May 30 Market Update

Weekly stats update courtesy of the VREB via Marko Juras.

May 2016
May
 2015
Wk 1 Wk 2 Wk 3 Wk 4
Unconditional Sales 320  644 979 1204
905
New Listings 392 760 1082 1343
1485
Active Listings 2533 2499 2431 2421
4043
Sales to New Listings  82% 85% 90% 90%
61%
Sales Projection 1340 1199 1310 1269
Months of Inventory

4.5

Sales still very strong, and some truly astonishing sales out there as evidenced in the comments.

Sales per day are heading downwards though, are we starting to crest the hill of the buying season already?    We will be very close to another record either way.

At 90% sales to list, we are still shedding inventory though.   With under 2500 properties on the market (and some 600 of those are commercial), there is still very little choice out there.

Friend of mine just bought a house after many lost bidding wars.  The winning touch was a personalized letter and photo with the unconditional offer.   Anyone else heard of this working?  Do we need to start coaching up potential buyers on their creative writing skills?   Is this a market or a gong show?

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78 thoughts on “May 30 Market Update

  1. Hawk is still at it with simplistic interpretations; “It doesn’t get any more straight forward that this market is toast.”
    Hawk makes that brilliant deduction based on an apparent levelling off of the markets and the banks doing their due diligence with borrowers.

    Economics 101 has a simple explanation for the current state, and several bloggers on here have repeatedly alluded to its inevitability: Economic Equilibrium.
    https://en.m.wikipedia.org/wiki/Supply_and_demand

    What it means Hawk, is that our local market is maturing and there looks like a balance in supply and demand is forming. There are nine possible scenarios going forward based on supply and demand doing one of three things: Increase, Decrease, No Change.
    Here are the nine scenarios for you to ponder Hawk:
    -Supply Increases while Demand goes up, or down, or stays the same

    -Supply Decreases while Demand goes up, or down, or stays the same

    -Supply Stays Same while Demand goes up, or down, or stays the same

    Hawk, you rant daily, and constantly predict that Supply will rapidly increase and Demand will suddenly decrease. Economic Equilibrium suggests supply and demand will go into a balanced state first, and then will likely stagnate for some time.

    To give you a partial nod Hawk, you will likely be a bit correct because the pendulum always swings too far and will need some correction,but probably just a few percentage points decline over an 18 month period; but not yet…

  2. @StepbyStep “I wonder if sale price to list price ratio is a solid measure or if list price has climbed as sellers adjusted to market?”

    Good point – I’ve also noticed sales prices have adjusted upward over the last few months, so monthly comparison of the sale price to list price ratio isn’t a true measure of what’s going on – both are moving targets. Maybe both could be plotted on a graph as separate lines – and they would probably both be increasing.

    eg., Oaklands jumped this spring to $700k to $750k out of the blue, when last year they would have been $500k to $600k (?) – even then, there have been well-over-asking sale prices. If the data was only focused on houses in Victoria, OB, Saanich East/West, Esq/Vic West, it would probably show something different.

    Question: does anyone know what 1858 San Lorenzo Ave (in Golden Head) sold for?

  3. Wondering what it’s like to be a seller these days. I actually think it could be quite stressful because you really don’t know what you’re going to get until the auction runs its course. And that could make buying before selling difficult since you won’t know how much to spend on your move up/down house.

  4. If I’m reading the vreb stats correctly, there’s just 1.2 months of condo inventory (with a ton of sales last month). That’s crazy considering all the new building in recent years. Are people priced right out of houses and buying condos?

  5. JJ, your stats show a whopping 18% increase in price from Jan – May. That is a serious jump. Why the bearish sentiment, then, for you & Hawk? The flow of HAM/HVM into Victoria has just started. My realtor just had a combined $660K over-ask on 3 homes (300, 200, 120)!!! The future direction is unpredictable, but we’ve had monstrous growth over the last 12 months. My own detached purchase had backup offers >150k above mine.

  6. The sales to list price ratio is of no use whatsoever. It is simply a marketing tool.

    It supposes that the agent is reasonably pricing the property right from the start.

  7. Great stats Jack. It’s obvious the market is topping out at the hottest month in history. The median should have been much higher for all the media emphasis on psycho bidders.

    Love how the realtors are pumping on the news about this is catch up to Vancouver lIke its some entitlement. What a fricking joke. They’re like Venus snd Mars, two completely different markets.

  8. 1979 to 81 had 70% increases but wage hikes were 5% , & inflation was thru the roof. HELOC’s didnt exist in 81 but banks were cutting back big on mortgage lending and owners began to go under as they didn’t requalify and were forced to sell or walk away. I knew a few.

    With US rates going up this month or next and the beginning of the end to free money I wonder how many maxed out over leveraged borrowers who have flown under the radar at their bank until renewal time will have to dump the shack or pony up another 50K or so.

    Banks cutting back on lending for houses doesn’t get any more clearer. They are scared shitless of a crash.

  9. @jj I wonder if sale price to list price ratio is a solid measure or if list price has climbed as sellers adjusted to market?

  10. I’m from Edmonton… Edmonton people are great 😉 I can’t breath there and I don’t like living in snow half the year and mosquitoes eating me the other half….

  11. I’ve always liked Edmonton. I think it’s the people that make it such a wonderful city.

  12. For those that are interested the sales activity for houses in the core districts decreased for the first time last month.

    Month Sales, Number of
    Jan 122
    Feb 228
    Mar 318
    Apr 377
    May 337 down 10.6%

    And the median prices for houses in the core flat lined last month

    Month Sale Price, Median
    Jan $655,500
    Feb $681,500
    Mar $740,000
    Apr $758,000
    May $757,000

    And so did the average house price

    Month Sale Price, Average
    Jan $736,731
    Feb $776,810
    Mar $857,915
    Apr $883,311
    May $892,374

    And this all happened in a time where the months of inventory, new listings to sales ratio and days on market have been showing a market that is extremely in favor of the seller.

    Month Months of Inventory
    Jan 2.84
    Feb 1.66
    Mar 1.31
    Apr 1.06
    May 1.09

    Month Active Listings, Number of
    Jan 347
    Feb 378
    Mar 418
    Apr 398
    May 368

    Month Days to Sell, Median
    Jan 17
    Feb 10
    Mar 9
    Apr 10
    May 9

    And what about the sale price to list price ratio for the last five months?

    Month Sale Price to List Price Ratio
    Jan 99.1%
    Feb 100.0%
    Mar 100.9%
    Apr 100.9%
    May 101.3%

    Things that make you go hmmmm!

    Once a glass is full you can’t make it fuller. And that’s the same with prices. Sure someone from Burnaby or Surrey will pay an extreme amount for a property but they are the exception not the rule.

  13. Re: a 44% twelve-month gain
    It is worth noting that our previous 10-year cycles experienced ~40% years.

    1971-81
    1985-95
    1999-late’09

    I’m sure 1971-81 had at least 2 or 3 years of around 40% gains, and I’m sure ’85-95 had a contender. So, unless it’s different this time…
    Besides if Edmonton of all places was able to pull off a 50-percenter in 2007, I figure Vic should be able to do it this cycle. Go Vic go!

  14. Vicinvestor,
    I take back that apology. I have no delusions, I just posted major facts that banks are reeling in mortgage lending. It doesn’t get any more straight forward that this market is toast.

    You say Mike is joking yet you make market timing predictions that this will continue up another 30%. Sounds like a Trump fraud flip flop statement. Why aren’t you buying for that easy 30%? Hypocrite.

  15. Yes we all make typos! so I was wondering where Michael’s numbers came from. If you “compound” 3.1% over 12 years you get 144% and 7.1% compounded over 12 years is 228%. But we’re not talking in terms of years or exponential increases, so those numbers need a review 🙂

    Then you have to take into account spring vs fall seasonal adjustments, so it gets complicated fast.

  16. Obviously Michael is joking. However, we saw >20-40% price appreciation in all lower mainland jurisdictions this past year. So 20-30% change in Victoria is not unrealistic going forward. As stated previously, May 2015-2016 was +20%! Victoria prices have fallen significantly behind lower mainland. Fraser Valley prices are the same as Victoria! Where would you rather live? At the same time, as Hawk says, there is substantial risk in this market for speculators & flippers & the over-leveraged. While Hawk suffers from several biases & delusions (market-timing, future predictions, hindsight bias, & many more!!), he does have a reasonable case that the market isn’t necessarily safe.

  17. I was going to reply to your math Michael, but I think I’ll just let your comment hang there for everyone else to think about.

  18. Torquay was bought Oct 2015 for $522k. Prob $150K worth of renos Max. Not a bad profit in 7 months!

  19. What happens when the Big 5 have to start calling in the mortgages on all those Chinese owned Vancouver properties, thinking the client actually owned all the land of their overseas property ? Me thinks this could be the next catalyst. When the Chinese didn’t even know I’d say this is not going to be pretty.

    In China, Homeowners Find Themselves in a Land of Doubt

    “Like every other homeowner in China, Mr. Chen and his neighbor own their homes but not the land underneath them. All land in China is owned by the government, which parcels it out to developers and homeowners through 20- to 70-year leases.

    When the neighbor — whose surname is Wang — tried to sell her apartment, local officials told her that her lease on the land had expired. To sell her apartment, they told her, she would have to pay them one-third of the sales value.”

    ““People don’t know what to do,” said Ge Qingchuan, a retired real estate agent who stopped his motor scooter to talk. “No one paid attention to land leases, but now there are problems.”

    “For example,” he added, “if you are buying a new apartment and using your current apartment, with a 20-year lease, as collateral to borrow money, you won’t be able to do so. If the banks see your land lease is expiring, they won’t lend you money.”

    http://www.nytimes.com/2016/06/01/business/international/in-china-homeowners-find-themselves-in-a-land-of-doubt.html?smid=tw-nytimes&smtyp=cur&_r=0

  20. “Now you see why we don’t rely too heavily on the monthly #s although it wouldn’t at all surprise me if we’re up 44% or more in the next 12 months.”

    You should practice up for Yuk Yuk’s, that’s hilarious. 😉

  21. Alright, a blistering 3.1% gain over last month.

    Let’s see here… 3.1% compounded over 12 months means we’re now running at about about a 44% annualized pace. Condos on the other hand at a 7.1% gain over the past month, compounds to a whopping 228% yearly pace!

    Now you see why we don’t rely too heavily on the monthly #s 🙂 although it wouldn’t at all surprise me if we’re up 44% or more in the next 12 months.

  22. Michael,

    We are in a completely different market than a year ago.

    When it comes to the benchmark HPI, It’s the month to month numbers that I want to see.

    They’re more important to show if the market is slowing down or speeding up.

  23. Mike,

    You should frame those numbers as you’ll never see them again in your lifetime. One to show the grandkids when you tell them you coulda, woulda, shoulda sold into the easiest money ever made in Victoria. But you didn’t. 🙁

    ‘We just took our foot off the gas.” – Scotia

  24. From the OECD report…..a disorderly sell off is a very scary reality.

    “The OECD says the consequences of those bubbles popping would be felt far beyond the housing sectors.

    “The main domestic downside risk is a disorderly housing market correction, particularly in the high-price Toronto and Vancouver markets,” reads an excerpt from page 103 of the OECD report. “This would damp residential investment and private consumption, and could threaten financial stability.” “

  25. VREB % gains since last May:

    — Median — Benchmark
    SFH 19.3% — 15.5%
    C’s 12.0% — 10.8%
    THs 11.9% — 11.9%

  26. The best signs a perma bull is sweating bullets that the party is over and he missed last call is when they start dredging up old posts. Been a common occurrence on here lately as the evidence mounts daily that this bubble is about to pop.

    Memo to Mike, the banks have a new government in power now who listen and don’t try to stay politically correct and react quickly. Harper screwed the nation several times over and now it’s time to pay the piper.

    The peak has passed but the bulls will go down the hill of denial squealing like you’ve never heard before. The banks have sounded the alarm, credit lending is being squeezed without a recession, that’s the worst news ever for a bull, especially the “maxed out on leverage” bull.

  27. Eventually the OECD might get something right, but if you listened to them in say 2013 and sold your home, or were renting and didn’t buy like you had planned to, you’d be one sad camper.

    Canada ‘Vulnerable To A Correction,’ OECD Says
    06/05/2013 2:01 pm EDT

  28. I’ve said it in past posts. Canadian banks are followers and not leaders. They’re just waiting for someone else to do it first and then they pile onto each other.

    Of all the banks, I expected it would either be BNS/SMC or BMO that would be the first to make a move towards less risk. In my opinion, SMC probably has the best of all the banks for quality control of mortgages. BMO is second.

    This may be a bit of an over reaction by BNS/SMC because not all sections of the residential market are at the extreme end of the scale. SMC needs some kind of gauge of when the risk of lending is and is not acceptable. And that risk evaluation is what the OSFI has been trying to determine as well. In some cases SMC may only need to lower the loan to value ratio from 80% to 65%. to reduce risk but they have to know where, what type of properties and for how long they should have a lower loan to value ratio.

    I think what all of us have done on this blog would impress the bank’s head offices as to how to measure risk in the marketplace. I know Leo’s graphs constantly WOW me.

  29. Hawk has good points but fundamentals don’t always move markets. Look at Amazon vs Apple…. Gotta look at what is actually happening and take that into account…. Certainly free money is causing this pump. Funny money out of China and instant digicash from our banks. Money printing causes inflation plain and simple. It just doesn’t reflect in the CPI because they can just substitute to keep it where they want. Anyway, anecdote time. The frenzy in Van is rippling to the rental market. Friends got renovicted from their place of 12 years. Now have to live way out of town in a smaller place for $900 more a month….

  30. Glad to see over a year later that you’re still sticking to your guns.

    Hawk
    May 30, 2015 at 7:12 pm
    I look at the risk levels based on global macro events potential which can smoke the credit market overnight. To me, those are serious worries wether to gamble on owning a house at this particular time of the cycle.

    I agree with Ash, you have to give Hawk at least a ‘C’ for committment to his staunch views.

  31. Vicinvestor1983,

    Apologies, thought you were the other Vicinvestor. Yes one is Nottingham, the other is Dewdney.

    I expect this Scotia news to be one of the major catalysts that starts the next credit crisis popping the Canadian bubble. If one is doing it they all are, or soon will be. As Klump of CREA stated yesterday “the peak has passed”.

    Just like Nortel at $200 there will still be drunks at the bar in expensive suits and cars laughing away as they keep loading up in the “new world”. Someone has to be the bag holder, might as well be those who deserve it.

  32. Massive traffic jam in Oak Bay today. Four cars showed up at Foul Bay and McNeil at the same time.

    “You go”
    “No, you go”
    “You go”
    “No, you go”….

    Traffic was backed up for miles…. 😉

  33. Teakwood was HAM. Good luck to any local buyers trying to compete with that!

    @Vicbot: thanks. That’s a hell of a house & wayyyy beyond my price range lol.

    @Hawk: definitely interesting Soctia has made that decision. Vancovuer R/E is very risky at this point for sure. I’ve been pleading with family to unload some of their homes (they have 3 detached & 3 condos!), but greed has blinded them. They sold a house last year at a decent profit, only to watch it soar another $250K. So they want to recoup the $$$ they left on the table.

  34. JJ, I find gloaters annoying and distasteful too, but Oak Bay isn’t a special enclave for them – you find them in every neighbourhood. You also find wealthy people in every neighbourhood – a few like to flaunt, but many don’t.

    All this talk about an old British-style class system might have existed in Victoria/Oak Bay a long time ago, but that went out after 90s, when entrepreneurs made millions from Internet/software companies – it’s not just old money anymore. Seriously, they don’t give a crap about the money you have, as long as you’re a decent human being.

    (and no, this isn’t coming from a person who lives in a neighbourhood with toilets on the lawns – LOL! frankly that doesn’t happen much anywhere in Victoria does it?).

    By the way, VicInvestor, one of the new builds that’s sitting on the market a long time in OB/Uplands is 2510 Nottingham.

  35. I know a guy in his late 80’s who was selling recently. He was moving to a rental condo, with the expectation he’d be in assisted living within a few years. He told me his home would go for over asking, but also that he would sell for a lower amount to a nice family. This person worked in social services previously & mentioned he understands how it can be tough for families. So people like this are indeed out there.

    I always wondered if he stuck to his plan! I realized other family members/kids might want to encourage the higher number, but could also likely understand the good feeling that selling your home to a nice family provides, especially for a seller who feels life has been good to them.

  36. Money is the only socially acceptable and politically correct way of separating us from them.

    And if you don’t believe me, then you are not paying attention to most of the posters on this blog that gloat over where they live, how much their home is worth and how everyone wants to live where they live.

    Even a comical jab at Oak Bay can bring out the knives. To be fair there are poorer areas of Oak Bay too. Where some of the people park junk cars and leave toilets as freeware on their lawns.

    I remember siting in a downtown bar that had East Indian waiters in redcoats and a large tiger displayed on the wall drinking a glass of Scotch that cost 20 bucks and wearing a $3,000 suit and thinking – I made it! I didn’t realize that one day I would outgrow that feeling…

    … and the suit.

  37. @Vic&Van “Is that still the case even today?”

    Personally that hasn’t been my recent experience in OB – things have probably gotten more casual. The people in my neighbourhood are just plain respectful and look out for each other. We talk about gardening unusual veggies/fruits and sharing equipment rentals. I’m a “professional” and I don’t judge people by their occupation – just by the way they treat others. My relatives have a variety of occupations, professional or trades.

    In answer to question about home prices in the hood, they’ve gone up at least $200-$300k in the last year (the houses I’m following), in some cases more. Our neighbours have the same reaction – OMG how is anyone going to afford to live here.

  38. JustJack – “Yes you can be a plumber or a roofer, have a high six figure income and live in Uplands. It’s just that your neighbors won’t talk to you and your kids won’t have many play dates in the neighborhood”.

    Is that still the case even today?

    Back in the day when I lived in Victoria (like the 1980’s) that was certainly the case based on my interactions with the folks I knew who lived in the Uplands. Quite a few of these residents seemed to have that “snob” vibe about them. Everything had to be “just so” to fit in there i.e. gardens immaculately trimmed by gardeners, Yacht Club/Union Club membership, Jaguars in the garage, kids at St. Michael’s, Mom and/or Dad working in a prestige professional position (an ordinary GP MD would just barely make the cut) or owning a “respectable” very profitable business or living off an “old money” inheritance.

    However, I’ve heard that things have become a little more “casual” there recently but I’ve been out of the loop for so long now.

    Can anyone confirm what it’s like to live there these days?

    Are there a lot of empty homes purchased by offshore $$$$ there as is happening here in Vancouver?

    Are home prices in that hood going up at a faster or slower rate than the rest of the Victoria market?

  39. Some of the new builds in Oak Bay are a real disappointment. Oak Bay is suppose to be an upscale neighborhood why do they build homes that should be in the Westshore.

    They pay $600,000 or $700,000 for a lot and then build a house that should be in a middle income neighborhood of Langford and ask 1.6 million for it.

    The builders are looking for that one wannabee with more money than brains. And there is no shortage of them.

  40. That’s funny about the new builds in Oak Bay gaining the most value there Mike. I see 2 new builds in the Uplands that can’t sell for 8 months or more. One had to drop it’s price a million and still no takers.

  41. Dev Null, still wouldn’t solve the issue of a potential conflict of interest.

    The listing agent can’t also be the auctioneer. Some provinces do have licensed real estate auctioneers. An unbiased third party that would make sure that the process is above reproach.

  42. Poor Raccoons, do not mess with the Oak Bay richy riches or they will cut your legs off. Whoever is doing that needs to be caught and have the same thing done to them. Just a little rant.

  43. What if there was a rule/law that all bids must be made publicly available after an offer is accepted? This would greatly increase transparency and the information available in the marketplace, without directly altering the current way in which bids are submitted and accepted.

  44. Curiously why did you pick Point Grey? Why not Spuzzum?

    I think many of our Oak Bay readers just said…

    “Where’s Spuzzum”

  45. Silly me, I didn’t realize that the same purchaser was looking to buy in Point Grey and Oak Bay making them substitutes for each other.

    I bet if you ask someone that recently purchased in Point Grey why they didn’t buy in Oak Bay there answer would be….

    Where’s Oak Bay?

  46. It’s not exactly rocket science Jack, you only need look to the Oak Bays (Pt Greys) of Vancouver to see what’s coming. Point Grey for instance go for an average of between 4-5 million, with some in the 20+ million range.

  47. You could do that Dave, but the stock of housing can be quite different in each hood making a comparison difficult.

    Fernwood and Oaklands is mostly comprised of small starter homes that were originally built for the low to middle income blue collar families. These are hoods with a high turn over rate because once you get a better job you move on to Maplewood or Broadmead.

    In contrast Fairfield has mostly homes that were originally built for the upper middle income white collar market they tend to be larger and better quality. Their move up hood would be Oak Bay.

    That hasn’t changed over the half century, only the prices have changed.

    Yes you can be a plumber or a roofer, have a high six figure income and live in Uplands. It’s just that your neighbors won’t talk to you and your kids won’t have many play dates in the neighborhood.

  48. Michael you’re looking at property values with the eyes of a developer. That the property value is made up by inputting the value of the land, add the cost of a new home less any accrued depreciation.

    That’s not what someone looking to buy a home does unless they want a lot to build.

    For someone looking to buy a house to live in for the next 20 years the value of vacant land is of little or no concern because they are not buying vacant land. They are buying both the improvements and the land as a whole package. They are interest in what other similar homes are selling for.

    Besides most of the city have houses on the lots. Only rarely do you run across a vacant building lot in the city. Then the lots are all different zoning, sizes, topography and location. Then you have building costs that can range wildly between contractors, then there is the subjectivity of determining accrued depreciation from all sources. It’s a waste of time trying to calculate all these factors as it ends up being unreliable in the end.

    Don’t get me wrong, it helps if you’re selling a property to tell someone that the reason for homes being expensive is the high cost of land. That lots in this area are worth $600,000 but across the street they’re only worth $500,000. But that’s more to soothe the price sticker shock of an cottage with a list price of 1.2 million. The buyers are looking for a reason to justify the purchase.

  49. Presumably you could to the same thing from the other way around Jack? As in, what does $500k etc. get you in each neighbourhood.

    @Triple A Rated What metric did you use to decide on a budget?

  50. Triple A rated, I do the same thing, except I usually only have 20 minutes to come up with the answer.

    I look at houses on a price per square foot rate too. Both finished area and area that has a potential to be finished.

    Then I can sort the sales and rank them by floor area as long as the data is tight on style, house size, lot size and location.

    As the house size increases the price per square foot rate decreases. You could plot that data and if the home you were looking to purchase was 1,600 square feet you could see where on that curve the value would lay at the X or Y margins. That would give you a reasonable approximation of the property’s worth.

    You could then choose to pay above the curve or below depending on additional personal preferences.

    The tricky part is when you look at individual sales and try to compare them to the home you are looking to purchase. You could use dollar adjustments or percentage adjustments for the differences between the home you want to purchase and the comparable sale, but they take a lot of time to figure out. And these adjustments may not be cumulative or accurate.

    I actually agree with you, in that looking at individual comparable sales using a small judgement sample can be very misleading. One or two outlyers can screw the whole analysis.

  51. That part was not surprising but it was how much value you were losing by (generally) buying in Oak Bay

    Except that the people buying new builds in Oak Bay have been the ones gaining the most. The land in Oak Bay has not surprisingly been outperforming all other areas.

  52. In BC courts we essentially have a two bid process. You submit your first bid along with the other bidders. Those bids are read out in court. Then you and the other bidders get an opportunity to make a second and final bid.

    What you don’t have is the lawyer for the home owner and the judge being the same person. That’s an obvious conflict in interest.

  53. Johnk, thanks for the good news story about the family that got the Wilmot house.

    We visited friends in Vancouver this weekend, and one said there’s just too much greed & too many “investors” trying to make money off people’s basic need for shelter right now. He said it’s strange there’s no cars parking on his street anymore – it honestly destroys neighbourhoods. Nobody gives a crap if or when this bull market will turn bear – they just know it hasn’t been good for the city, and they’re thinking of leaving the Lower Mainland altogether.

    Also congrats TripleArated for your purchase – I wonder if there’s any way to share your detailed data analysis here? It’d be very informative.

  54. @Triple A – Love the analysis. Would be great to have this data by region. Can’t see why it can’t be done. Thanks for the informative post.

  55. Well Dev Null, you will have to tell me what I was wishing for?

    I have also discussed that auctions may backfire on sellers too. Sellers may have gotten more for their property if it had been marketed for longer.

    And as far as I know full disclosure and transparency has never been detrimental to a buyer.

  56. In an English auction you can be bid up by a shill in the crowd and overpay.
    In the housing market the buyers submit what they are willing to pay without precise knowledge of other bids. The asking price is basically the reserve bid, filters out tire-kickers.
    So what’s the problem?
    The seller will choose the bid he wants for his own reasons, it may be the highest but it may not be, too. We have bought two houses, one here one in Toronto, each had a higher bid than ours.

  57. Just Jack et al., be careful what you wish for with regard to auctions.
    The question of who is favored by blind auctions is an interesting one. It is not at all obvious that they favor sellers. In fact, as a buyer in the current market, the thought of a standard open ascending price (English) auction sends shivers down my spine. I think you are grossly mistaken if you think the winning bid would be lower for some of the more desirable homes in the current market with an English auction instead of a blind auction.

    For one thing, the assumption that buyers offer their “max bid” in a blind auction is faulty. An alternative is that a buyer offers a bid that they think will be $1 above the other bids. Of course, they may be wrong, but in a blind auction that is the end of the story. On the other hand, in an English auction, there is a strong temptation to keep bidding just a bit more, because who wants to lose out because of that last dollar?

    There is a reason that art auctions, surplus auctions, etc… are run as English auctions, and it’s not because they are better for buyers!

    Additional reasonable discussion of various types of auctions is available here:
    http://money.stackexchange.com/questions/60478/real-estate-blind-auction-who-benefits

  58. More fun with my dad’s sale in Richmond. He has possession until the end of July. Yesterday, tree removers showed up ready to take down the trees. They had my deaf 95 year old father surrounded saying they had the authority. Luckily my brother showed up and sent them packing. Bro also found out that trees greater than 6″ thick need a permit which they didn’t have. All fun, all the time.

    The more I that happens with this sale the more I am convinced that we have some rookie speculators trying to cash in and getting antsy.

  59. 1598 Wilmot sold to 2nd highest bidder who had submitted a personal letter and family photo. Sellers wanted a family not a speculator. The family is from Victoria.

  60. We finally purchased a home after diligently looking since October of last year.

    Since the market had been running wild even before then we knew it was time just to relax and better understand how long the houses would stay on the market after they were listed. We took the time to shake our ideas of what we thought were good ‘pockets’ and took numerous drives outside of our comfort areas and expanded our focused areas.

    We also changed our approach to an appraisal of comparable value before even looking at open houses. I’d been tracking key areas and breaking the data down per area so that after every house sold I had a clear picture as an average what to expect each new house would:
    (a) Sell $ over assess
    (b) Sell $ over list
    (c) Sell $ per sq foot both finish and unfinished
    (d) Sell $ per sq foot of the lot
    (e) Apply a Walk Score differential $ bias

    The top value homes were no surprise in Prospect Lake, and the worst were new Builds in Oak Bay. That part was not surprising but it was how much value you were losing by (generally) buying in Oak Bay that you were losing. Again, numbers just presented themselves so Zero emotional factor. What I was impressed with was a number of homes in the core that were just shy of our needs that were fantastic value that would sit on the market for weeks and then sell for less than $100k over assess. Clearly others out there are doing the same thing or have a Realtor doing this for them or just Coincidence.

    Marko had a previous post regarding how I believe that his father (sorry, details hazy) would sell homes by providing details on structure such as 2x__ construction, plywood, etc. He mentioned how he had tried that route but in the end the buyers didn’t really care, that their questions would be be, well, naive for lack of a better term. Marko probably would have been a good choice for us if we knew that someone out there would go the extra mile to give us full disclosure on the construction details.

    I read a great article in the Globe where a financial planner explained that a home purchase should be 80% numbers driven and only 20% emotional, and I completely agree. Since October we set a budget, kept to it, and knew exactly how much remained, and saved a significant amount of money.

    Once we started actually looking at homes, I found the metrics I came up with were accurate and actually started looking at very few open houses, only the ones that I had filtered as being outstanding value for either the house or the lot. We are not investors in the sense that we were not looking to acquire a rental property however I took this very seriously and approached the financials as such. Perhaps most don’t care or are not interested in taking their home purchase to such a degree but for us it’s just the way we personally approach every purchase, so quite frankly we couldn’t help ourselves.

    Thanks and best regards to Admin, Marko, Leo, Just Jack and Totoro for keeping things relevant and very informative.

  61. Admin, your title says March 30 when I think you mean May 30.
    [thanks, fixed - admin]

  62. @Marko

    You’ve got me curious… How do you manage your real estate business when on vacation? Do you reduce listings prior to going away, or do you subcontract sales during your absence? I’ve often thought that it must be difficult for an agent to take vacations…

  63. If I had a family home that I bought for $20K in 1966, I would take, for example, $750K vs $770K, to have it go to a family vs. an investor. I would have to be sure I was not getting scammed, though, because I have heard of people in Vancouver who sold to the person who promised not to tear down the house, and then the house came down.

    In fact, maybe those people who have made hundreds of thousands of dollars from real estate over the years should start a charity for people struggling to get into the real estate market today. That way those most in need could be selected fairly. I am serious. Either that or taxes but something has got to change to make things more equitable.

    I thought your comment was sarcasm initially but I think you are serious…problem is that the individual selling the 750/770k home either needs to move up, down, or laterally in the same market or is moving into assisted living ($$) and who knows how long they will live. “They’ve made hundreds of thousands” is a really bad argument. The person buying will also make millions if they hold it for 30-50 years so why don’t they just pay 20k more? It would be the equivalent of the seller having to pay $20,000 + a few hundred bucks in 1966.

    Start a charity for someone “struggling” to get into a 750k home? Isn’t there literally a million better causes resources can be allocated to such as those struggling with chronic illness and a host of other issues.

    I can tell you from a lot of experience my clients losing out on offers on 750k homes aren’t exactly struggling. Long weekends are always slower for me as most of my 750k clients are in Whistler and other fun place. Despite the insane appreciation in the real estate market I’ve only had one person made a serious sacrifice this year; a couple I sold a place to is moving into the basement suite for 2-3 years to make things work. Rest are living life to a very high standard. Makes sense as those looking at 750k homes are pulling in 150k+ family income.

    In Europe right now. Checked out my cousins condo that he has for sale for $375,000 Euros (should sell around $350ish). He is renting it for $400 per month, average salary in country $500 per month, interest rates around 10% and somehow real estate hasn’t collapsed. Difficult to comprehend.

    After today I’ll be offline for 5-6 days due to remoteness 🙂 Until next week.

  64. “Maybe if the difference was two or three thousand… But any more than that and I’ll take the money instead.”

    If I had a family home that I bought for $20K in 1966, I would take, for example, $750K vs $770K, to have it go to a family vs. an investor. I would have to be sure I was not getting scammed, though, because I have heard of people in Vancouver who sold to the person who promised not to tear down the house, and then the house came down.

    In fact, maybe those people who have made hundreds of thousands of dollars from real estate over the years should start a charity for people struggling to get into the real estate market today. That way those most in need could be selected fairly. I am serious. Either that or taxes but something has got to change to make things more equitable.

  65. The personal letter only works if you are unconditional and the highest bid. If there is an investor with a 5k higher unconditional offer good luck with your letter.

    Yeah we were talking about this at dinner today… Would we consider a personal letter if selling? Maybe if the difference was two or three thousand… But any more than that and I’ll take the money instead.

  66. The personal letter only works if you are unconditional and the highest bid. If there is an investor with a 5k higher unconditional offer good luck with your letter.

    I’ve submitted over 20 letters with offers since the New Year, hasn’t worked once and a number of times my clients have lost out by thousands to a Vancouver buyer.

    Today had to be the craziest sales reporting day in the history of the VREB….the amount of sales coming in at 100k to 400k over asking is just insane. Ocean View at 366k over ask.

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