus of two investigations as more people come forward alleging they were treated poorly or deceived by New Coast Realty.

    The Globe and Mail has learned the Real Estate Board of Greater Vancouver is gathering evidence on the firm, while a separate probe by the industry’s self-regulator continues. A B.C. MLA is urging police to investigate also.”

    http://www.theglobeandmail.com/news/investigations/bc-real-estate/article29621716/

  26. I use the VREB boundaries to write up neighborhood descriptions. For Victoria City there are 15 neighborhoods and for Greater Victoria there about 160 neighborhoods.

    As for valuation of an individual property in that neighborhood that depends on the property. Sometimes the location is of secondary importance to prospective purchasers. They may be looking for a specific style of home such as a character house and if it is located in Fernwood, Hillside or Jubilee that is of secondary importance.

    It’s not always location, location, location.

    But what I do find, is that most of those that are looking for a specific style and sacrifice on the location will put their home back onto the market in a few years. A Fairfield character style home in Fernwood won’t make them happy. What they want is a Fairfield character style home in Fairfield. Having a turn-of-the-century character home in the middle of a 1950’s subdivision is a property that is in architectural contrast with the neighborhood and that limits the number of prospective purchasers when the market returns to a balanced position between buyers and sellers. Architectural contrast is considered to be an external obsolescence. Another more easily recognizable form of external obsolescence would be if the property backed onto a gas station. When you limit prospective buyers – you should have an adverse effect on price. You’re not seeing that today because the market is imbalanced with some purchasers acting in an irrational manner that is not in their best interest.

    This is a market driven by a shortage of supply and panic buying and mistakes are being made today that will have an adverse effect on the net proceeds upon re-sale. It would be prudent for the banks to reduce the loan to value ratio in these “hot” neighborhoods to protect the best interests of their shareholders. A 65% loan to value ratio would be more prudent than an 80 percent loan to value ratio in some of these hot hoods.

  27. You’ll find maps that show the neighborhood boundaries on the VREB website when you drill through the layers of “find a property”

  28. No I mean a map that shows and names the neighbourhoods. I’ll leave the classification into good and evil up to you

    Okay. All the realtors should have a good map book with neighboourhood boundaries and names, at least in “old” times. We were given one from our realtor back in 2004, still use it today in the car, as a general assistant to Mr. GPS.

  29. “I know it isn’t in Oaklands, my point was more along the lines that 6 months ago no one imagined bungalows in the Oaklands area going for 750k and character homes for 900k.”

    So how much did this 4 bedroom in Oaklands asking $639K go for ?

    http://www.victoriahouselistings.com/listings/mls/362860/vi-oaklands/3009-scott-st

    So that would mean this Oak Bay bungalow asking $600K should go for $900K ?

    http://www.victoriahouselistings.com/listings/mls/363052/ob-henderson/2529-florence-st

  30. We bought in the Oaklands(Ryan & Asquith) in 2013 and love the area! Wasn’t on our radar at first(Broadmead, Fairfield, and south Oak Bay where we originally started looking), but once we saw the house and the neighborhood, we fell in love with it. Close to shopping, work, downtown and many park area’s. Neighbors are friendly and it is a good mix of wealth and working class people. I thought the people were crazy to pay $800k for the new houses on the old church lot a year ago, but that looks like a steal now. I have talked to several of my friends who are 1%’ers that have bought or are looking to buy in the area not because of price, but because they like it.

  31. No I mean a map that shows and names the neighbourhoods. I’ll leave the classification into good and evil up to you 🙂

  32. Does anyone have a good neighbourhood map of Victoria?

    What do you mean by “good”? Less crime or high income or good school or high walking score or interesting house style or friendly people or more green space … etc? There can be so many factors and it can be very subjective too, so everyone’s map could be very different. For us, we would not want to live in a neighbourhood with low walking score.

  33. Topic on CBC radio “the island” this morning: increase in demolished houses in 2015 is triple the prior year (54 I think?). Speculating that it’s due to vancouver buyers . Not sure if this is just vic, or broader region.

  34. @ animal spirit: “Fernwood save for a small area around spring st apartments and streets west of asquith in Oaklands”.

    I’m interested in your neighbourhood analysis but don’t think I understand it. Are you saying streets west of asquith in Oaklands (which would go all the way to cook st) are similar, and can be lumped in with the bulk of fernwood? And not belmont, Forbes, Victor, Shakespeare?

  35. Dear Administrator, please consider banning the winking face emoji. Thank you.

    Maybe it’s pink eye.

    Cold-coast anecdotes? OK, I will play.

    Here’s another one. A few years ago we did a road trip down the west coast to california. We drove our old 1990s Tercel down to Portland and almost died in the 35+ heat of the city looking for parking. That Tercel was the basic model, which in those days meant it had a blank plastic plate where the clock would go, and certainly no AC.
    So we ditched the car and rented one instead figuring it would only get worse further south. The next day driving down the coast we had to turn up the heat to take the chill off.

  36. Fernwood and Fairfied appeal to two distinct social economic groups. Fernwood is comprised of those that work at the store and Fairfield is comprised of those that own the store.

    Haha, there are also cross-overs, Fernwood has people who work at the stores and who use the stores, Fairfield has people who own the stores and also who use the stores.

    Sometimes it is about personal preference. Back in the spring of 2009, we had choices among Gordon Head, Cadboro Bay, Oak Bay and Broadmead, we chose Mt Tolmie, a neighbourhood between Oak Bay and Gordon Head, within walking distance to shops/restaurants/banks/coffee shops/libraries, high above sea level and on solid rock, and we can walk up to Mt. Tolmie or stroll on UVic campus whenever (day or night) we like. Houses here may not be as big, but they are very mixed and more interesting than 70s/80s boxes, people here are also very mixed and interesting, too. We have retired fireman, nurse, retired and mid aged librarian, retired and current government workers, retired doctor and young doctor, even a rental house full of UVic students, … all living on our tree-lined small dead-end street, with neighbours sharing meals and gathering together every few months. It just makes one feel fit in and comfortable. It is the neighbourhood we like and we don’t care at all if others view it as “prestigious” or not.

  37. Hmmm, not sure we are talking about the same houses. Would be a stretch to call our house a character house as its 2004 built and not in oaklands (firmly hillside quadra and closer to burnside/gorge than oaklands) I guess the term could really mean anything though. Average selling place in our neighborhood is below 500k.

    I know exactly which home you sold and you probably know my FB friends work related connection to the buyer. I just didn’t want to and will not disclose the address to respect your privacy.

    I know it isn’t in Oaklands, my point was more along the lines that 6 months ago no one imagined bungalows in the Oaklands area going for 750k and character homes for 900k.

    Same applies to Mayfair.

    It sounds like you made a solid move, but the reality is your Mayfair home is worth the same or more right now. That being said your Esquimalt home is also worth the same, or more. No need to sweat anything 🙂

  38. Is it cold by the water in S OB? Yes freezing in summer except for the rare occasions when the wind is from the NE or calm. Water side of Fairfield and James bay are just as bad as are water exposures in Esquimalt. Not as bad once you turn the corner in Oak bay and face east rather than south. Allof these neighbourhoods should be avoided if you crave hot summer weather. The difference is often striking. 4 or 5 degrees warmer just a kilometer inland. Personally I hate the heat so I don’t mind the near water climate. On the plus side frost is light and rare right by the water. Veggies do fantastic even close to the water in these neighbourhoods. But there is no doubt your tomatoes will ripen a lot faster in central saanich than in south oak bay

  39. Animal Spirit,

    No narrative involved. Pandora is one of the ugliest main streets in town. That’s a fact.

  40. Hawk – re-read my post and then look at yours. The beauty of the walk is not Pandora for one block, but the rest of it. I apologize if this goes against your narrative, however, I prefer to deal in fact (which includes emotional responses to sensory stimuli just as much as data from Leo and Marko).

  41. Gonzo beach can be awesome weather-wise in the winter. If the wind is from the north, you can park yourself against the cement wall and take in some serious heat from the low sun. You might even catch JJ stroll through in the buck.

  42. Hmmm, not sure we are talking about the same houses. Would be a stretch to call our house a character house as its 2004 built and not in oaklands (firmly hillside quadra and closer to burnside/gorge than oaklands) I guess the term could really mean anything though. Average selling place in our neighborhood is below 500k.

    In any case we traded for a newer home, better built with ocean and mtn views in a neighborhood we quite like with plenty more than 20k left over (not sure how your math worked out there). In any case I know the buyer was happy and we are happy so everyone won.

  43. I remember being on Gonzo beach a few years back and seeing a resident on his patio reading the paper in a t-shirt and shorts…. In January….
    It is a varied climate in a very small area. I Visited the cob house in the highlands on the weekend. They have a healthy lemon tree…

  44. Cold-coast anecdotes? OK, I will play.

    Two years ago we did a mid-summer walk along Beach Drive and onto Kitty Islet. It was cloudless, calm, and about 23 degrees or so. Went to Casey’s for an ice cream cone and had just sat down when a south west wind appeared out of nowhere, a fog bank rolled in and cut the visibility down to a block or so and the temperature dropped about 10 degress instantly.

    I have never been that cold in my life.

    Jumped in the car and went back up to Broadmead. It was 26 and calm.

  45. “Yikes, JS you sold an, according to Marko, very very nice character house in the hottest area of town weeks into an uptick? I would have held on, those will be worth 950-1.1m by June.”

    Sounds like a bunch of realtors have showed up…. or drug addicts. 😉

    ma·ni·a

    ˈmānēə

    noun

    mental illness marked by periods of great excitement, euphoria, delusions, and overactivity.
    synonyms: madness, derangement, dementia, insanity, lunacy, psychosis

    an excessive enthusiasm or desire; an obsession.
    plural noun: manias
    “he had a mania for houses”

  46. “hawk, my daily walk downtown to pandora and douglas is highly pleasurable. Doesn’t involve pandora until the very end and is glorious on a sunny flowery day.”

    Pandora is glorious ? They have flowers on Pandora and Quadra ? Must have some good herb in Fernwood. 😉

  47. I know a couple in their 20s that recently bought a home in Ferwood with a basement suite. They like that it’s close to town and also their jobs north of downtown (Fairfield would have added to their commute times). They’re meeting a lot of families doing the same.

    According to city planners there are “neighbourhood lifecycles” and 2 of the later stages of a neighbourhood are “decline” and then “renewal.”

    Every generation has a different opinion about whether a neighbourhood is hip or not.

    Fernwood went through a decline in the 1950s-1970s when people moved to the burbs, and now it’s going through a renewal. (in the 70s it was a hippie hangout)

    Anyone from a bigger city would probably laugh that we even make a distinction between Fairfield and Fernwood. (?)

    Let’s face it – we’re lucky that a lot of places in Victoria have easy ocean access and beautiful views, and quaint “town centres” like Cadboro Bay or Cordova Bay. As others have said, not everyone wants to be oceanfront – some people would rather have large gardens without too much wind, or views, or easy access to UVic or the highway for business reasons.

  48. Don’t complain too much about being cold by the ocean or the herd may label you as someone who hates Victoria. 😉

    On a lighter note, it’s interesting the yuan has been devalued by a major chunk today by the most in months. How much lower will it go and how much more cash will the Chinese continue to smuggle out and further destabilize China’s financial system ?

    Following Double-Fed Emergency Meetings, China Devalues Yuan By Most In 3 Months

    “After weeks of “stability,” and following two emergency Fed meetings in 3 days (and an unexpected ease by MAS), The PBOC decided today was the right time to drastically slash the Yuan fix by 300 pips. This is the largest devaluation of the Chinese currency since January 7th (and second largest since August’s world-market-turmoiling devaluation). Offshore Yuan had been tumbling all day (shrugging off the supposedly better trade data as FX traders saw through the colossal spike in imports from HK as indicative of capital outflows), and is falling further following PBOC’s cut.”

    http://www.zerohedge.com/news/2016-04-13/following-double-fed-emergency-meetings-china-devalues-yuan-most-3-months

  49. Yikes, JS you sold an, according to Marko, very very nice character house in the hottest area of town weeks into an uptick? I would have held on, those will be worth 950-1.1m by June. I’m seeing 1960 boxes in need of 100k of reno just to make livable selling near the 800k range.

    So after all that stress, you had to pay realtor fees and property tax fees and moving fees, and now get to discover all that is wrong with your new place? How much did you pocket? $20k and now live outside the core in Esquimalt?

    Seems like gambling to me, I would have just enjoyed the new house and watched it go up 20k a month in value till the market flattens out.

    But, to each his own, but to say that a character home in your area a couple weeks after you sold would sell under 800k is crazy. I’m looking at mold- boxes for near that price, not nice character homes. You certainly didn’t time the market peak 😉

  50. Seriously though, once the novelty of living near the water wares off, you start to think ‘who needs to be this friggin cold all the time’? Coldest winter I ever spent was a summer in James Bay!

    I think the oak bay side is less bad, but still chilly depending on the wind. It’s great heading down to the beach, and even better coming back to the my Oaklands backyard to warm up again 🙂

  51. JJ there are basically three types of houses in Fernwood/Oaklands and three areas.

    Houses:
    A. Massive suited character house
    B. Circa 1910 Edwardian character house, sometimes with a suite
    C. Post WW2 bungalow

    Areas:
    1. Fernwood save for a small area around spring st apartments and streets west of asquith in oaklands
    2. Rest of oaklands
    3. Spring st area and a few other questionable corners

    Each has its own vibe and benefits. For a family, the oaklands bungalows probably make sense. For the rich hipsters the fernwood edwardians and for the dealers, clients and tripped out ones in Fernwood square, spring rocks.

    hawk, my daily walk downtown to pandora and douglas is highly pleasurable. Doesn’t involve pandora until the very end and is glorious on a sunny flowery day.

    As for weather, check out the school weather station graphs at victoriaweather.ca

    And having moved from fairfield to fernwood in the fall I’d much rather be in Fernwood – much less gentrified and white bread, and far friendlier.

  52. Ah come on JJ, you’ve had it in for Fernwood/Oaklands for years on here. Time to show it some love! haha

    I actually know a couple different pple looking in both Fairfield and Fernwood/ Oaklands. Fairfield for all the obvious reasons, and Fernwood because, unlike Fairfield, it’s not so bloody cold!!

    I know several pple who live in both areas. Same or similar careers, similar values etc, it’s just that the Fairfield pple are…old. Either bought there a long time ago or worked up to it from a place like fernwood.

  53. Speaking of Oaklands…..I am not normally a sales person but I showed this house to 3 or 4 buyers and emailed probably over 10 about….I thought it was a great deal given sq/ft, new, quality, nice suite, plus media room in basement…

    Sold before the market took of 14 months ago for $875,000

    http://christinastack.com/property/1542-morley-st/

    Now a 1950 bunglaw will set you back north of $750,000.

  54. IF we had listed in the beginning of March or late Feb we likely could have gotten more for our place (say 850 to 900). If we listed it RIGHT now we’d probably only get 799,000 or even a bit less. Things are still nuts, but there are good deals to be had if you are careful and are prepared to walk away in case one of the nutbars walks into a deal.

    Your house ended up in my facebook news feed as I am friends (on facebook) with the buyer….and I don’t know, that looks to be like a super nice house you sold. You would get at least 830k+ in right now. Character homes in Oaklands that were 650ish in 2013 are now crossing the 900k mark. It will take time for people to grasp that Oaklands bungalows now go for 3/4 million and character even more.

  55. Whomever paid $900K in Fernwood got burnt severely. They could have bought a classic heritage house by Craigdaroch Castle in Rockland for $50K more. Ole PT Barnum was bang on once again.

  56. It’s crazy how much cooler it is near the water in Gordon Head. In the few hot weeks in the summer it can be boiling in gordon head after the sun goes down and you drop down to Mnt Doug and temperature plummets by 10-15 degrees.

  57. I don’t think many people working on Douglas and Pandora will want to walk down crack alley every morning from Fernwood. Have you tried it at 7 AM Mike? Not very pretty, nor safe.

  58. AG asked: “I’ve heard a couple of people say that South Oak Bay is colder, especially around McNeill Bay and Gonzales Bay. Is there any truth to that?”

    It must be true; the daily weather forecast by Environment Canada often says something like this, ‘Today’s highs will be 25C or 22C near the water.’

    On those scorching hot July days last summer, we often headed down to Dallas Road for a stroll in the cooler areas near the beach. It’s also milder during the winter at the beach, unless there is a storm.

  59. I mentioned Fernwood was one of the best buys last Spring with some of the commercial projects getting the green light that side of downtown.

    There’s a lot of capital starting to pour into Victoria. I noticed they’re already blasting on the Two Towers. One would think some of the best areas to buy right now would be Central Park/Fernwood

    The two towers alone will have over 300,000 sq feet of office space. There will be alot of well-paid workers wanting to live close by in Fernwood (walking distance) in a few years.

  60. GWAC, you seem to want someone to agree with you that Fernwood is gentrifying into another Fairfield. You can’t change a Volkswagon into a Porsche. That was one sale in a neighborhood of economy style 1950’s housing.

    If you had a Porsche would you compare it to a Volkswagon or a Lexus? Think of it another way if someone did an appraisal on your Fairfield home by comparing it to Fernwood homes what would you think of that?

    The median price in Fernwood/Oaklands is $625,000. The median price in Fairfield is $965,000

  61. I would agree with Nan and JD’s posts re OB.

    Our kids went to Gonzales Preschool and then Willows and we lived nearby. Great neighbourhood for families (if you can afford it now!). The beach was wonderful and we loved Uplands Parks and playing on the school grounds. We timed it right, 4 cats and Buddies were by Willows when the kids were little. Now they are on the Avenue.

    We now live off the Avenue closer to Oak Bay high and the kids walk to school/rec centre/sports practice/music lessons. I find the proximity of the Pharmasave, coffee shops (four now), medical clinic, the bank, Roger’s chocolates, Penny Farthing, Fairways, Japanese places, Red Barn, Thai food, Pho, hardware store, dollar store, garden center and the library to be extremely convenient and the car gets little use. Estevan has fewer services close at hand.

    Cadboro Bay, Foul Bay and Lansdowne are pretty busy roads so being located off these might be something to consider.

  62. I know that people who like to garden say that it’s better to be a mile or so inland for warmth. It’s colder closer to the ocean, yes. My parents are on 10 Mile and it’s colder in the summer. But, it’s also warmer in the winter. Frequently if it snows in town, there will be no snow where they are. Again, trade-offs with everything.

  63. I’ve heard a couple of people say that South Oak Bay is colder, especially around McNeill Bay and Gonzales Bay. Is there any truth to that?

  64. West Saanich, I also like. We considered living out there in part because I really like running and riding and there’s a lot of my favourite spots out there. Still, all our family lives down on the east side of the core so we chose down there.

    I wonder how much local snobbery clouds our views of neighbourhoods that would not even be a consideration for a family coming from other places. I look at the Avebury house and yeah it’s traditionally a working-class neighbourhood. As we see, that’s changing. I know a lot of families that are choosing to locate there for varied reasons. It’s a nice leafy street, Avebury, and I can’t honestly see what’s so unappealing other than not being super close to the ocean. It’s walkable to Hillside commercial.

  65. What about West Saanich near west saanich rd. Any reviews on that?

    I just ask as that’s the neighborhood I live in. And it has most of what JD just described.

    Thrifties, or Country Grocer, liquor store, Saanich Commonwealth Place Rec, Red Barn etc…

  66. Re: locations, it all depends on what you want. As mentioned we live in S. Jubilee, which we really like for reasons of convenience and walkability. Save-On, liquor store, Oak Bay Rec, Good Earth/Discovery Coffee, Red Barn, all of OB Ave, etc.

    The Victoria side of Foul Bay really affords the same Oak Bay lifestyle in terms of proximity, but we find that some of the regulations around suites and things to be more progressive. I looked on both sides, it was just a matter of finding the right house.

    Unlike Nan I find Oak Bay Ave to be more useful than Estevan for a lot of things, though I have a cargo bike that I load the kids onto and really any part of north/south Oak Bay is a 5-10 minute wobble on the bike. We regularly do the Willows/Crumsbys tour with our small kids on summer weekeds and it’s do-able whether you’re on the bike or walking. The Bowker Creek walkway is really nice now after the reclamation.

    Regarding schools, you can get into wherever you want if you’re looking to get into an English program. Our catchment was Oaklands but we chose Margaret Jenkins mainly because more friends send their kids there and the pickups can be shared. A lot of the preference is individual – it’s all decent locations down there, really.

  67. JJ someone who works at he store cannot afford 900k. BTW people do look down and say, if this costs that there than I can justify paying for that here. People do that all the time.

  68. JJ if a house in fernwood goes for 900k and that becomes a new norm during the craziness. You bet that will be used by realtors to justify paying more for Fairfield. People need justification to pay up. One way is if prices are high and going higher in less desirable areas. I am not talking about Duncan to Victoria. I am talking about 5 to 10 minutes drives to areas that are perceived as more desirable.

  69. @bolides regarding Oak Bay: the neighbourhoods are very similar – they’re all walking distance to schools, beaches, and shopping. Estevan, Henderson (south of Lansdowne), and North Oak Bay are up to 20 minutes walk from Willows Beach, Camosun College, Uplands Golf Club, and St Michaels University School. South Oak Bay is walking distance to Dallas Road, Victoria Golf Club, Glenlyon Norfolk School, and the southern beaches like McNeill or Gonzales Bay. North of Lansdowne is closer to UVic and Gyro Park/Cadboro Bay (and probably walking distance to there).

    South Oak Bay is the most isolated (in terms of drive times) from the rest of Victoria. The nicest views of the city and the Olympic Mountains are from the Lansdowne Slopes (unless you buy waterfront in South Oak Bay). For shopping or medical, Oak Bay Avenue and Fort/Foul Bay are good, and the northern areas are also close to Hillside Mall.

    Funny, I just saw nan’s post as I was writing – similar opinions.

  70. GWAC, how can a sale in Fernwood drive up prices in Fairfield?

    The bias that all of us have is that we never compare down. We always compare up. Thus we compare Victoria to Vancouver but never compare Victoria to Duncan. The same with people in Fairfield they compare their properties to Oak Bay not to Fernwood.

    Because I dare you to walk up to someone in Fairfield and say Fernwood is the same or better. To the people in Fairfield it’s Oak Bay that drives their prices.

    Then you have to ask yourself is the person looking to buy in Fairfield also looking to buy in Fernwood? Really – do you think that’s going to happen! Someone looking to buy in Fairfield is also looking in Oak Bay.

    Or how about someone looking to buy in Fernwood. If they are priced out of Fernwood are they then going to start looking in Fairfield?

    Fernwood and Fairfied appeal to two distinct social economic groups. Fernwood is comprised of those that work at the store and Fairfield is comprised of those that own the store.

  71. re: Oak Bay, I’ve lived there pretty much my whole life but I’m not a realtor, so maybe I can offer some assistance from my “family perspective” .

    Obviously, there are premiums for waterfront wherever you are, it’s almost a separate market. For crossing the street to the waterfront side, properties double to triple pretty much all the way around. Waterfront is waterfront. If you’ve got to have it and can afford it, none of this matters anyway.

    South Oak bay is farther away from amenities than anywhere else in Oak Bay. It can take 10 mins to fort and foul bay/ Oak Bay/Foul bay most days and McNeil is a long road to do at 30km/h in the morning most days with all the school zones. Most of the elementary school catchment is in Margaret Jenkins, so there’s that if you want to send your kids to Willows (for whatever reason, this seems to be a thing). It’s a drive away from the only real beach in town. Pretty much all of it other than the rocky beach & parts of Anderson hill is in softer ground and lots more drainage problems in basements in my experience. On the positive side, it isn’t on the way to anywhere for anyone unless they live there so traffic is lighter on the wider streets. Great for pet owners with great walks along the beaches there that aren’t fussy about pets (unlike willows) and great walks to the top of Anderson hill and the top of Dennison for some pretty great views. Some of the nicest streets in Oak Bay outside the Uplands. Windsor park is pretty awesome, especially if you like Cricket and Rugby and bike races. SMU junior school is there (one of the best schools in the country I believe, private or otherwise) There are lots of families in there but my view is generally that this neighborhood works best for empty nesters who appreciate the quiet and don’t need to leave the house as much.

    Estevan Village/ Willows is my favorite, since I have kids and it’s close to all the amenities @ fort & foul bay and is just off Cadboro Bay, which can get you to Hillside or downtown in 5 minutes – no digging yourself out of quiet little roads every time you need to get out and 2 minutes to 80% of the things you will buy on a regular basis @ fort & foulbay. It’s on the beach side of Cadboro bay, so your kids don’t have to cross that to get to school or the beach. Actual stores you will go to all the time if you have kids in Estevan (king & thai, the village, Galley, Crumbsbys, etc). Right by the best beach in town. Right by fireman’s park which is a destination in the spring for families with kids in little league. Close to Carnarvon and Giro park (which is not in Oak Bay but one of the best parks in the city and far closer than South Oak Bay) If you have $$$ and send your kids to GNS, it’s right there on the beach. Uplands park is pretty super for naturalists, lots more wasps for some reason though. Tons of families. TONS. Best neighborhood in Oak Bay for families in my opinion.

    Most of North Oak Bay is pretty much the same as Estevan except more of the houses are 50’s bungalows, you are a bit farther out from the beach and you are on the wrong side of Cadboro bay road from the school. Once you cross foul bay, you aren’t in Oak Bay anymore. Some of the best views in Oak Bay on the upper end of the “downs”. Carnarvon park is one of the best parks in Oak Bay for families an having that in your back yard (literally in some cases) is a plus. It has a waterpark, daycare, baseball fields, lacross box, tennis lessons, etc. More a family area, not as nice or as convenient as Willows/ Estevan.

    The most overrated part of Oak bay in my opinion is along the Avenue itself. The Penny Farthing is a great place for a beer and there is some parking it’s always super busy on weekends, no stores sell anything I’ve ever been interested in (except banking), overpriced grocery and boutiques. More for old folks on foot/ empty nesters, etc that like have lots of money and time than a busy family that needs to park and save money, get in and get out and on with things. This seems to be changing a bit though in recent years.

    I’ll leave the Uplands out but it shares many of the benefits of Estevan + it is all on bedrock so the earthquake issue is probably not as big a risk if you can afford it.

  72. Agreed JJ, I think shortage of listings is big factor. But I kind of doubt that Van buyers wouldn’t know that being near the water (Fairfield) is traditionally more desireable? Same is generally true over there as well.

  73. JJ to give you the mindset of an outsider, When I moved here in 2008/09 and found a house 3100sq 15k sq ft lot in a great area. Great schools. I paid 800k. I though I hit the jackpot even though I probably over paid. Same house would have cost double where I came from. I think we are seeing a lot of that right now from non locals. BTW locals at that time in numbers told me I had to stay on this side of the tracks. I was perplexed by the strong opinion at that time.

  74. Since February 1, there have been 33 house sales in Fernwood and Oaklands. Prices ranged from a low of $425,000 to a high of $903,000.

    The median price paid was $625,000 that bought you a 1,700 square foot home on a 5,000 square foot lot. And there are lots of these generic stick houses that were build in under 3 months in the 1950’s.

    The bad news is that since February 1, only 36 houses have been listed and there are only 8 currently listed. That’s just about 3 weeks of inventory. If you’re a prospective purchaser for this hood you have no chance at all of not paying well over market value.

  75. JJ great post. The only thing I would add, is with this imbalance that sale in Fernwood only drives up prices in Fairfield while the craziness continues. Gives people the justification to pay more.

  76. I don’t think you’ll be able to find many Victorians born here to say anything positive about Langford.

    On the flip side most of the people in Langford don’t give a shit what Victorians think.

  77. Historically, different areas of Oak Bay have had higher underlying land values than others. The same in Victoria and Saanich.

    But as Animal Spirit pointed out that may no longer be accurate. Why would a home in the blue collar neighborhood of Fernwood have similar prices to that of a similar property half a block from the beach in Fairfield?

    The answer is that the market is imbalanced. Fernwood has not become the new Fairfield just as Fairfield has not become the new Fernwood. When the market moves back to a balanced position with more listings then you’ll see the Fernwood home decline in value substantially more than the market as a whole.

    What it sounds like you’re trying to do is put some normality to a market by looking at irrational purchases. A Vancouver buyer would not be aware that the price differential between the two areas is a couple of hundred thousand dollars. All they see is the same looking house. That’s called an unknowledgeable buyer.

    And also because of the shortage of listings, an agent can simply follow peak pricing. The house listed today has a few percent added to the highest price paid in the neighborhood. The properties don’t have to be similar since prospective buyers are chasing price not value.

    There are only 9 houses listed for sale in all of Victoria between $800,000 to $1,000,000. Is there any other reason necessary to explain why there are multiple bids!

    You need a big down payment to play in this game and be willing to gamble on losing most of that equity upon re-sale.

  78. @animal spirit: re: fernwood being the new Fairfield – my thoughts exactly! That’s gotta be an Oaklands record. It’s got lots of character but small bedrooms, tight stairs, etc. If this house was in Gonzales area I’m not sure it would sell for much more?

  79. I follow this blog pretty regularly (thank you Marko!). Just wanted to add my two cents coming from someone who has just bought and sold in this market.

    We purchased our home for $730,000 last April (closed in July) on a house that was assessed at 670,000 in the mayfair area of Victoria. We watched this spring as things started to get nuts, and we figured we’d give it a shot, so we listed in mid march at $799,000. Received 6 offers and ended up selling it for 830,000. Even with our purchase last year it was one of the most expensive homes in the area (that’s not heritage or a monster in size). We were assessed this year at 707,000. Not bad.

    We gave ourselves a long closing period and were even prepared to move out to the westshore if we had timed the market incorrectly. We felt pretty good though, and our overall assessment was this:

    IF we had listed in the beginning of March or late Feb we likely could have gotten more for our place (say 850 to 900). If we listed it RIGHT now we’d probably only get 799,000 or even a bit less. Things are still nuts, but there are good deals to be had if you are careful and are prepared to walk away in case one of the nutbars walks into a deal.

    We looked at a house on Munro near Saxe point listed at 838,000 (it was actually under assessed). We thought we’d write an offer, and hung around the open house to see what would happen. Sure enough a guy and his kids walked in, had a quick look around, and wanted to write an offer with the listing realtor (open house on a Friday subjects removed by Sunday) for $120,000 over ask. HE didn’t even have his own realtor. I have no idea if he got the place or not, but we took off and put the house out of our mind, though we found out later that it did sell for around that price. We rarely even looked in Gordon Head or Oak Bay as things are still nuts there but people are starting to list high in response.

    That being said we just got an accepted offer on a place assessed at 710,000 for 750,000 with a week to remove subjects in that same Saxe point neighborhood. We actually prefer that house to the one that went nuts on Munro and glad that guy didn’t walk into that open house instead.

    At the end of the day we think we timed the market correctly and capitalized a pretty solid gain and turned around with a much smaller mortgage on a house of comparable value (that we paid much less for than we sold ours) that we like better.

    I’m not gonna lie to you though, it was stressful, and for a few weeks we were really thinking we’d end up out on the westshore (not that its a bad place, just don’t like the commute).

    I think the market is still hot, but there has been a lot more to choose from the last couple of weeks and for the most part the really crazy overbids are only happening in a few places. IF you live in oak bay / Gordon head / fernwood etc and don’t mind other neighborhoods, you’ll probably do pretty well if you sell now and buy elsewhere. If you live in some of the other neighborhoods the market is still hot if you have a house that ticks all the boxes, but most of the stupid money has left those areas – and your house probably won’t fetch the same price it would have a month ago. Things can change on a dime though, and have already a few times.

  80. @ bolides – Victoria is a bit of a schmozzle with desirable pockets intermixed with pockets of less desirable neighbourhoods. Other than Langford, you won’t really hear Victorians talking about the ‘other side of the tracks’. Nothing against the western communities here at all :)… I just hear the following quite often, “there’s no way I’m moving out there”

  81. @ Sweet Home and @ Step by Step

    Sorry for the late reply. I’ve been swamped and am just checking back into HHV now. A restrictive covenant is a covenant registered on the title of the property that somehow restricts use of the land. There really is no limitation on what the restriction may be. An example of one I’ve seen recently involves a second residence on a property out in Central Saanich. The covenant restricts occupation of the second residence to farm workers only.

    There are many lenders that will simply not lend on properties that are bound by ANY restrictive covenants.

  82. Animal good to see things calming down. 🙂 Wow.

    Looks like this market is trying to catch up on 7 years of gains in 6 months.

  83. Wow. 2739 Avebury just set a new high tide mark in Fernwood. Assessed at 564, listed at 760, sold in 4 days at 903. 60% above assessment. Fernwood is the new Fairfield.

  84. A question for “locals,” i.e. anyone who has lived in the area for a few years or more: within the hot zone of Oak Bay, are some ‘hoods considered more desirable than others? North vs. south? East vs. west? Estevan vs. South Oak Bay? Border locations (interior, not waterfront) vs. central? Etc., etc.,…you get the idea. I know it’s all considered very desirable, but was wondering if there is traditionally any differentiation within the city of OB.

    As a newcomer to the area it’s very hard to get a sense of these things, especially in a market where anything and everything sells like hot cakes.

  85. Yesterday there were 84 new listings and 53 sales in all of Greater Victoria and for all types of properties. New Listing to Sales Ratio of 1.6:1

    But since this blog is only concerned about detached houses in Victoria, Saanich East and Oak Bay here are the stats for these areas.

    10 New Listings
    12 Sales
    New Listings to Sales ratio under 0.8:1

    The new Listings to Sales Ratio is not the same over all hoods.

    For example in the high end hood of Oak Bay there were 5 new listings and just 1 sale.
    Victoria only had 1 new listing and 5 sales. Saanich East with 4 new listings and 6 sales.

    https://youtu.be/jFrVoG-edFc

  86. Shadow flipping isn’t a myth. But the way the provincial government is likely to define the practice will make it of little significance for almost all transactions. But it does set a precedent for agents to set a fair listing price. And if that puts a stop to estate agents creating an auction environment then it will be good for buyers and sellers throughout the province.

    In my opinion, estate agents do not have the experience, knowledge or credentials to conduct an auction in BC. Real estate auctions should only be conducted by licensed auctioneers following approved guidelines and the courts. The agent being there to represent the interest of the seller and buyer but the listing agent can’t run the auction.

    What we need in BC is an overhaul of the Real Estate Act including greater authority for the Real Estate Council to investigate the industry without requiring a complaint to be made. That would mean a peer review system for agents. Good agents will be rewarded and the bad agents and agencies, that give the industry a slurred reputation, will be penalized.

    https://youtu.be/btqBJJF2yvE

  87. Good thing that family had the house to pay for the care 😉
    Anyway…. I don’t think it’s a bad time to sell either if there is a reason besides trying to short the market. It’s made my move smooth being able to sell so easy without conditions or hassles. But…I sure am glad I have a contract to purchase already as this market sizzles around me! Im not blind to the risks though. One investment property is enough for me….

  88. @yeahright, funny, you write like one of New Coast Realty’s new recruits.

    Some tips: best not to call something a “myth” and then explain how to avoid it. Also, don’t put “trustworthy” in quotes just before the word realtor – might make your co-workers ticked.
    Then look up “investigative journalism.” Education is key 🙂

  89. Isn’t Shadow Flipping a Myth? The consumer already has protection if they ask for it. no?

    It’s more of a media scare tactic to sell papers. ‘Shadow flipping’ can be avoided with “trustworthy” realtor. Its up to buyers and sellers to protect themselves. If you are worried about being taken advantage of on a real estate contract, and the idea of someone flipping your house in the shadows upsets you, simply don’t accept any offer that includes an assignment clause.

    Education is Key!

  90. “Even then the Victoria market seems like a no brainer on it’s own but as we see trends and consumer reactions to trends becoming global the scale of risk becomes global as well right?”

    Good points Recurse, and interesting links. That’s been my main point here. We think Victoria in an insulated bubble, but it’s being driven by a massive global credit machine which we are part of and has red flags flashing everywhere.

    People can ignore them or keep borrowing their brains out, but at some point in the near future the credit cycle will end. It’s just a matter of what market or which country is going set off the bomb.

    As per the family, it was a sad case of not wanting them in an institution but not realizing how expensive it is and family dynamics didn’t help. By the looks of our health system, the increase of dementia cases and the severe lack of planning for new facilities, I think a home care self-pay system is going to be the norm until very late stages.

  91. “Rising prices on strong volume. Is that really your sell indicator?”

    Rising prices based mainly on auctions of extreme over bids of $100K to $300K tells me it is. When any investment vehicle is being over bid by up to 20% on thin inventory over a short period of time, it’s a classic high risk situation and sell indicator.

    It’s an event in uncharted waters that usually ends with a move to the down side after a topping out process as buyers willing to pay the extreme peter out. Just a matter of time. If you are thinking of selling it’s the best time ever to sell. No stress, just decide which of 20 offers you want. Like fishing in a barrel.

    What happens when we go back to the March 2015 or 2014 inventory levels ? It’s pretty obvious what would happen.

    “There were 3,769 active listings for sale on the Multiple Listing Service® at the end of March, 6.9% fewer than the 4,050 active listings in March 2014. “

  92. if the listings are down about 1000 from normal then why is it so far fetched to think 1000 people may be chomping at the bit to cash in ?

    More people “cashed in” in March than any other month in Victoria history based on the sales rate yet prices rose.

    Rising prices on strong volume. Is that really your sell indicator?

    I make no claim about where prices are going to go in the long term, but it seems clear as clear can be that prices are going to stay strong for at least a few months. The current trend is not going to turn on a dime.

  93. @Vicrenter: I think the Hillside area has some potential, being so convenient to downtown and other amenities. If the city ‘gentrifies’ so to speak, over time it’s hard to see going too wrong there. The area around Summit Park (topaz, montrose, the rise, etc) offers some awesome ocean, mtn, city views, you won’t find better in that price range.
    I’d say structurally it differs from Oaklands in that Hillside seems to have more apartment/ condos vs SFHs, and is a bit more diced up by main roads. I’d say Oaklands is also more walkable for schools, while Hillside is more walkable to downtown, restaurants, theatre etc.. So yeah, I’d say the beatniks prefer hillside and middle class prefer Oaklands. I’d be curious what others think.

  94. @Hawk – The couple in Oak Bay who have nothing after a decade of providing care for their parents chose to pay for private care which runs ~10k+/month for live-in service which is the most heavily discounted service. Live-in services are typically provided on a short term basis by gov’t for transition from hospital, end-of-life care and dementia waiting for placement in facility. Would they have been able to stay in their home for a decade though? Probably not.

    They may not appreciate the options available to them from the government care system, often understandably, but subsidized service is available with need. And then there’s the CAP loophole that lets the wealthy avoid paying their per diem contribution with a little creative accounting.

    As a long time reader I appreciate Hawk’s point of view and while I don’t consider myself a bear I do think there’s merit to some of what he says, even following the last several flat years which could be counted as a correction of sorts except that wages weren’t (aren’t) increasing either so it seems like a zero sum game at best until you count global drivers.
    http://www.huffingtonpost.ca/2016/04/04/inflation-outpacing-wage-growth-earnings-shrinking_n_9611794.html

    Even then the Victoria market seems like a no brainer on it’s own but as we see trends and consumer reactions to trends becoming global the scale of risk becomes global as well right? With relative growth of world debt still increasing relative to world GDP does anyone think there won’t be a cost to pay which will have a significant impact on real estate here, there and everywhere?
    http://www.mckinsey.com/global-themes/employment-and-growth/debt-and-not-much-deleveraging

  95. Interesting how the BC liberal government is suddenly concerned about a crash, but most here aren’t. 50% mortgages with zero proof of income ? Jeezuz Murphy !

    Keep public’s trust or ‘your business is dead’: B.C. financial watchdog reads riot act to realtors

    “What is striking in her speech to the self-regulating council is how concerned the government is about systemic risks connected to real estate, and Rogers’s warning that the industry’s “privilege” of self-regulation is in danger.”

    “Eby said he believes the risk factors Rogers spoke of in the speech include B.C. banks that are currently issuing 50-per-cent mortgages to offshore buyers with no proof of income, which raises concerns of exposure to bad debt and money laundering.”

    “But your sector has captured the attention of the media, and in turn the attention of the public and the politicians.”

    Rogers stressed it is false for realtors to dismiss media scrutiny by saying, “This is just a few bad apples.”

    “Let me be clear — we have a problem and it’s not the media,” Rogers said.

    http://www.theprovince.com/business/watchdog+reads+riot+realtors/11847619/story.html

  96. Michael .. your chart is actually quite instructive if one factors in psychology…
    When interest rates start to rise, their impact is not on existing homeowners as they have already locked in their mortgages for 5 year terms usually… the start of a rate rise acts as an inducement to potential homeowners to get off the pot and act before the financing costs rise too much to qualify for a mortgage and to lock in the best terms…It isn’t until a few years into the interest rate increase cycle that old mortgages start coming due and with higher real estate values caused by the recently induced buying spree, homeowners reconsider the new costs versus potential windfalls of capital appreciation…thus increased offerings/supply offset the rush to buy and prices level off…This explains the leveling and decline AFTER a few years of rate increase… Having read the above, take another look at your graphs and you can see the balancing out action…(thus your expectations are most likely on point)

  97. Covenants. We don’t refer to them as ‘restrictive covenants’ anymore really, just ‘covenants’. In BC they are regulated under Section 219 of the Land Title Act:

    http://www.bclaws.ca/civix/document/LOC/complete/statreg/–%20L%20–/Land%20Title%20Act%20%5BRSBC%201996%5D%20c.%20250/00_Act/96250_15.xml#section219

    They are to do with land or buildings on land, and are essentially legal agreements between two parties – individuals, crown, municipalities etc. They have to work in the negative – you can only restrict something (that’s where the ‘restrict’ word comes in).

    Covenants can be pretty benign, quite severe, and at times unenforceable (there still exist covenants which restrict sale to people of asian descent, for example, which could never be enforced and are ignored). It’s less frequently used for something that is normally regulated through zoning, and more commonly used to restrict subdivision, or restrict development for environmental reasons, or similar. Still, their powers are quite wide-ranging.

    Land Titles doesn’t vet them for enforceability before registering, so it’s always best to check with your lawyer. If it’s registered against a municipality, it’s possible to get them discharged but an order of Council is required.

  98. Our previous uber-bear called the sales bottom nearly perfectly. EVERY month since she predicted that “sales will tank” has had a positive year over year sales increase. Impeccable timing.

    That’s exactly why I like seeing the bears on here. The time to start getting concerned will be in about 5 years or so when they finally give up. For now, so many analysts & economists are bearish on RE. Better yet, the comment sections following the many bearish RE articles are absolutely overflowing with bears.

  99. Love reading the balanced thoughtful posts on this blog, sad that administrators cannot calm down or regulate the troll posters who are drowning out educated family house owners and hunters.

    I don’t see any trolls on this board. There are diverse opinions for sure, and at times they lead to heated disagreements. That is healthy and I’m not about to step in and remove comments just because they have a very strong opinion one way or another. Let’s just make sure that we stay on topic and a comment is not solely an attack on someone else without any information. If you don’t like a certain person, just don’t read those comments.

    Let’s just lay off the name calling and we’re all good.

  100. @ Mike Grace – Someone else asked for clarification of “restrictive covenant”, which I would also appreciate. The thought crossed my mind of the area of Broadmead, which has many covenants, including no suite rentals. Surely people must have mortgages in that neighbourhood, yes? I could see a problem if the purchaser thinks they can get around the covenant and be qualified based on potential rental income, though.

  101. @VicRenter, regarding Hillside area: I’ve seen prices go up but I don’t know how the % increases compare to other areas. I have a relative in Mayfair area (bordering Hillside) and he’s been very happy with his choice. In some ways Hillside seems similar to Oaklands (large variety of types of homes – from SFH to high density apartments, parks, and major streets). But in other ways it feels different: Oaklands has more of a middle class feel to it whereas Hillside has more of a younger “beatnik/alternative” lifestyle feel.

    You still see both demographics in Hillside though. There are some great lots, homes, and views on the hills there. Not sure how the schools compare in those areas, if that’s a factor for you.

  102. John, I’ve been looking casually at places in that price range (really informally as I’m still in Vancouver) and in those areas (as well as Oak Bay). It seems (not based on any analysis – just my feel for the market) that houses sell more quickly the closer you get to the low end of the range ($1,000,000 to $3,000,000). It seems they have appreciated more on a % basis the lower you get in that range. I’ve noticed that waterfront doesn’t seem to be going up any faster than lower priced non waterfront this go around (unlike in the past). The $2,000,000+ homes seem to sit a long time.

    Maybe the real experts here such as Marko and Just Jack could chime in?

  103. BTW caveat, if the listings are down about 1000 from normal then why is it so far fetched to think 1000 people may be chomping at the bit to cash in ?

    Are you saying listings will never go back to what they were just a year ago?

  104. Homeowners don’t want to hear about the real risks of buying at the top. They want to hear how they are going to be a millionaire, like in a few months from now. I sense a lot of first time homeowners who haven’t experienced a serious up move like this and think it will never end because of groupthink.

    Sorry to offend anyone but I only post factual statements based on the latest data and my own personal experiences of successfully timing the market a few times. If you can’t handle it, don’t read it, I care not. You can always try Garth’s site. 😉

    Caveat, the market has only moved here because Vancouver is having a blow off top moment. Why werent they here a year or two ago with the same easy credit and low rates?

    Vancouver is the blue chip stock and Victoria is the junior stock that’s riding the coat tails in the late stage of a major market move. The MACD is screaming SELL.

  105. John
    there has been one or more super bears on here as long as I can remember. I appreciate the perspective if not the tone of the posts. Hawk actually links to pretty good stuff at times.

    Our previous uber-bear called the sales bottom nearly perfectly. EVERY month since she predicted that “sales will tank” has had a positive year over year sales increase. Impeccable timing.

  106. I bet there are a thousand people sitting on the fence about to hit the sell button. Tomorrow it could be all over and that is the reality.

    Bahhh. Most people in Victoria don’t think that way about their houses/primary residences. They are dimly aware that the market is hot, maybe feel a bit richer, but aren’t about to sell, especially as it would be a tricky time to buy a nice new place to move into.

    For sure higher prices are eventually going to bring some more supply onto the market. Owners of investment properties are going to cash out to some extent and there will be a few people in financial distress that take advantage of this opportunity to exit.

    Since you made the stock market analogy of “hit the sell button” – do you really think of selling a stock that is just beginning to show a bit of strength after going nowhere for years? That sounds like a recipe for investment disappointment.

    Like it or not the market for Victoria houses is showing some strength and that is very likely to persist for a few months at minimum and possibly for years

  107. @ Chris
    Myself, I’m waiting for at least a year or two ’til after mtg rates start rising (ie. inflation) before I start selling property. Vic RE definitely loves inflation. As you can see below the ‘up cycle’ continues for typically years after mortgage rates start rising. All 7 periods of rising rates since 1960 have coincided with rising prices. Central bankers are always purposely behind the curve as to inflate away public & private debt. Btw ‘up cycle’ just means since ~1970 we’ve followed a 10 years up, followed by 4 down pattern. I don’t see anything on the horizon as to why this 10up cycle that started in 2013 wouldn’t continue until about 2023.

    Chart compliments of DavidL.

  108. @mikegrace – thanks for sharing your experience. What’s are examples of a restrictive covenant?

  109. Came across this article today:

    http://www.theglobeandmail.com/real-estate/vancouver/brokers-concerned-about-real-estate-offers-made-with-no-conditions/article29603246/

    Pretty much sums up my last 3 weeks, with multiple sets of clients trying to buy using unconditional offers. Advising on unconditional offers is an unfortunate reality for (some) mortgage brokers right now. I’ve been really careful to advise clients that no matter how much diligence I put into their file, there is no way to completely insulate them from the risk of financing collapsing.

    To minimize my client’s risk, I’ve been working my bag off by doing serious diligence on both their borrowing profile AND the property they are interested in BEFORE they make their offer. This is something I know only a handful of brokers are doing – I assume everyone else is just ‘pre-approved’.

    My Friday and Saturday nights are spent poring over property disclosure statements, titles, and detailed mls sheets looking for any potential problem areas:

    Did you know for example, that many lenders won’t touch a property with a restrictive covenant?

    Make no mistake, this market will create some sad stories of people losing deposits because they simply think they are “pre-approved”.

  110. I’ve been reading this blog for about 4 months now. It was good for a few months, but Hawk is just going rampant and making wild accusations seeming to be angry at anyone/everyone who wants to own a home. Its a broken record. Us, we bought our house in the core just over a month ago, not engaging in a bidding war, and I feel perfectly happy and comfortable at the “risk” i’ve engaged in because, like most who read this blog, we’re in it to have a home, not an investment. Just like JD posted.

    My point is, this blog was fantastic – it made for good reading and provides a lot of information. But hawk’s posting habits and rants about everyone make me not want to come here anymore. Its incessant – that level of negativity is unhealthy. So, like many other, I’ll probably stop reading the posts here.

  111. I feel the same way. Can we get back on topic now. Or are we just going to belittle one another? I am sick of seeing it. I enjoy the analysis. But come on guys. Get your heads out of your arse and be adults.

    Dont’ Feed The Trolls!

  112. Love reading the balanced thoughtful posts on this blog, sad that administrators cannot calm down or regulate the troll posters who are drowning out educated family house owners and hunters. Not sure the purpose to spend all day posting every 10 minutes insulting people that have done well by purchasing homes in the Victoria region. I was looking for another real estate blog to read that was more mature but Vibrant Victoria is pretty quiet. This is a great community that seems hyjacked by an rabid angry poster or two.

    Anywho, hopefully administrators can help calm down the conversation so all can join in. (Speaking mainly of Hawk, and a little Just Jack).

    I would be interested to have more info about SFH in the core, but specifically Gordon Head, Arbutus, and Cadboro Bay from 1-3m. It seems that there is quite a lot of homes that are not selling in that range, though it appears it is the land for the price (plus cost to demolish old home).

    Also, would love info about up island towards Comox. Last year we looked around there and prices there were same as Gordon Head (tiny bit more land, but prices just as high). Couldn’t figure it out.

    Also, the market was quite hot there and in Victoria last spring if you recall.

  113. When rates soon start heading back up to 5% and mortgage payments balloon 30% we’ll see whose puking then, Psychovert. Credit cycle is ending, not starting. Do you not read the news ?

  114. Just 3 minutes ago you accused me of being on crack and now you want me to engage you in reasonable conversation? No thanks.

    That is such an awesome shut down!

    Hawk is only the latest bitter renter to vomit daily — almost hourly — rants about the crash that never does arrive. Alas, we longtimers have seen so many like him/her come and go.

  115. Nan, we’re talking 20% gains in last 3 months in many sales, not 8 years. That is highly alarming and extremely dangerous market conditions.

    If housing was a stock the put options would be off the charts.

  116. JD, you waste half an hour telling me I know nothing and I tell you we aren’t Manhatten or Hong Kong and you’re offended ? LoL

    This “my house is my security” talk is nonsense but your security is being flipped like a penny stock on a daily basis. Not secure in my books. That’s crash potential behaviour.

    Sounds like the bulls can’t handle the truth as Jack Nicholson used to say. 😉

  117. So long as the Calgarians I happen to meet when visiting my old hometown wistfully sigh when they hear that we live in Victoria, our real estate market will be just fine.

  118. Well, sadly for some, I’m not going anywhere. The administrator of this blog tolerates me!

    On a different note, I enjoyed reading your well-written and thoughtful long post, JD.

  119. I thought there was a bubble 8 years ago when it went up 2.5x in 8 years, and it probably was (as evidenced by the US blowing up) but the Canadian banking system/ CMHC was able to hold itself together and keep things quiet enough that we just rolled through it. This totally pissed me off (for years), but oh well.

    Now houses in Vic haven’t moved much in 8 years, interest rates are super low (and will not increase quickly – it even took 25 years to climb from 3% to 20% from the mid 50’s to the 80’s) and all currencies have been devalued (both in relation to other assets and other currencies) enough that houses in Victoria look relatively cheap for lots of Canadians.

    Housing in Victoria is expensive, and certainly more expensive than it has ever been relative to incomes and rents but as I said before I think that is becoming less and less relevant as a valuation metric. 20% in 8 years isn’t a bubble and if a family/ work mobility based migration trend has been started, I would expect price increases to beget prices increases for some time. Although most larger cities have lower average incomes than Victoria, Calgary, Vancouver, Ottawa, Edmonton & Toronto probably each have as many people making over @250,000/ year as Victoria has people.

    Maybe retirees won’t come because they don’t want to leave their kids but I would bail on my parents to have a better life for my kids if I needed to. I have friends who commute 1 hour each way in Toronto every day. 2 hours wasted in a car or train not seeing their kids. Everyday. Not a hard sell to move here if you can balance out work, childcare, commuting, weather etc. Not a perfect scenario for most but as we’ve seen it doesn’t take many to mess up the market.

    I have changed my tune on RE in Victoria quite substantially in the last 2 years, after being only half right on prices coming down since 2008. I got lucky and bought at the right time, but if you have a family and small kids I would think REALLY hard about staying out of the market completely. Take Jacks advice and don’t enter crazy bidding situations, but if you need a house buy one you can easily afford and continue to build a diversified portfolio of stocks. Don’t sit on the side lines and rationalize 0% in RE and not buying because you’re waiting for Oak Bay to crash because A, you won’t lose that much money and B, in 5 years, you could find yourself in the same place as Vancouverites who are essentially being evicted from their city. Next stop Comox for you. (not that there’s anything wrong with Comox, but I prefer it here)

    I still believe that Foreign money should stay the hell away from our residential housing market, but I don’t think that will affect Victoria much even if the flow is cut off. There is enough money already in the hands of Canadians who appreciate Victoria that a policy that crashes the major centers of foreign demand could in fact increase demand for Victoria as folks look to cash in and lock in before prices come down where they live. Prices have literally tripled in many parts of Vancouver and Toronto since 2008. Prices aren’t ever going down the 60-70% they need to for most folks who bought before then to lose all their free money.

  120. Just 3 minutes ago you accused me of being on crack and now you want me to engage you in reasonable conversation? No thanks.

    Again, read. I’m not speculating, or counting on profits. People like you have been saying the same thing since houses in Kitsilano broke through $500k. It’s just so much blather.

    Ciao!

  121. JD, I stand corrected but your story book was a little long in the tooth.

    So you will be double in 2 years from 5 years ago when average prices were $600K range ? That’s still high expectations for a major spike beyond anything in Victoria history with household debt levels at 170%.

    Trying to guarantee your profit in 2 years is like slim and none but keep dreaming.

  122. @ Hawk
    You added a space before the period in your second sentence. Better correct it before Introvert sees…

  123. Jack will always be the big dog here with the most accurate, independent, unbiased info and perspective with hilarious humor tossed in . Introvert has never produced a single post worth remembering.

  124. Hawk, your reading comprehension is poor. I didn’t say housing was going to double in two years – I said in two years it would be double what I paid (I bought 5 years ago remember?) Details don’t matter though, right?

    Regarding Manhattan, I’m talking trends. Urbanization. It’s happening, walk over to the library window and look outside.

  125. JD , get off the crack, Victoria is not Hong Kong nor Manhattan, though house sales are dropping big in Hong Kong for 8 months now. No land there right ?

    Prices are going to double in 2 years ? Do you work with Mike at the media promotion department ? Lol

    To think that an out of the blue insanity phenom for 3 months is now the norm for years to come is extremely naive.

    The question was do I take the money or spin the wheel for another imaginary $200K .

    This is a lottery auction market not a balanced market. In other words a total crap shoot to any higher gains when you can lock in almost guaranteed profit. You are sucked into a mania.

    I bet there are a thousand people sitting on the fence about to hit the sell button. Tomorrow it could be all over and that is the reality.

  126. Chris, about the only benefit we’ll see from this is a little bit of paper gain that will make the bank that much more willing to throw a margin account at you, or the ability to sell in the future and downsize comfortably. The downside is that my children likely won’t be able to afford what I can, and other young families caught out and/or not as fortunate as I will not be afforded the same opportunity. Such is the way of the world – my folks were both teachers and own 3/4 of an acre on 10 Mile Point. Notice that if you questioned these days how two teachers are not able to afford something there, you’d get the ‘well duh’ look. So it goes…

  127. JD I see you are a very rational person and I totally agree with your perspective (though I hate gardening). I’m always speculating as I read these blogs thinking of our own house but in reality my family would never let me sell! They love our house and the neighbourhood (and so do I). I tend to look at it as a commodity and they look at it as a home!

  128. I think many readers here value the information and arguments contained in Just Jack’s posts, even if they don’t agree with them.

    On the other hand, Introvert doesn’t seem to contribute anything except for snarky comments and pedantic grammar lessons.

  129. Before you start archiving that I said the word “bubble” be sure you understand that I said it is highly unlikely to happen given the information available today.

    Let’s be clear, Just Jack. Given any information, at any time, you’re quite terrible at accurately predicting our real estate market.

  130. Hawk, your advice is at least as irresponsible as anything I’ve seen here. I’m not trying to be combative (it’s all in good fun as you’ve said earlier right?) so here we go:

    Consider Marko’s figure which indicates the biggest YOY drop in the last 20 years is 2%. Consider also that, unlike the ‘realtor economics’ of relative supply, a land economist would consider absolute supply. How many new lots are they making in the core? Virtually none. The SFH is an increasingly unaffordable beast, and rightly so. This is a pattern played out in urban centres all over the world. How’s that SFH price in Manhattan? This affordability issue is typically indexed by the price of a SFH, and the condition of the house is always mentioned – ‘a horrible moldy box in Kitsilano is 3.5m’ without a mention of property size. Garth Turner does this every day. These pieces of ‘evidence’ as to the ridiculousness of it all ignores the basic economics of the situation. No new land, increasing population, protective community associations, lack of serious, effective affordable housing strategies, a decade of cheap money. Underlying it is the fact that there has been an accumulation of wealth in our society that insulates even moderately leveraged capital from typical economic indicators like wage stagnation and rising interest rates.

    The market is fairly rational at the moment. Look at housing prices on the West Shore they’re affordable for a family. Until recently, my own area of South Jubilee was the same. I’m a wage earning 40 year old professional with a professional wife who’s working half time. We have two little kids. I bought almost 5 years ago. I did not buy as an investment. I am not selling. I’m not a speculator – I bought security for my family. I bought a good house in a good area. I can afford it. There’s a house selling in my neighbourhood for way more than I paid, not as nice. Are speculators showing up? No, it’s young families. It hasn’t sold (or even had an offer as I understand) after 10 or so days being on the market because people don’t really like the layout. Is this massive hysterical speculation? No. It’s just people looking for a house in a nice area, so that they can enjoy a life together. Some of these people are from Vancouver, and have more capital. Adding out-of-market will increase the price.

    Listening to you I should sell all that and become a speculator in a market environment which has everything pointing to rising prices. I should abandon my security and instead rent (rent what comparable I’m not sure – we have virtually zero vacancy), placing my children at the whim of a property sale at any moment, or perhaps huddle in a condo and hope for this crash that is not going to happen. Why would I do this? If interest rates go through the roof, people in my position (SFH buyers in the core) have several options due to this capitalization we’ve had over the years:

    Sell my stock portfolio and cover the bulk of my mortgage (like a lot of Victoria professionals I have a public sector pension, so I don’t really need my stock portfolio)

    Get my parents to give me the money to cover my mortgage (much like everyone else in my position, we have true generational wealth thanks to several things)

    Put a suite in (i don’t have one now)

    Conversely, the range of possibility for me if I stay is probably around -2% to ~20% paper gain over the next year or two. Plus, I can watch my garden grow, and be happy. I’d be really stupid to sell right now. To say otherwise is to ignore what’s happening, to be ignorant of history and economics. Go on and keep screaming crash. Let’s check in 2 years down the road when my house is worth double what I paid thanks to the convergence of many of the issues I’ve mentioned above. You’ll be saying the same thing. I’ll be way ahead.

  131. Ultimately if you need a home to live in, and want to stay for the next 20-30 years, it’s good to be a homeowner, but if you’re only in it for the short term (5 years), anything can happen, so be prepared for risk.

    Prices dropped in Victoria from 1981 to 1984 between 30% to 40% average; my parents’ property dropped from $123k to $76k. Just a data point.

    Real estate markets are global now, and one of the major drivers of prices in all real estate markets (no matter what % of buyers are local) is the Chinese economy, so we should look at how that is doing and if the renminbi is being devalued, eg., are people taking money out of the Chinese stock market, is the economy tanking and are more people fleeing, etc. – which affects primarily Vancouver, but then HVM moves to the island.

    More details here:
    http://www.vancouversun.com/business/china+market+turmoil+likely+have+impact+real+estate+economists/11637481/story.html

    Because it’s easier than ever for people to “take their money and run” it’s hard to predict when that’ll stop, especially when it’s happening on a global scale.

  132. Since the conversation has moved to the luxury home market – here’s a link about luxury product sales (mainly cars but does reference homes) in Vancouver.

    Excerpt in The Province: http://blogs.theprovince.com/2016/04/12/how-serious-is-vancouvers-real-estate-crisis-the-new-york-times-is-profiling-us/
    Original full article in The NY Times: http://www.nytimes.com/2016/04/13/world/americas/canada-vancouver-chinese-immigrant-wealth.html?smid=tw-nytimes&smtyp=cur&_r=1

    If you don’t have time to read the articles you might like these excerpts. These are very young adults with access to massive amounts of money that few of us can comprehend. At their age I would have likely behaved as they are in the same situation.

    China’s rapid economic rise has turned peasants into billionaires. Many wealthy Chinese are increasingly eager to stow their families, and their riches, in the West, where rule of law, clean air and good schools offer peace of mind, especially for those looking to escape scrutiny from the Communist Party and an anti-corruption campaign that has sent hundreds of the rich and powerful to jail.

    The Vancouver Dynamic Auto Club has 440 members, 90 percent of whom are from China, said the group’s 27-year-old founder, David Dai. To join, a member must have a car that costs over 100,000 Canadian dollars, or about $77,000. “They don’t work,” Mr. Dai said of Vancouver’s fuerdai. “They just spend their parents’ money.”

    “I could be in danger if people saw me in a supercar,” she said, her Breguet watch, worth more than a BMW, glinting in the sunlight as she drove the Audi through town.

  133. LeoS, what wages ? Where are the wage increases of 5 to 8% that early 80’s had to drive prices higher at similar levels ? 1% or zero wage hikes don’t cut it with 85K average family income. Average income for 10% down qualifies you for a condo or westshore box, not a 700K house in the core even with a renter.

    There’s some seriously irresponsible advice being doled out here by so called experts. Like Nortel shareholders chat board at the top. That’s why they call it a mania.

    Rates are going nowhere but up. Forget the negative interest rate theory, ain’t gonna happen.

  134. I’m curious about the answer to Mikey’s question, too. I’ve been curious about higher end property in Victoria for some time.

    I see a number of $2,000,000+ properties on the market for a longer time especially compared to sub $1,500,000 properties. I looked at a $2,600,000 rocky high bank property on Mount Baker View in Ten Mile Point and it has been on the market a while (really great views).

    There’s a rocky low bank waterfront property on a prime street in Uplands that looks interesting, too, at $3,250,000.

    Keep in mind that a modest west side home or a luxury Vancouver condo would go for those waterfront (in top neighbourhood) prices in Victoria.

    I would move to Victoria in a heartbeat if my business was not so Vancouver focused.

  135. The risk of trying to squeeze out another $100K over the $150K you think it’s worth right now is at extremes and market is much higher risk to just top out then fade , then melt like it did when I got out at top in 81.

    Everyone said “where you going to live ?” How about renting a sweet pad by the ocean for a couple years and watching the meltdown. I had a great time waiting it out and buying back in 40% cheaper.

    This smells exactly the same and debt loads were nowhere near the same levels. It’s an over priced mania market. If you are thinking of getting out, just do it.

    Easiest cash you will ever make, it’s not different this time. It’s a massive credit bubble of humongous proportions with multiple outside financial forces that could go at any time. Greed kills.

  136. I would sell and rent in the same neighbourhood and resign myself to spending $2,500 – 2,800 a month

    To be blunt, I think that is a terrible idea. With these market conditions prices are rising and rising quickly. Yes it could turn around, but that is a huge gamble on unpredictable external factors. We had a terrible market for years and it took a few years for the median to drop 10%, while it rose almost 10% in one month.
    If we shoot up the risk of a sharp correction is amplified but also would need to correct much lower to make it worthwhile.

    Let’s remove all foreign buyers from the equation. Local incomes support prices as they were end of 2014 and I would expect prices to climb from there driven by the local factors. So the floor isn’t even that far below us yet.

  137. My Other experience around this time was taking a run at a beach front property on Saratoga Beach. One of the campgrounds there was selling. After being on the market for 1.2 million since 2007 they were finally capitulating and it was listed for $690. We could actually make our eco yurt village idea work for that! I made a super low offer just to feel things out. It was a Friday and the realtor said no way and there was someone else (there always is). I let it rest over the weekend and on Monday came back with an offer of 620. It was sold for that over the weekend… 620 for a beach front property on Saratoga Beach 2011!!!!. They carved it into a strata RV lot selling each of the dozen lots for around 120.

  138. Of course I didn’t say it couldn’t happen again. It will. What I am saying is that you are talking like it didn’t happen. As if it is the cusp of it happening when we are on the flow out of that scenario. I’ll say it again for all your viewing pleasure. I bought a detached house in the nicest area of Fairfield for under assessment, For a solid amount less than what it was bought for previously, I had no competition and I even re-negotiated a lower price after the inspection. My assessment is up by 35% since I bought it in 2012. So we were in the exact conditions you describe. You were just too busy predicting a visible crash to notice….

  139. As I understand what you are saying Dasmoalderon is that it could never happen again like say an earthquake, falling oil prices or other commodities.

    You really don’t understand. The last four years there were calls. I literally mean if this was a bubble there would be NONE , that’s a rarity but it happened in several countries and in Vancouver in the early 1980’s for several months until prices dropped to encourage buyers. From my recollection prices in Vancouver fell some 40% in four months. That’s a bubble not a correction.

    Before you start archiving that I said the word “bubble” be sure you understand that I said it is highly unlikely to happen given the information available today.

    Marko’s comments make sense if the economy is still running along as it is today but there are fewer sales then prices wouldn’t likely decline very little. But that’s not a bubble, that’s a demand-driven correction. There is no sense in keeping people employed in the construction trades when no one is buying homes. The collapsed housing market would put us in a recession.

    You wouldn’t sell your primary residence but how about your investment condos?

  140. There is no way on earth I would sell right now without a clear plan. Let’s say your house is worth $800,000 today. In two years it could be $1,000,000 at this pace.

    Let’s say the market 100% craps out and we go from 10,000 sales in a year to 5,000 sales in a year. Your $800,000 home today will maybe be $775,000?

    The biggest YOY drop we’ve seen in the last 20 years has been 2%. The biggest YOY drop we’ve seen in 30 years has been 5% (1995).

    The risk of the market going up is much higher than that of a drop.

    If I prices shot up to the point where I can sell my investment properties, pay my capital gains, and completely pay off my house I would do that but still a bit more pop in that market for that to happen.

  141. One problem that I have with these over asking price sales is the lack of a sales history for the property in the last decade. Most of the sales seem to be from sellers that have owned their homes for more than a decade and have recently done a substantial renovation. That makes any re-sell analysis of how prices have changed very difficult unless you massage the data with sales from other areas and property types and use rolling averages and medians. There just isn’t a large enough set of data.

    That makes most of us totally reliant on the HPI from the board. Unfortunately no independent body can cross check that index because it relies on personal assumptions made by the board’s analyst.

  142. If people are leaving high priced cities for lower cost cities, that also means people are leaving high priced Victoria for lower cost cities too. Personally I don’t think this is the cause of our higher prices. Yes, more people are moving here but still our market is dominated by local buyers. And an influx of out of town buyers doesn’t help to explain why so many cities are experiencing the same thing at the same time as parts of Greater Victoria. Victorians just like those in other cities are simply hoarding real estate because of the low interest rate. Eventually the higher prices will negate the low interest rate benefit.

    This could be a national housing bubble? However, in the way that I look at bubbles there would be very little indication before a full crash if it were a bubble. On Friday the calls are coming in to the estate agents’ offices, then on Monday not a call. The market dies off just as quickly at it started. Since asking prices are sticky on the way down, it would likely take years before prices moderated low enough to encourage buyers to return to the market. That scenario is a rarity. I would put that scenario as highly unlikely to occur in the next 90 days given the information that we have today.

    But I reserve the option to alter that opinion if the listings to sales ratio suddenly shoots up to over 2 new listings to every home that sells. If it goes to 3:1 then the amateur home investor is fucked as they have to de-leverage faster than home prices drop.

  143. Selling your home in the hopes of buying back in later for cheaper is a fools move. As I said before, like shorting a stock, the downside is huge. Why take such a huge risk?

  144. Agree with LeoS. If it’s your primary home & you need a place to live, then you’re gambling. No one knows where this market is going. It might shoot up quite a bit if HAM & HVM keep flowing. I wouldn’t speculate & buy more or over-leverage, but keeping your primary residence, esp if mortgage free, is probably a good idea.

  145. I would sell and rent in the same neighbourhood and resign myself to spending $2,500 – 2,800 a month. Do this for a year and then reassess. Interesting how it is perceived to be pointless even though prices have shot up suddenly.

    This period reminds me of my time in Calgary – we bought a condo for $250k in 2005 and in 16 months had a realtor approach us with an offer for $420. I took it and moved back to Vancouver. Over the next year we probably could have got $450- 460 for that condo but that was the most it did – the same condos have been in the low $400’s ever since.

  146. I’m thinking of getting a hold of Marko if I could really get $200k over the assessed value of our house and question why I would hold out for even more outrageous gains

    And do what though? Unless you are leaving Victoria I don’t see the point.

  147. I don’t know how long it will last. No one does. I don’t think it can last forever but prices are continuing to rise now. It has lasted a long time in van and to.

    If you are thinking of selling now is the best time in years. If you are buying again in Victoria it might not make sense to sell. You don’t want to sell and then have to buy in higher in a bidding war. Renting and waiting for a downturn could very well see you priced out

    Our friends just sold in Victoria and downsized in a cheaper area. That made financial sense for them.

  148. Interesting Mike. 5 of the most expensive areas of Dublin are down over the last year so looks just like London, New York and Miami where the rich have stopped buying. Vancouver should be next then down goes the house of cards with a ripple effect over the island.

  149. Anyone else (besides Hawk) questioning the longevity of the current atmosphere (100K + over asking deals)? – it seems to have started a few months ago with no real driver. The activity also seems to coincide with the greater regulatory attention the Vancouver market is getting and the upping of the insanity there ($1,000,000 over ask). When investigations and volatility hits stocks it’s typically wise to exit first and then ask questions. I’m thinking of getting a hold of Marko if I could really get $200k over the assessed value of our house and question why I would hold out for even more outrageous gains (I know they are possible because of what I’ve seen in Vancouver).

    Most people here appear to believe the current situation is normal (after a long period of stagnation and Vancouver vs Victoria prices).

  150. Ireland did however have quite the run. Interesting how they’re now suffering the same inventory squeeze – number of properties for sale in is at a nine-year low. Prices have now risen 41% in Dublin since their bottom in 2012.

    We believe you spinmaster 🙂 You must be getting tired of shorting the market since ’09.

  151. (I used to post under HappyRenter but someone else seems to have taken to using that name.)
    How do you all feel about long-term value in the Hillside area? Traditionally it’s been a fairly cheap part of the core. Do you think that its prices have gone up in proportion to Oak Bay or Fairfield? Will that area hold value over time? Does it have the same appeal as Oaklands or is it just never going to be that kind of neighbourhood?

  152. Nice spin job Mike but my January 1st post called for a US correction not TSX, I’m a gold bull remember, which is whats carrying a good chunk of the TSX. I also said oil would go down or be flat at best.

    The quote from mid month was bang on as oil continued down to $26 in mid February after the short squeeze, as did all the markets to yearly lows where I started nibbling on select stocks that I’m doing nicely on, thanks. 😉

  153. Some interesting reading on a market that sounds very familiar to Vancouver right now:

    http://www.globalpropertyguide.com/Europe/Ireland/Price-History

    “From 1997 to 2007 Ireland experienced a massive house price boom, with average used home prices up 268%, and new house prices up 216%. Ireland’s decade-long house price boom was one of the longest and biggest in Europe.

    The Irish housing boom was fuelled by strong economic growth, immigration, and generous tax incentives and grants from the government, creating a virtuous cycle of economic growth and house price increases. Low interest rates and loose credit conditions provided financing.

    When the bubble burst in 2008, it was Europe’s biggest property bust. The downturn began in 2006 and 2007, when interest rate hikes left many borrowers in difficulty, causing a housing market crash. The 2006-2007 U.S. subprime mortgage crisis added to the downturn.

    Ireland’s house prices fell by an average of 53% from the peak, compared to the typical OECD fall of 23%:”

  154. Hard to know what exactly is going on in parksville based on Vrbo. Makes me realize how much extra info gets posted here.

  155. I agree inequality is here already. I just know how hard it is to earn your way out of it. Don’t see that we should be promoting dramatic separation of affordability from local incomes through dollars earned in higher cost of living countries even if it makes me super rich.

  156. If I was a property investor I would be looking up island…. Probably cash flow positive properties to be had even. Without the short lived thrill of exciting Air BnB businesses attached.

  157. Introvert your kids if you have any and mine will be just fine most likely. Not sure that extends to the majority. Certainly will increase the divide between those that inherit in high value areas and have family help and those that don’t. Seems like it will foster greater inequality of opportunity.

    And some kids’ parents are lawyers or surgeons. Inequality is difficult to vanquish.

  158. Up island communities have seen an uptick but nothing near what we have here. After being flat as a pancake for a while they are seeing ~8% increases this year. The VIREB has some decent info actually.

  159. Interesting article on a filmmaker that’s capturing a disappearing Vancouver …
    http://news.nationalpost.com/news/canada/vancouver-filmmaker-captures-historical-emotional-character-of-abandoned-point-grey-mansions

    “‘Right now, it’s about making money – and I understand, because houses are going for a million dollars over offer, and I don’t really blame these people – but it’s destroying the fabric of the city really quickly, I think.’ ”

    “He doesn’t expect his films to change the views of Vancouver residents and the government, but hopes they might preserve memories of the neighbourhoods where they grew up.”

  160. I’ll start covering Parksville next maybe that’ll get rid of them.

    Yes please. Maybe a post on what is happening in different communities up island would be good.

  161. Interesting how Garth has finally seen the light and is calling for a crash now too instead of his mild correction of 10%.

    Makes me laugh. Garth has been predicting a crash (wrongly) for so many years I’ve lost count. He wrote a book on it in 2008. Last couple of years he went to a “slow melt” theory when TO prices shot up instead. He’s got to get it right one year.

    Here is his 1999 advice for homebuyers:

    “If you have the bulk of your net worth in a home, you are probably at risk. You certainly will not see your wealth grow over the next 20 years. In fact, you may see a large chunk of it evaporate. Because real estate is no longer an inflating asset, buying a home and spending the next 15 years paying down the mortgage could be disastrous. Not only will the house likely be worth less at the end of that period, but the buyers could well have missed the best decade and a half in their lives to grow money in financial assets like stocks and mutual funds.”

  162. If we start calling Gordon Head – Golden Head then we should call Happy Valley – Happy Ending.

  163. But Mike the markets did tank and oil did go down for a month and a half after I called it.

    No, your prediction “Stock markets to tank, oil to continue down and housing to follow in the spring” was right at the bottom (mid-Jan) for oil and the markets. The TSX for instance is up 15% since you’re prediction in mid-Jan, which is also about where you said you were shorting again (ouch).

    On another note, I like seeing that one of our island’s most important commodities is up ~30% since Oct. Should help keep the price of new builds rising too.

    http://stockcharts.com/h-sc/ui?s=%24lumber

  164. Interesting how Garth has finally seen the light and is calling for a crash now too instead of his mild correction of 10%.

    “So what’s happening in YVR, and to a far lesser degree in 416, is classic pre-crash behaviour. ”

    “Housing’s become detached from economic fundamentals, including average incomes, net migration, debt service ratios, household savings, job creation and economic expansion. BC has turned into California, where a disproportionate amount of the GDP became dependent on a single industry (real estate). Eventually the state, the eighth biggest economy in the world (Canada is number 11) ran out of money, paying its bills with IOUs.”

    http://www.greaterfool.ca/

    BTW, what’s with this “Golden Head” thing. Sounds kinda racist to me categorizing a section of town for foreigners when there is no Stats Can to prove it. 😉

  165. But Mike the markets did tank and oil did go down for a month and a half after I called it.

    Neither are substantially higher than the beginning of the year and your infamous commodity boom call back in October is still in the gutter. Have you bought many more transitory rooming houses ? Bulls should be stocking up big right now before the real run starts. 😉

    Lots of downside ahead if the profit margins continue to disappoint like Alcoa did today. Gold’s biggest quarterly gain in 30 years since the last substantial real estate crash paints another sign of potential danger.

    Not a wall of worry in the least AG, it’s called protecting your assets and investing accordingly to what’s going on around you, not sitting in your Victoria real estate bubble.

    Why is China buying a massive gold vault in London and becoming a major player ? Because they see major inflation and will run up gold like a casino like they did to their stock market and real estate markets.

    It’s the next game in town as they begin to transfer their cash into undervalued assets. Only the dumb ones are still buying in Vancouver as FINTRAC and CRA ramp up their investigations.

    China’s largest bank buys huge 1,500-tonne gold vault in London

    http://www.telegraph.co.uk/finance/commodities/12090283/Chinas-largest-bank-buys-huge-1500-tonne-gold-vault-in-London.html

  166. Did Victoria just get discovered via the HHV blog?

    Sorry everyone. I’ll start covering Parksville next maybe that’ll get rid of them.

  167. Will be interesting to see if that continues to hold true going forward. Anything relating to local incomes starts to lose meaning if a significant portion of the buyers are not dependent on it.

    Yes. This is the new wild card imo.

    Did Victoria just get discovered via the HHV blog? How will the trajectory go? What will slow it down or reverse it? An earthquake, government intervention or a natural shift in the real estate cycle?

  168. I don’t think Bears were wrong they just didn’t know what they were looking for to prove it. Between 2008 and early 2015, markets looked nominally flat but inflation and interest rates worked together to decrease real prices by over 20% and improved affordability by over 30% in Victoria. Although you couldn’t see it in nominal prices, a 30% decline over 7 years created all kinds of buying opportunities.

    Ding ding ding. We have a winner. It took me a couple years of looking at the data to figure this out. First I thought the price run up in the 2000s was unprecedented. Then I realized that wasn’t the case. I kept looking for this “long run average” of prices or price/income that was bandied about on every other housing blog and it just wasn’t there. Then I finally figured out that the only thing that follows any kind of pattern is affordability.

    Will be interesting to see if that continues to hold true going forward. Anything relating to local incomes starts to lose meaning if a significant portion of the buyers are not dependent on it.

  169. To his credit, he held onto a junior gold stock. Speaking of gold, here’s an up-to-date versus home prices (the gold-colored line is gold). As goes gold, so go our prices?
    Inflate or die 🙂
    Afterall, this neck of the woods is goldminer central.

  170. If you are so smart, Hawk, why don’t you tell us your predictions for the TSX & oil by end 2016.

    Hawk gave his 2016 predictions in January…
    “Stock markets to tank, oil to continue down and housing to follow in the spring.”

    I guess he’s still got some time, but it’s not looking good.

  171. Vicinvestor, one more note. You should take off the blinders and educate yourself instead of asking me. I’ve never seen so many potential ticking time bomb catalysts that could cause the next crash. Many more than 2008.

    Japan is on the ropes and bleeding profusely, ECB is in tatters and failure there could open major global credit failures. Canada could well raise rates as consensus today is they are not going down any further.

    They were even discussing today on BNN the possibility if the foreign money starts to leave Canada. Everything is on the table like never before in my humble opinion.

  172. Living in Golden Head. I think the Chinese buy here because the Chinese buy here. Plus it’s the most like a super nice Van neighbourhood of all our hoods.

    “Golden Head” has diverse sub-neighbourhoods within it. I know Just Jack thinks the whole place is bland but I think it’s a bit of a generalization. There are lovely treed areas right by the ocean (north of Ferndale) and the less treed “tract home” areas are well located near the University. There are some great waterfront streets in “Golden Head” (like Shore Way, Gordon Point Drive, Vantreight).

    I am surprised at how high the family incomes are in “Golden Head” in some areas like Hillcrest – which isn’t even a waterfront subdivision with nice but modest homes/lots. $250,000+ is the average income in some areas – as much as the Uplands. This distinguishes Golden Head from many upscale parts of Vancouver and Richmond which have really low reported incomes (!).

    The less treed parts of “Golden Head” remind me of Richmond or Marpole in Vancouver.

    Marpole started life as a somewhat bland “starter” area of the upscale West Side. However, today there are new well designed high density commercial developments, underground rail, Chinese supermarkets and, yes, new super high end Chinese Restaurants (a new location of a private business club/restaurant called the Peninsula).

    Houses sell in the $2,000,000+ to $3,000,000+ range. New townhouses can go for $1,500,000. New condos go quickly at $1,000 a square foot!

    It’s definitely upscale now.

    It’s highly desired by rich overseas Asians and 80% Chinese. That’s the future of “Golden Head” minus the rail line to the airport/downtown.

  173. Your wealth effect will be used up to pay for your medical caretaking. Just saw an Oak Bay family deplete their whole potential inheritance looking after their parents for over 10 years. In the end they walked away with nearly zilch. The reverse mortgage paid for round the clock care. Your kids will get little unless you croak early with a large insurance policy. Welcome to BC’s health care system.

  174. And, imo, points to the need for greater regulation of foreign ownership. How I don’t know.

    Introvert your kids if you have any and mine will be just fine most likely. Not sure that extends to the majority. Certainly will increase the divide between those that inherit in high value areas and have family help and those that don’t. Seems like it will foster greater inequality of opportunity.

  175. @ Totoro: I guess you agree with some of this!

    I don’t think Bears were wrong they just didn’t know what they were looking for to prove it. Between 2008 and early 2015, markets looked nominally flat but inflation and interest rates worked together to decrease real prices by over 20% and improved affordability by over 30% in Victoria. Although you couldn’t see it in nominal prices, a 30% decline over 7 years created all kinds of buying opportunities. It may not be seen as a dramatic media worthy crash, but deals can materialize out of slow burns in prices as well. Those just take longer and people are generally worse at identifying opportunities that accrue a couple % per year.

    I used to be only metrics focused, and every metric based on interpretations of historical and current information has said don’t buy since about 2002. Lucky for me, before Vancouver came to town I stopped rationalizing not buying based on historical metrics and came to appreciate the rules of the then current game and why people in Victoria bought houses and I changed the things I paid attention to: interest rates & affordability. The catalyst for me was 18 months ago when Poloz announced how terrible the economy was doing and not only announced no increases in interest rates but cut the rates 0.25%. Over night, people stopped talking about interest rate increases. The relative interest rate security combined with the decrease in real prices was all I needed. I bought a house I can easily afford 14 months ago.

    I don’t think that residential real estate should be a game but complaining about the rules of the game is no way to win. Either work to change the rules or play by them, or both. Your choice, but there is no third way of winning, where the rules change just for you because your numbers say they should.

    Now people from Van have decided moving here is a good idea, for whatever reason. Paying 200k + over ask for a house may look nuts to you and I but it is perfectly rational if you won the house lottery in Vancouver, made $1,000,000 on a now $2,000,000 house and can get the same house in Victoria with the $1,000,000 in equity you got for free and can pay off your mortgage at 40 and work part time to afford everything else in life. The extra money on a bid is much less meaningful to you because unless you are Christy Clark, you are aware that you didn’t earn it. All you want to make sure of is that you get the house you want. Hence the overbidding to attempt to guarantee a successful offer. It only takes the expectation of one of these bidders to be in each crowd of buyers to ensure the price ends up higher then a rational person might pay and I am sure listing realtors are “mentioning” to buying realtors that “Vancouver is in the house” on as many listings as they can, whether they are or aren’t.

    So now that the prevailing view is that some Chinese made Vancouverites rich and now some Vancouverites are making Victorians rich. The rules have changed again and people are panicking because they were training for a game played under the old interest rate/ affordability rules, but still want to win. I don’t know what my move would be today but unless the government steps in and says folks with RE gains driven by offshore capital can’t buy in Victoria, I would think that demand will keep going for a while. These things don’t start over night and they don’t end that way either. Combine the increasing mobility of today’s upwardly mobile workforce with the potential impact on demand once the awesome houses bought in the last 3 months start showing up on the Van to Vic buyers shack owning Vancouverite friends Facebook and Instagram pages, I would only expect this kind of Van/Vic demand to increase in prime spots in the city.

    I don’t mean to add fuel to the fire, but it’s probably only just getting started anyways – a house comparable to a $1,200,000 house in Oak Bay is $3-4,000,000 in Vancouver/ Dunbar (a comparable area in my opinion). So it might be a good idea to buy now, but only time will tell.

    Going forward, unless the government sorts out the flow of untaxed capital into Canadian residential real estate markets, metrics based on historical measures will continue to be meaningless. Price/income measures because foreign capital doesn’t buy with income and price/rent because foreign capital isn’t in it for shelter – they are in it for security of capital and speculation purposes and they bid against other investors, not renters. If Vancouver profits from this and wants Victoria, I would expect demand to continue.

  176. The buy and hold strategy works for stocks too. Show him ccc or mmm – with a paid off house not sure what the issue was. Nan u should repost here.

  177. Vicinvestor, you want precise answers when you offer nothing but “invest over the long term.” Duh.

    BTW my buddy was diversified, his house was paid off then 2008 hit and all stocks got smacked on top of his over the top insane “investment”. Many do the same with HELOC’s then all stocks tank as well as the house.

    That may well be the next catalyst as stock markets are over extended with low expectations of profits .

    When both tank the pain may be too much as debt levels in last 10 years have exceeded the previous 40 years but means nothing to the bulls. It’s all “good debt” to them.

    Bankers won’t be so friendly next time, especially if they take huge hits on the many oil companies about to go bankrupt on their massive multi billion dollar debts. Credit tightens like a vice when banks lose.

  178. these types of text messages are getting to be demoralizing…..

    “Hi Marko, just letting you know my xxxxxxxx seller is working with another offer. 12 offers received and 4 were unconditional. Thank you for your efforts…..xxxxx”

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