August 22 Market Update

Weekly stats update courtesy of the VREB via Marko Juras.

August 2016
Aug
 2015
Wk 1 Wk 2 Wk 3 Wk 4
Unconditional Sales 188  396 599
741
New Listings 265 571 811
952
Active Listings 2133 2174 2139
3688
Sales to New Listings  71% 69% 74%
78%
Sales Projection 896 889
Months of Inventory

4.98

The bump in inventory last week seems to have been temporary.

Dasmo says “this market IS mostly about home owners not selling. It seems the crazy low inventory has less to do with insane sales numbers than low listings…. The recent price gains would feel more solid if the low inventory was because of huge sales numbers but it’s not.”

However can’t really say the data agrees.   Sales are at record highs and that’s the main reason we’re in this market.   New listings are middle of the road.  Below recent years but above the levels of earlier in the 2000s and late 1990s.

newlistings

Last time it took a good 5 years of hot market for the new listings really to pick up.  Sooo…  Maybe 2020?

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320 thoughts on “August 22 Market Update

  1. Infill is always super tricky and fraught with issues, as inner city lots only have so much room to give and in many cases are already highly non-conforming in their present use. A standard 40×120 ft lot is already pretty tight, and to build something on that same lot at a significantly higher density is going to be problematic.

    Easing the requirements for suites is an interesting one. On the one hand, my lot (in Victoria) has the potential for a plus-sized garden suite as I’m on the corner. Currently they require me to go through a rezoning for a garden suite (even as a public hearing could be waived as it conforms with the OCP) and provide building plans as part of that rezoning. Requiring building plans with a rezoning is conditional rezoning and is illegal. So they could fix that right now – as I understand they might be.

    On the other hand – garden suites do little for real increases in density. They are a non-titled unit in your yard that costs ~$100k or whatever to build and only provides one additional unit on the lot. It effectively sterilizes the lot for redevelopment to a denser use such as row housing. So you have some sad lonely medical resident living in a mini shack in your (now smaller) backyard that you’re probably going to be cash neutral on for a while, and that you can’t sell separately. Hell, if I’m looking for a rental unit I would be better off to buy one in an apartment building and keep my backyard. Garden suites don’t make a ton of sense for anyone, and I think this is why you haven’t seen many of them built.

  2. Yes I agree.

    I just don’t see how the parking issue can be solved as I don’t foresee lifting this requirement for legal duplexing even though there are illegal suites causing parking problems already – as you stated illegal suites can be shut down but duplexes once legalized cannot.

    Existing residents vote in the Council and they are not going to want to see parking problems legalized. I think most of the other issues are more easily addressed. So off to Langford you go for new build duplexes with appropriate parking.

    FWIW there have been a number of duplex conversions in Victoria with the old homes but they

  3. Sounds right ugly for Vancouver numbers.

    Steve Saretsky ‏@SteveSaretsky 4h 4 hours ago
    Preliminary findings for August detached. It’s bad, like real bad.

  4. ..and in case I haven’t bored you enough, if it wasn’t clear: to get back to the original point, zoning is the hammer. Perhaps you can guess my profession. Once something is permitted by zoning, a property can legally have a suite as long as it meets that zoning and meets code. Meeting zoning and meeting code does not require a public process or public input of any sort, and nobody gets further comment. An illegal suite can be converted to a legal suite if the zoning permits it. This is what the CAs are concerned about.

  5. @totoro – I’ll give you an example. I know a person with an illegal suite in a duplex in Fairfield (both sides have a suite). It’s code compliant but doesn’t meet zoning. It’s this way because she wants it to be safe, even as the suite is not currently permitted in the zone. Oak Bay is a good example of a place that has a lot of suites which are not permitted by zoning, and opposed by many.

  6. @totoro – I was speaking in general terms and not necessarily referring to code-related issues. Suites can be illegal based on code or based on zoning, or both. I could get into specific conditional zoning issues around suites like parking, floor area regulations, garden suite regulations etc that would indeed be zoning related (but not necessarily Victoria related) but that’s splitting hairs. My point is that illegal situations exist and a municipality can choose to enforce selectively, or based on complaint. It works.

  7. If you legitimize the reality by rezoning, it removes the ability to enforce on illegal behaviour if necessary or after complaints.

    No. Illegal suites are still illegal even if the zoning permits them. The difference between legal and illegal relates to meeting building code standards as well. I’d agree that it does open up conversions and a lot of folks would be willing to upgrade an illegal suite to a duplex unit if they could then sell one half or both halves. It would be a gold mine for existing owners.

    However, off-site parking requirements would not permit legal duplex homes on many lots in this area.

  8. @Dasmo – I’d say if you’re talking about Cook St area west of the cemetery, yes there’s a lot of conversions. East of there and within Gonzales/Rockland, not as much.

    Nevertheless, the name of the game in local politics is perception. Perception of change in demographics, lifestyle, property values, congestion, parking…the list goes on. If you legitimize the reality by rezoning, it removes the ability to enforce on illegal behaviour if necessary or after complaints. The Community Associations know this all too well.

  9. @JD I know. No one will fight for that. It means a loss of control, loss of lift tax revenue, political turmoil etc. But Faifield in particular is the poster child for this behaviour. It is almost all duplexes and multi-family. Either by illegal and legal basement suites (which are up down duplexes except for ownership), and large house condo conversions. All those Abstract condo conversions are not even indicated as multi family in the zoning map for the city yet there they are… Heck, I lived in an illegal suite in Fairfiled for many years. It hasn’t been SFD for decades already. This is also evident by the shear number of cars on the street….

  10. “All of Fairfield should be zoned for duplex and triplex at least.”

    Who’s going to fight this fight though? Much like many other community associations in established inner-city communities across Canada, the Fairfield Community Association is a protectionist mafia, and they have cheerleaders on Council. Pam Madoff and Ben Isitt want to go the other way – they want public hearings for demo permits. Victoria’s OCP basically blanket-protects these neighbourhoods as ‘traditional residential’. Any such blanket rezoning talk will get pummeled and the current Council is not ready or willing to take that on. Their current idea of progressive governance is painting bike lanes on roads.

  11. As I have said many times, the zoning in this town is a sham. It’s all spot zoned. Unless they did a wholesale rezoning duplexes will do nothing for affordability. They will only affect profitability….
    They need to have the one big fight and rezone the region. The area around the Hudson should have it’s height cap lifted. All of Fairfield should be zoned for duplex and triplex at least. (There is maybe 10% of the homes that are not multi suite anyway). Vic West should just all go multi family. It’s not like any of the small lot subdivisions in Fairfield were affordable unless you are part of the one million is cheap club….

  12. Great news Bizznitch and Bitterbear. If you own BC property and/or set your kid up in a BC school you are now given the boot. Long overdue.

  13. If you look at Capital Heights, Mt Stephen, & Empire Sts there are a lot of duplex zoned properties, but definitely the City needs to get its act together if it’s not budging on the variances – too bad. There would probably be more support for it.

  14. Hillside & Oaklands areas seem to have a lot of that type of zoning, Fairfield has some, and I can imagine Fernwood, North Park, Burnside, Vic West as well.

    http://vicmap.victoria.ca, don’t see much in terms of R2. Then when you do see a R2 it still doesn’t mean you can build a duplex. If the lot is zoned R2 but smaller than 555 m2 you are still out of luck.

    I looked at a teardown/lot on Cedar Hill Road a few years ago that was R2 and 551 m2 (only 4 m2 short) and city would not budge and I was told city would not support a variance either to build a duplex.

  15. “Where are these lots in Victoria that are duplex and triplex zoned?”

    Hillside & Oaklands areas seem to have a lot of that type of zoning, Fairfield has some, and I can imagine Fernwood, North Park, Burnside, Vic West as well.

  16. I’m totally serious. Couldn’t believe my ears. I’ll try to find the clip. It was on the 6 pm news, maybe CBC Vancouver. they talked about needing to stop the trampoline effect.

  17. So please don’t use an argument with me that Victoria is anti-density. It’s just that developers aren’t motivated to build affordable duplexes or triplexes because they can’t make the same money. It’s a vicious cycle – the more condos are built, the more pricey houses & land get (assessments are relative), the harder it is to justify a duplex or triplex, or even just a simpler home on Asquith.

    Where are these lots in Victoria that are duplex and triplex zoned?

  18. Careful LeoM. There are rational women on this blog and you might not know who they are.

    Your assumptions could say more about you than you want them to.

  19. “45 to 55 year old white women dragging their man around, talking furiously”

    I don’t know what OH you’ve been to, but I’ve never seen anyone “talking furiously”. Sounds like a housewife stereotype from 1952. At all the OHs I went to, I saw a variety of people – a mix of locals & people from out of town – some from Vancouver, some families speaking Chinese with several generations represented (mom, dad, grandparents, young kids with sports cars – seemed like they were moving for university). In Vancouver I used to hear a wider variety of languages though.

  20. Just announced on the news tonight. Quebec is tightening its Immigrant Investor program rules. If an immigrant investor has property in BC or a child studying in BC, they are no longer accepted for the program. Quick, the horse has bolted, close the barn door!

  21. JustJack said:
    “My guess is that the early spring market was more to do with Alberta workers that lived here and worked in Alberta…”

    I don’t think so Jack. I attended dozens of open houses this spring and the dominant demographic I noticed at almost every open house was NOT Chinese folks or young Alberta dudes, but what I saw at every open house was many 45 to 55 year old white women dragging their man around, talking furiously trying to convince their man that they need to be quick if they want to add this house to their collection. House hoarders were evident at every open house, and many of them seemed to be from out-of-town, judging by the number of rental cars from National Car Rentals.

  22. Good points Vicbot. Developers like Abstract won’t build anything unless it’s for a million. Affordable housing will only happen once the market tanks. UBS is calling today for the end of the credit cycle.

  23. I’m starting to think that Michael has mentioned a market correction more times than all the bears collectively.

    Well, a quick Ctrl-F on this post counts 16 uses of ‘correction’…1 by me & 6 by you Jack. Just imagine how many ‘crash’es you’ve racked up over the past 10 years 🙂

  24. No worries Mike, your bank stocks are intact for now because they are cutting back mortgage lending even more than previous.

    It’s Home Capital and CMHC you look for the first signs. Since Home has dropped 30% from $39 to $29 since May, I’d say the alarm bells are ringing in their back offices looking for the boxes of cash to cover upcoming losses.

    Too funny how Scotia says they’re “not concerned” yet they are battening down the hatches.

    “The Bank of Nova Scotia reported better than expected earnings Tuesday and said it is actively pulling back in domestic mortgage lending as worrying signs have emerged in the Vancouver and Toronto housing markets.”

    “We have been taking progressive action across a number of (mortgage) portfolios,” said James O’Sullivan, executive vice president of Canadian banking. “We’re tightening exceptions, tightening organizations and reducing pre-approvals.”

    http://business.financialpost.com/news/fp-street/bank-of-nova-scotia-hikes-dividend-as-third-quarter-profit-rises-to-1-9-billion-credit-losses-decline

  25. Asquith is a strange one – priced on Aug 10 at $1,099,888 on YouTube (it’s obvious who they’re targeting with the 888) https://www.youtube.com/watch?v=-3gDCXA_Ixs

    Then posted to MLS on Aug 24 at $828k, then Pend Date Aug 29 for for $1,168,000.
    So did it sell for 6% over ask or 41% over ask?

    Strange for the hood, but then again, people from out of town don’t always differentiate.

    The New Yorker had a good article in 2014 about what drives Vancouver’s prices – it ain’t because it’s a business centre:
    http://www.newyorker.com/magazine/2014/05/26/real-estate-goes-global

    “Vancouver isn’t an obvious superstar. It’s not home to a major industry—as New York and London are to finance, or San Francisco to tech—and it doesn’t have the cultural cachet of Paris or Milan. Instead, Vancouver’s appeal consists of comfort and security, making it what Andy Yan calls a ‘hedge city.’ … ‘We’re one of the places where people seem to want to park their cash, and there aren’t that many of those places,’ Yan says. ‘So let’s raise the parking fees.’

    I’m already a homeowner, but I’m concerned about runaway debt and local affordability – as mentioned in the RBC report that Hawk posted.

    Asquith is another sign of developers & investors so motivated by making $$ from shoebox condos or “luxury houses” in unexpected hoods that your middle-income-earners are left behind – and those are the people that drive the local economy.

    So please don’t use an argument with me that Victoria is anti-density. It’s just that developers aren’t motivated to build affordable duplexes or triplexes because they can’t make the same money. It’s a vicious cycle – the more condos are built, the more pricey houses & land get (assessments are relative), the harder it is to justify a duplex or triplex, or even just a simpler home on Asquith.

  26. @Rook – I believe the provincial government now collects this data. If nothing has been released, you could try putting in an FOI request to the Ministry of Finance. Don’t hold your breath though if you do.

  27. Again, it’s the bull Michael that brings up a market correction. I’m starting to think that Michael has mentioned a market correction more times than all the bears collectively.

  28. I’m wondering if there is a reliable way to track how many homes are selling to foreign investors in Victoria. It would be prudent for our local government to help curb an influx that would further drive up our market into unsustainable territory.
    Is there a way of obtaining these numbers?

  29. More outsiders seeing it for what it is.

    Canada’s housing market nears ‘extreme bubble,’ warns ex-Lehman Brothers trader

    “The Canadian real estate market is on the verge of a massive bubble, warns a former Lehman Brothers executive, citing a struggling Canadian economy and high debt to income ratios.”

    http://globalnews.ca/news/2909453/canadas-housing-market-nears-extreme-bubble-warns-ex-lehman-brothers-trader/?utm_source=Article&utm_medium=MostPopular&utm_campaign=2014

  30. I think that’s fair as long as he posts the link.

    Obviously Hawk can’t reprint the entire report and most of us understand that he is stating his opinion. And to be fair that was the author of the report’s opinion as to what might be the future. Hawk just stayed with the data and omitted someone else’s opinion.

    Anyone who is bullish on real estate should be ecstatic about August’s numbers. The positive news for both is the trend to more selection and stable prices. As a seller you are most likely to get the same price in the next few months as today which is pretty damn good. As a buyer you’re likely to pay the same prices as today but have more houses to select from in the near future.

    So why are some of the bulls so angry still?

  31. Nothing disingenuous about it, everyone will read the link, it’s no secret. It’s not relevant until proven to be a reality. So far the foreigner buying has never been a serious factor here through the hottest market in years despite some of the local agents selling themselves out and coming up dry for the most part.

    What’s disingenuous is RBC and CMHC reporting for months now that everything is dirt cheap here while prices went through the roof. RBC is cheerleading the foreigner “hope” on a wing and a prayer, not stating proven numbers of foreigners actually coming here.

  32. Hawk – my point is that you were cherry picking the parts of the article that suited your argument. Nothing unusual in that, but I wanted to point out to everyone else that you were being a little disingenuous in your reporting.

  33. The number one reason I hear that foreign investors will not flock to Victoria is that there is no direct flight from Victoria to China. Ironic that it is easier to fly direct to Toronto than travel to Victoria.

  34. Foreigner inflow is totally hypothetical AG, I only post the facts not the hype like the perma-bulls. Foreigners are a crap shoot not the current reality. House sales are in decline since March, get over it.

    A few percentage points below historical highs is not “significantly better”. RBC says what’s “significantly”. Did you not read it ?

    “This level exceeded the long-term average of 43.8% quite significantly, which suggests to us the presence of greater than usual affordability stress. This stress may have been a factor behind
    a decline in home resales at the end of spring 2016—they fell by more than 10% between April and June—potentially a sign that this market has topped out. “

  35. Hawk you’re funny. You intentionally left out the last sentence from that RBC report on Victoria –

    “On the other hand, part or all of this decline could be reversed in the coming months if the new tax on foreign buyers in Metro Vancouver results in increased foreign investor interest in the Victoria market.”

    You also forgot to mention their chart, which shows Victoria affordability as being significantly better than the previous peaks in 2007 and 2010.

    At least try to cover your tracks a little better 🙂

  36. $1.2 mm is a ridiculous amount of money. Even at a $200k per year salary, $200k less taxes = $135k. Less living expenses @ 5k per month for a family of 4 leaves $75k. Minimum recommended Investing at 10% = $20k, leaving $55k/year. 1.2mm /55k= 22 years. 22 years of diligence for one person in the top 2% of earners or two people in the top 14%. That price is hard to afford for high earners, and I doubt most of you earn that high.

    I don’t know how big a problem it is when people stop golfing (two courses out of business this year) and tipping because the 15% is too high and then blow almost 400k over ask because 1.2mm “isn’t a lot of money” but we are there. Maybe it’s all the dispensaries fogging up the crowd.

    monthly payments!!! wealth!!! Low interest rates!!! Prices only go up!!! Maybe, but that is a third rate Victoria neighbourhood and no matter how you slice it, very few people can afford that price and feel like they are getting their incomes worth. Vancouver is worse, doesn’t make it right.

    http://www.financialpost.com/m/wp/personal-finance/managing-wealth/blog.html?b=business.financialpost.com/personal-finance/managing-wealth/how-does-your-salary-stack-up-to-the-rest-of-the-country-a-look-at-what-canadians-make

  37. My guess is that the early spring market was more to do with Alberta workers that lived here and worked in Alberta being laid off and deciding to buy rental properties or rent and spend their EI cheque this summer in Victoria. That wave of itinerant workers has run its course and we are returning to the lower sales levels of years before. And i say this only because the events of lay offs in Alberta and vacancy and house sales in Victoria seemed to coincide.

    I would expect sales activity to continue to slide lower and inventory to climb this September. We are still deeply into a market favoring sellers so I don’t expect a significant decline in the median price but I certainly would welcome the end of “delayed offers” that pump and distort the market. At this time my thought is the “delayed offer” may be the most likely source to a future destabilization in the marketplace.

    I understand that if you’re a prospective purchaser you feel that you have to play the game of a shortened exposure time to entice multiple bids especially when the property is under priced. Because there is always the hope that you will be the winning bidder and maybe get a deal. But that’s what the other nine bidders are hoping to do also. Your best option is to go in with your best bid and never counter.

    That’s what I do at the auctions. I leave an absentee bid and walk away. The next day I’ll know if I won or not. No grief, no worries, no anxiety.

  38. It’s official as per RBC, Victoria has topped out. Not that we didn’t know. 😉

    Victoria – Topping out?

    Victoria is the other market in British Columbia outside Vancouver that experienced
    a substantial housing rally and solid price gains in the past year. The
    drawback of course has been that local housing affordability eroded after
    reaching a nine-year best at the start of 2015. In the second quarter of 2016,
    RBC’s aggregate measure for the area rose, by a sizable 1.6 percentage points
    to 51.4%, for the fifth consecutive time. This level exceeded the long-term
    average of 43.8% quite significantly, which suggests to us the presence of
    greater than usual affordability stress. This stress may have been a factor behind
    a decline in home resales at the end of spring 2016—they fell by more
    than 10% between April and June—potentially a sign that this market has
    topped out.

    http://www.rbc.com/economics/economic-reports/pdf/canadian-housing/house-aug2016.pdf

  39. I’m sorry but 1.2 million is a crap load of money…. Just wait until it costs 4.5% to carry it…. This is what I mean about psychology driving things.

  40. “It is the condominium sales in August that made the difference.”

    The greater fools have shifted to condos, interesting. Are the banks tightening up the lending forcing spec buyers to choose condos over houses, or are there less people moving here all of sudden with sales down big from several months ago ?

  41. “Peaked early with record breaking sales and went downhill to record breaking sales due to seasonality.”

    Record breaking for seasonality, but not for sales dollar totals. If it was truly “red hot” it would still be in the spring number ranges of 12oo and prices still rising substantially. Seasonality is just an excuse for a cooling market AKA distribution.

    Rockland would not be going into default on the mortgage in a truly red hot market in a prime area of Victoria wether you want to cut down the property set up or not.

    When Asquith sells for those idiotic numbers in an area with no storm sewers and Rockland doesn’t, the market is not red hot, it’s bi-polar where bad decisions are made and major money is lost.

  42. Ash is right, the house sales in the core are not much different that many of the August months before. It is the condominium sales in August that made the difference.

    Sales, Number of August Only
    Month 2007 2008 2009 2010 2011
    Aug 810 523 745 406 535
    Sales, Number of
    Month 2012 2013 2014 2015 2016
    Aug 469 542 588 718 770

    House sales only in the core for August
    Sales, Number of
    Month 2007 2008 2009 2010 2011
    Aug 217 134 201 110 164
    Sales, Number of
    Month 2012 2013 2014 2015 2016
    Aug 118 151 171 184 187

    Sales, Number of Condos only in the core
    Month 2007 2008 2009 2010 2011
    Aug 193 137 176 91 98
    Sales, Number of
    Month 2012 2013 2014 2015 2016
    Aug 110 92 129 140 188

    A lot of things can happen in the economy when you plot data at 12 months intervals. If you want to see the market trends you have to watch the flow of sales month by month without 12 month gaps in between.

  43. “Rockland house that failed at auctioned has been relisted for 1.87 by bmo. Mortgage in default.”

    Will CHEK TV will be there live to cover the foreclosure hearing ? 😉

  44. The pictures presented very well, it’s a newer home, and that area of town has become desireable over the last few years. That being said its a lot of money, more than I would have expected it to have sold for.

    A similar home in a similar area in a comparible in Vancouver would have sold for $3M. A realize the theme in this thread is a down market there but $1.2M is not that much money anymore. There’s just an insane amount of money in the system now. Victoria is still undervalued overall but this house to some may challenge this notion.

  45. Damn condo sales seem strong right now. I’m guessing this record-breaking August owes a lot to condos rather than houses.

  46. Wasn’t Asquith listed a couple months ago and didn’t sell? Now it goes for way over ask? Weird.

    Looks like an awesome house, but I also question the value of it in the long term – 1.2M is a bit ridiculous given it’s only 3 doors in from Bay street.

  47. “2517 Asquith St listed for $828,000 and sold for $1,168,000. Purchased for $830,000 1.5 yrs ago.”

    Several years ago, I would have told the person who built a high-end house on a 4200 sq.ft. lot in a low-end area they were crazy. “Who’s gonna pay $800K for a house there?”, I would have said. I would have said the purchaser was crazy, too. Times change. I do wonder what happens as the house ages, since I still don’t see that as a highly desirable lot.

  48. Hawk: Without graphing the median numbers, it’s quite obvious that this year is much different than 2015. We peaked early and went downhill from there. Of course the RE agents (they know who they are) will use any excuse they can to pump the numbers.

    Peaked early with record breaking sales and went downhill to record breaking sales due to seasonality.

  49. Hawk: Without graphing the median numbers, it’s quite obvious that this year is much different than 2016. We peaked early and went downhill from there. Of course the RE agents (they know who they are) will use any excuse they can to pump the numbers.

  50. If the median price flat lines or drops then Mike’s giddiness is all for naught. As per Jacks numbers it looks like there will be a lot of disappointment to set records and lose money or make nothing. Another sign of a market running out of steam.

    Seasonality is never an excuse for a truly red hot market.

  51. Leo has the stats, he can post them? Sales to list could also be the highest of all time as well.

    2007 had the strongest sales August ever but had a decent new listing count. I don’t have time to examine all the other years.

    Everyone is referencing what is happening currently to a record setting spring while we are having a record setting summer. It is not that long ago in 2012 that we only had 462 sales for August. 2010 was even worse at 425 sales.

  52. Marko, are you able to send sales per month per year for the history of the VREB? then, I can tell if it is actually significantly higher or within the expected range of variation.

  53. I dont pretend to be a real estate expert but Victoria seems to be composed of two very different types of purchasers: retiree’s and people employed in Victoria. Some areas like Oak Bay seem dominated by retiree’s.

    How much of the price increases are dominated by baby boomers retiring? Has anyone seriously looked at the demographics in terms of future house prices here in Victoria?

    Turning to another topic on this thread, if you are worried about earthquakes and tsunamis you should probably buy in Rockland near the Gov’s Mansion; solid granite and about 180 feet about sea level.

  54. but August will still have the lowest number of sales in the last six months.

    Marko was obviously referring to this month being a record-breaking August…which would signify strength following that tax introduction.
    And yes Jack we’re all aware that most Augusts have lower sales than the previous six months in every city on the continent (it’s called seasonality/summer holidays), but thanks for pointing it out to us every year 🙂

  55. “I suspect that the difficulty Vancouverites are having in selling their homes may be causing fewer sales here.”

    All you have to do is look at Westside Vancouver and Richmond on the MLS. Looks like panic city with hundreds of listings all asking $2 million up. The Great Vancouver Buyer Boat just got sunk like the Titanic. I thought they ran out of land? 😉

  56. “August is a complete bloodbath for Oak Bay though. Sales have declined by more than 3 over last year at this time.”

    “Aug 12

    Last August Oak Bay had 22 house sales.”

    Why are we surprised Bearkilla can’t subtract 12 from 22 ?

  57. here’s a sickening thought.

    Could it be that the slowdown in Vancouver is just a time out while all the foreign buyers find lawyers to set up numbered companies for them?

  58. Here are the month sales since the beginning of the year. We might break the number of sales in February but August will still have the lowest number of sales in the last six months.

    Month Sales, Number of
    Jan 522
    Feb 768
    Mar 1106
    Apr 1238
    May 1295
    Jun 1162
    Jul 950
    Aug 752 so far this month

    Yeh, Oak Bay house sales got hit hard like West Vancouver did. So far none of the 12 house sales in Oak Bay were to Vancouverites. Sales are back to what they were in the middle of winter.

    Month Sales, Number of
    Jan 13
    Feb 26
    Mar 34
    Apr 55
    May 39
    Jun 26
    Jul 17
    Aug 12

    Last August Oak Bay had 22 house sales.

  59. August is a complete bloodbath for Oak Bay though. Sales have declined by more than 3 over last year at this time.

  60. August will be another record breaking month.

    How could that be? The bears assured us the market died a month ago 🙂

  61. Maybe the Vancouver tax has had an effect?

    In July we had 86 properties out of a total of 950 sales purchased by someone from Vancouver. So far this month we are down to 44 out of 736 sales.

    A 49% drop in Vancouver buyers versus a 22% drop in total month over month sales.

    I suspect that the difficulty Vancouverites are having in selling their homes may be causing fewer sales here.

  62. And it’s credit tightening that has me worried and paying close attention to what’s going on. I’m almost ready to apply for my construction loan… almost….

    Like in the late – mid 2000’s prices will appear sticky but if you gotta sell you will have to capitulate. Like that 1.5 acre beach front property up island that we didn’t buy. Listed since 2008 for 1.2 million. Sold for $620 in 2010… interest rates were pretty low then too.

  63. “People are buying because people are buying”

    If credit lending tightens then less people can buy. Buyers increased this past year due to Vancouver mania and media hype of FOMO. Alberta workers had limited effect, with construction workers down 5000 from a year ago. The shift the other way is just beginning.

  64. I agree Dasmo. Fundamentals will not cause a crash – bubbles and crashes are driven by irrational group behaviour. A crash in a market might be triggered by a catalyst, but the overreaction that causes the crash is not based on that change in interest rates or new tax or whatever. It’s caused by panic.

    Predictions in this department are futile; in the last two weeks, for instance, some posters here have been unable to distinguish a market correction from a long weekend.

  65. If it was all to do with credit we would not have been dead in 2012… Don’t make me tell my Fairfield story again. It might push Hawk off the deep end.
    I would argue that credit only enables the activity. It’s physiology that drives the market. People are buying because people are buying. It can quickly shift the other way. No one was buying in 2012 and rates were just as low…. Only difference between then and now is no one is leaving for the oil patch and their are pot shops everywhere…

  66. “I think it will actually help sales a bit. Not only did new listings pick up but I am actually seeing a half decent house here and there. New listings on Asquith and Morley are both nice homes and were packed when I went through this weekend.”

    Those are nice. Taxes are high on Morley. 6400 dollars. Victoria I guess is higher than other areas. Was Morley sold in the last couple of years? I saw it on sale for 895k with no furniture in the photos in 1 listing.

  67. “Things in terms of credit aren’t as simple as walking into a bank and walking out with a mortgage.”

    It is if you are a foreign student with daddy’s 35% down, with no income verification where CIBC is lending on campus. That’s high risk lending to a complete stranger to Canada. 35% doesn’t cover a 50% loss.

    http://www.greaterfool.ca/page/3/

  68. Just look at those new listings pick up!

    I think it will actually help sales a bit. Not only did new listings pick up but I am actually seeing a half decent house here and there. New listings on Asquith and Morley are both nice homes and were packed when I went through this weekend.

  69. Wrong again. Easy credit is the largest factor bar none. When that changes, interest rates mean nothing. It’s all about banks/mortgage brokers risk levels to lend.

    But this has been changing for the last 10 years. Wasn’t the CMHC $1 million cap, amongst many other credit restrictions, suppose to tank the Vancouver market?

    Earlier this year Van City along with a few other banks/credit unions started doing 0.65 LTV on rental properties, for example. Things in terms of credit aren’t as simple as walking into a bank and walking out with a mortgage.

  70. “Looks like August will be another record breaking month. It’s already the second best August since 1990 only second to 2007 (846 sales) but with three days left will surpass that.”

    What’s the sales $$ volume totals ? That’s the key.

  71. “This year the topic of interest rates has disappeared from the blog but it is by far the largest factor driving prices.”

    Wrong again. Easy credit is the largest factor bar none. When that changes, interest rates mean nothing. It’s all about banks/mortgage brokers risk levels to lend.

  72. Looks like August will be another record breaking month. It’s already the second best August since 1990 only second to 2007 (846 sales) but with three days left will surpass that.

    Mon Aug 29, 2016:

    Aug Aug
    2016 2015
    Net Unconditional Sales: 784 741
    New Listings: 1,039 952
    Active Listings: 2,127 3,688

  73. Victoria is not as terrible for cash flow as Vancouver, but it is pretty bad.

    Your condo example only works because you bought long enough ago and, even then, I’m not sure that you are actually cash flow positive accounting for all expenses and income tax on the profits which include the equity pay down portion of the mortgage.

    In terms of condos I had a listing in a newer concrete downtown building that just sold for $262,500. Currently rents for $1,100 per month and could be re-rented for $1,200 to $1,250. You can almost make that work.

    As far as houses I’ll give you an example of a house I just went through yesterday and it also sold unconditionally last night. 3140 Service Street went for $740,000 (listed $699k). A few hundred feet to Camosun Lansdowne Campus. Three bedroom suite that could rent easily for $1,500 per month. Maybe you even stretch is to $550 per student or $1,650.

    You you go with a $600,000 variable mortgage 30 year amort you are around $2,000 per month of which half is going against the principal. You have taxes, insurances and maintenance to cover but still ends up being cheaper than renting the upstairs of a house.

    This year the topic of interest rates has disappeared from the blog but it is by far the largest factor driving prices. In my opinion interest rates need to go up for a meaningful correction in Victoria, or the rental market tanks, or we have an earthquake, etc.

  74. “We really need a shift in interest rates for any sort of crash in my opinion. When you can get a 2.05% variable mortgage and 20 people are willing to line up to rent your dingy core suite I just don’t see too much desperation to unload out there.”

    Nice thoughts but if you’re banking on interest rates to cause a crash, you’re SOL. It will be a catalyst effecting a credit tightening environment which we have already started to see with 2 banks stating they have already begun to tighten the noose.

    Then the foreign money begins to leave which is early signs say it is, wether you want to wait 3 months or a year to find out, so be it, but if I’m a buyer I’m waiting. Vancouver decline will absolutely effect our market psychologically. It’s what pumped us up $150K in a few months and shit rolls down hill.

    Vancouver insanity caused how many bidding wars here up to $300K over ask the past 6 months ? Too many to count. We’re not different if this unravels.

  75. So to say there is a 26% decrease in the average price is probably dishonest.

    Appears inaccurate to me too. Median is likely a better measure because the high end fall off is skewing the average and the data period is short.

    When you can get a 2.05% variable mortgage and 20 people are willing to line up to rent your dingy core suite I just don’t see too much desperation to unload out there.

    Yes.

    Victoria isn’t quite yet like Vancouver where you have a $800,000-$900,000 Coal Harbour condo that only rents out for $2,200 – $2,500 per month.

    Victoria is not as terrible for cash flow as Vancouver, but it is pretty bad.

    Your condo example only works because you bought long enough ago and, even then, I’m not sure that you are actually cash flow positive accounting for all expenses and income tax on the profits which include the equity pay down portion of the mortgage.

    If you are paying $900 a month on the principal on your mortgage and you are in the 46% tax brackety on your marginal income that needs to be properly factored in. Is it?

    Right now a house that is selling in Victoria for $800k is renting for $3000 a month. No way you are breaking even. Seems the same with condos.

    The only way you make money on a rental property in Victoria is through appreciation imo. When appreciation levels off or drops you will lose money if you have to sell and that is the big risk in a market like ours for homeowners too. You need to be prepared to wait it out.

  76. To whoever mentioned it, the Zolo figures definitely do not correct for sales mix – and since they are using average, and the very top end of the market seems to be tanking, the number looks worse than it likely is…since the average of all sales was skewed up by Chinese ballers dropping $4 million on west side tear downs, and Richmond McMansions. So to say there is a 26% decrease in the average price is probably dishonest. It simply reflects the fact that SFD sales, and moreover high-end SFD sales account for a smaller share of the entire market.

    The rest of the data seems to supports this. It shows that sales of McMansions at the high end have dropped off a cliff, and specifically, in areas where foreign investment was highest. Meanwhile, the attached market is chugging along. At least for now. How it all plays out, nobody knows. Like I said, I think it’s headed for a major correction, but some areas (and segments) will clearly be hit harder than others. For whatever reason, people want to live in Vancouver even though it rains every day and people would rather look at their shoes than say hello to you. So let’s not get carried away.

    Furthermore, as others have pointed out, it’s not like a major correction will suddenly make areas like Kerrisdale affordable for your buddy Jim that works in IT at SFU, even if Kerrisdale sees a 50% decline. It just means that a bunch of rich folks are shit out of luck, and some other rich folks are in luck. Whatever the case, enjoy the show people.

  77. We really need a shift in interest rates for any sort of crash in my opinion. When you can get a 2.05% variable mortgage and 20 people are willing to line up to rent your dingy core suite I just don’t see too much desperation to unload out there.

  78. No-one has been able to reliably predict future prices since this board started and you are I are no exceptions. All the statements about “the crash” have been proven incorrect over time.

    The market might fall in Victoria, or it might not. Hard to think the Vancouver market trends won’t impact Victoria, but we didn’t follow their dramatic trajectory up and I doubt we’ll follow it down the same way either should that occur – at least not without other indicators such as interest rate changes and an increase in inventory.

    If you have a rental property now does not seem to be the best time to sell to me, unless you want to for reasons other than fearing a crash.

  79. If have a investment properties, it’s a great time to sell. Better to sell before everyone else starts selling.

    Problem with selling investment properties is capital gains, rents have gone up a lot, and carrying costs have gone down especially for those with variable mortgages. The last condo I re-rented the positive mostly cash flow doubled.

    Victoria isn’t quite yet like Vancouver where you have a $800,000-$900,000 Coal Harbour condo that only rents out for $2,200 – $2,500 per month.

  80. Most lots can easily accommodate a Duplex. Why not allow MFH on certain blocks? This could easily double the housing stock in the next decade.

    You can’t explain this to the average person. Victoria is primarily anti-development, anti-density, but somehow the same people complain about affordability in the same sentence. If someone has a better idea would love to hear it.

    As the population grows (impossible for anyone to argue this fact) there are really only two possibilities; increase density with condos/townhomes/duplexes or start clear cutting Langford to Sooke.

  81. Totoro: I think prices are going to trend down steady over the next 3-5yrs. Both in Vancouver and here. We’ll lag behind Vancouver by 2-3 months I bet, but we’ll follow them down.

    One would be insane to buy a house/townhouse/condo right now. If have a investment properties, it’s a great time to sell. Better to sell before everyone else starts selling.

  82. Vancouver RE prices are taking a breather after an unsustainable run up over the last 24 months; however the prices of historically desirable areas even if they correct 50% will be out of reach for most Vancouverites.

    Unlike Victoria, where there are affordable options like the Westshore, there are limited choices there for the budget conscious. IMO the market in Vancouver will go down only moderately (less than 10% on avg and more so in the upper end mkt $3MM+) and banks will loosen the purse strings again and with interest rates going nowhere, you’ll see medium price budge up again because of vent up demand.

    This happened in Singapore and Hong Kong after their Stamp (Foreigner) tax was introduced also. I believe this will play out the same way in Vancouver.

    Instead of pointing fingers, which has never solved any problems in history, the local government needs to be a little more pragmatic in fixing supply side issues in Vancouver AND Victoria. What’s the difference between having a SFH or a Duplex zoning? Most lots can easily accommodate a Duplex. Why not allow MFH on certain blocks? This could easily double the housing stock in the next decade.

    Because this is a political hot potato, no one wants to touch this. Our culture of NIMBYism is strong and well. and BTW for many of the posters who have lived in Vancouver before, it was always unaffordable versus Victoria whether it was 40 years ago or today.

  83. AG,
    Ross Kay said the price drop is already down 26% from 6 months ago, not 30 days. It’s in the interview.

    Looks like the foreigners decided to keep on flying east. Not so far to go from Quebec now. 😉

    John O’Dowd ‏@John980AM 4h4 hours ago
    TOMORROW: Toronto developer says business is booming since Vancouver introduced foreign buyers tax. Tune into @CKNW from 7:30am #VanRE

  84. I thought the issue with the Zolo numbers was they didn’t adjust for sales mix. So the “26% drop” just signifies a larger proportion of condo sales vs SFHs.

    Clearly the price is dropping in Van, but a typical detached house is not 26% lower than it was a month ago. Give it a year and that might happen, who knows.

  85. Sales ? They fell off a cliff Marko , where have you been ? If a Westside Van house slashes 600K the chances are it was priced accordingly to recent sales. Since there are many more like it then they must be all over priced ? Sounds like panic in agent land.

  86. I think it’s great news if Van prices see a solid drop. They’re completely out of reach over there. But I think it’s going to take several months until we know if this is a sustained drop underway or if this is just a post tax blip.

  87. Why is everyone posting price slashes….would it make more sense to post sales?

    If I list a $3 million dollar home for $3.6 million and slash the price $600,000 the sky is not falling.

  88. Why don’t you tweet those two guys Marko instead of asking us for examples. Afterall they are your colleagues.

  89. Those are some serious price slashes of $200K up to $600K. Won’t be long til that starts happening here. Manias all end in this manner, just like Beanie Babies. Every one wants one , then they don’t. 😉

  90. Yea, wow. The 1944 Bungalow dropped from a cool $3 million to $2,849,000. What a deal, you get a 5000 sq/ft lot too.

    I really would like to see concrete examples of sales that are comparable to see this 26% drop.

  91. Good plan Triple A, using a solid paid service is well worth it to stay ahead of the herd if you want to make above average profits. There are some shitty ones out there too so have to check them out closely.

  92. 70% sounds on the high side, no?

    Probably the most dangerous segment of the market is the $500k to $1M as only 5% is required.
    This would probably be 70% of home purchases now and made by duel incomes and likely rental income. It wouldn’t be hard to find yourself underwater if any number of variables were to change. I maintain that unemployment will be the driver of any ‘significant’ downturn.

    After $1M mandatory 20% down so therefore even a YOY loss of 20% treads water net of any closing costs less principle paid down.

    I pay more than $1000 annually for an online brokerage that provides excellent insight. My returns would be not be anywhere as strong without the market analysis and individual stock recommendations. I encourage anyone seeking strong returns to do the same. The last recession lost faith in the industry but was particularly unfair to excellent advisors. I won’t provide the name of whom I’m using but Bloomberg TV has a number of reputable brokerage houses daily

  93. 26% drop price in Vancouver is the largest North America has ever seen

    So what you are telling me is a house that was $1,000,000 million 30 days ago is now $740,000? Would love to see some examples of these deals.

  94. Interesting story about the banker Bizznitch. My buddy knows a credit counselling guy who was telling him he believes 70% of Victoria is teetering on heavy debt loads and is a paycheck or layoff away from disaster based on what he’s been seeing for a long time now. When your friends and neighbors are off tromping around the globe, doing major renos etc, odds are it’s all on easy credit. They just won’t tell you that part.

  95. Ash ,
    The MSM is only just now beginning to print real numbers after years of denial of money laundering and shady realtors and foreign cash because they have no choice when lawsuits and criminal charges are laid.

    I know a couple in the media and they have been consistantly blocked by the advertisers threats when a bad news story is going to come out. Big money controls the show wether you want to believe it or not. When have you seen a real investigative story in the TC ?

  96. I’ve just grown tired of this claim that shows up here time and again: that if only the MSM had more balls, or was less afraid of losing money, they’d speak the “truth”. I guess the logic is that papers are run on advertising paid for by the real estate industry, who would pull their money in an instant if they didn’t like what they read. I just don’t buy it.

    In any case the Sun and the Globe have been pretty outspoken about the local industry and the turning market conditions as of late, so I’m hoping we can put that old theory to rest.

  97. Hawk: I agree, as the correction in Vancouver deepens, it’s most likely banks will tighten up their lending standards. I think it’s already happening now. In fact, I know a banker who’s wife is itching to buy a house, and he says “Just wait, the time isn’t good. It’s going to correct”. I’m sure he sees a lot more numbers than most of us can access.

    Also, I think if there’s no pick up in the market in Vancouver in September, agents will be encouraging their clients there to sell, sell sell. Speaking of that, I’m sure there’s a few realtors here in Victoria bailing off their RE investments. They’re the canary in the coalmine. 😉

  98. aside from the phenomenon in Van and Toronto was he way off?

    Yes, every major city in our country shot up after he claimed peak and is now higher…

    peak of the real estate market in Canada was April 8th 2012, as posted here on Greater Fool.

    Some Teranet examples from Apr 8, 2012:

    Calgary up from a bottom of 153 then to 179 now
    Winnipeg up from 180 to now 203
    Hamilton up from 132 to 188

  99. “I have no doubt that the Vancouver market is headed for a major correction – but as with all corrections, it won’t be an across the board drop.”

    Eventually it will be across the board. We all borrow from the same banks who will be tightening lending bigtime and scrutinizing employment and credit scores for all levels with these scary numbers.

    Banks will be making changes as fast as any other financial lending entity would when a market shows crash potential. You can bet they are not in “wait and see” mode behind the scenes.

  100. @Rook and RE: the Vancouver market, the drop in sales and prices is most apparent at the very top end, which should come as no surprise. Sales of Chinese McMansions with 3 wok kitchens and a servant’s quarters are tanking. It looks like West Vancouver, Richmond, and the west side are all taking a beating, which is exactly what you would expect to see in the face of a 15% tax aimed at Chinese speculators. Meanwhile, the white flight eastern suburbs are, so far, doing fine.

    I have no doubt that the Vancouver market is headed for a major correction – but as with all corrections, it won’t be an across the board drop. Obviously, the market segments most affected by foreign speculation are bound to be hit harder than, say, Maple Ridge. As for how it affects us, who knows? Probably a few less white flight Vancouverites heading over to make stupid over payments on mediocre housing to enjoy our mediocre climate where summer comes but for a week or so, and then in the blink of an eye, it’s back to partly sunny skies with southeasterly winds gusting at 30 km/h, and a temperature not quite warm enough to enjoy a dip in the lake. But I digress…

    The stats here tell the story:
    https://www.zolo.ca/vancouver-real-estate/trends

  101. Mike’s getting angry now the cat’s out of the bag and has to resort to 3 year old stories. What’s next the McLeans pic Mike ?

    I don’t read Zero Hedge all that often but they do have legit charts from government sources that the MSM ignores. Part of the story was quoting local agents as well as Reuters so I guess they know shit too?

    Easy to call anything bait-click these days but I never see any of you people’s post your top info sites. Instead you just cut down anything that shows something that goes against your perm-bull thesis. The TC business section maybe where never a negative word is ever spoken according to company rules ? LOL.

    Might even be Mike’s new job around here to pump the local condo/developer rag for more bait clicks. 😉

  102. Ash: how is that different from any other newspaper?
    Michael: aside from the phenomenon in Van and Toronto was he way off? Also, would you include a photo of yourself if we are judging reliability with looks?

  103. “Like them or not they publish the charts and analysis the mainstream are afraid to publish.”

    I doubt it, the Sun and the Province love juicy headlines, good or bad as they sell papers and advertisers make money. Only problem is they need to maintain credibility for the long term.

  104. I have no problem with Just Jack’s #’s, I find them very informative and have no reason to doubt them.
    My counter is every blog post such as zerohedge is traffic driving. I’ve never doubted the potential for a downturn however I usually side in the middle. Goes for Target Prices as well. Just my opinion.

  105. Lol, Ross Kay starts by suggesting a class-action lawsuit… talk about calling the kettle black!

    Here’s just an example of the rubbish this Garth minion has been peddling over the years…

    “On May 19th, 2013 we recorded the lowest value of Canadian consumer engagement in real estate since 2010. What is scary here is that on April 8th 2012, we reached an all time high engagement value. The May 19th numbers for 2013 represent about a 72% decline over that peak number. This massive decline raises grave concerns not being reported in newspapers across the country.
    “So we project 60 to 90 days from May 19th that MLS sales will be reported that will reveal the market died on May 19th. Our numbers have not been wrong since 2008. So as it turns out the peak of the real estate market in Canada was April 8th 2012, as posted here on Greater Fool. Peak pricing was established and as recorded MLS sales prices now show, anyone who bought in competition around that date paid too much.”

    He sort of looks like Garth too…
    ?w=500

  106. “Sure displays the inadequacy of the monthly median, especially when trying to figure out how much prices have risen in a year (undoubtedly worse in months like Aug, Dec)… hence why boards moved to HPIs.”

    Which is why HPI is bullshit the way GVREB and VREB use the info but the fools like Mike suck it up like kool-aid. Ross Kay was part of designing the HPI, I think he knows his shit.

    The public has been bamboozled. Which mainstream media source will be the first to have the guts to put this out there? The NDP will run wild this with this so won’t be long til MSM has no choice to show these boards are corrupt.

    Ross Kay is calling for major lawsuits coming against the agents. This should be an interesting fall as the ass covering begins.

  107. Zerohedge is on about the same level as fool.com or breitbart. They’ve been proclaiming the end of the world for years now. Good clickbait, but not so useful for impartial analysis.

  108. A interesting and valuable update with a outlook for the very near future in Vancouver RE and the province from Ross Kay. Victoria is mentioned in this segment. 26% drop price in Vancouver is the largest North America has ever seen, but no one seems to know that this is currently happening. If you disagree with Ross Kay on this one I would love to hear your reason with evidence.

    Start listening at 8:15
    http://www.howestreet.com/2016/08/21/this-week-in-money-61/

  109. So you’re saying the article is not true TripleA ? Like them or not they publish the charts and analysis the mainstream are afraid to publish.

    Just like Jack posts numbers here that that VREB or agents won’t ever show you or the local media will never publish in order to not offend the advertisers that keep their paychecks rolling in.

  110. Sorry guys, more reality for you to digest. The rich are leaving and stashing their cash while they can. No worries, Van will be a blip and Victoria and bank stocks are going to the moon.

    “I’ve Never Seen Anything Like This Before” – The Housing Markets In The Hamptons, Aspen And Miami Are All Crashing

    One month ago, we said that “it is not looking good for the US housing market”, when in the latest red flag for the US luxury real estate market, we reported that sales in the Hamptons plunged by half and home prices fell sharply in the second quarter in the ultra-wealthy enclave, New York’s favorite weekend haunt for the 1%-ers.

    Reuters blamed this on “stock market jitters earlier in the year” which damped the appetite to buy, however one can also blame the halt of offshore money laundering, a slowing global economy, the collapse of the petrodollar, and the drastic drop in Wall Street bonuses. In short: a sudden loss of confidence that a greater fool may emerge just around the corner, which in turn has frozen buyer interest.”

    http://www.zerohedge.com/news/2016-08-27/%E2%80%9Ci%E2%80%99ve-never-seen-anything-housing-markets-hamptons-aspen-and-miami-are-all-crashing

  111. You’re forgetting about dividends.
    2-4% annually depending on the bank.
    There’s been some great returns on US banks in the last 2 years (outside of the major banks).

    I don’t see strong financial growth in the banking sector. There are better places to put your money.
    In uncertainty I’m using high yield ETFs with low MERs while market has declined.

  112. Fabrication is your forte Mike. I stand corrected as I was looking at Royal Bank US stock chart(on my phone, bad me) where it is still down about 8% from 2 years ago. Though if you were a US holder it dipped 35%, versus 20% dip in Canada over last 2 years due to exchange rates, and is up only 10% over 2 years.

    Bit of a rough go for banks that are raking in billions daily. What will happen when the bottom falls out of Vancouver and all those mortgages to foreigners bite the dust ?

    My handful of stocks are still doing just great AG. How’s your 2.2 % going ?

  113. @ Just Jack “here is a frequency table of house sales and how they are distributed over $100,000 increments in the core between the two years.”

    Maybe I am one of the people getting lost on statistics, but the 2015 column totals 1025, while the 2016 column totals only 378. If it’s just the number of houses sold in each price range, shouldn’t the the totals be much closer?

  114. Michael – remember that Hawk’s portfolio is up “more than 300%” so far this year. I’m sure that his basement suite is full of Bloomberg terminals and support staff by now. As a peerless investment genius, nothing that he says should be questioned 🙂

  115. Two years of gut wrenching loases of 40% then back up for 4%.

    Lol…hawk, XFN has never been higher.
    You should really do the 2 seconds of research before you fabricate stuff.

  116. Sure displays the inadequacy of the monthly median, especially when trying to figure out how much prices have risen in a year (undoubtedly worse in months like Aug, Dec)… hence why boards moved to HPIs.

  117. Guess Mike is making up for losses after buying at the high back late 2014 when bank stocks were higher. Two years of gut wrenching loases of 40% then back up for 4%. Grasping at straws is a popular perma bull habit these days.

  118. Here’s an interesting stat. If you look at prices for all types of properties that sold in the core the year over year median for August has NOT increased.

    Sale Price, Median

    Month 2015 2016
    Jan $422,500 $451,200
    Feb $472,000 $510,000
    Mar $512,850 $547,950
    Apr $487,000 $585,000
    May $524,500 $549,450
    Jun $499,900 $551,000
    Jul $468,500 $520,000
    Aug $520,000 $520,000

  119. Cdn bank stocks are predicting good things as they broke out to new highs this week… congrats to wise investors who added at the start of the year, shrewdly collecting their 4+% dividends.
    http://stockcharts.com/h-sc/ui?s=xfn.to

    Oh, and I ran some beargression analysis and there’s a 98.8% probability that the same bears predicting a crash last year and this year will be predicting a crash next year.

  120. Lochwood is a delayed offer or blind auction. That is only being shown for 4 days with the offers to be presented by August 30. That’s going to bring a lot of buyers out all at once on a weekend. Especially when it has been well under priced to garner more attention.

    Your bidding on a home that should be listed for $200,000 more. Why not throw a bid in to see what happens. I’d be surprised if the owners didn’t get at least 10 initial bids on the property.

    These auctions can back fire on the owner too. They might get a better price if they exposed the home to the market for longer than 4 days.

  121. How many cars at all the other open houses? Cherry picking one house is lame, especially with Vancouver just stepping off a cliff into the abyss.

  122. OK, JJ, I see where you are coming from. However, without a measure of normal variance, change is impossible to properly interpret because you can’t know whether a drop or an increase in any variable is meaningful. I went to the VREB stats to see if there was any way to glean a measure of variance from their data site, but I didn’t see it. Not publishing variance stats is a very easy way for the VREB to convince people of whatever they want.

    HAVEN”T DONE STATS IN A LONG TIME SO CAVEAT EMPTOR

    the data you sent is interesting. I’ll acknowledge but ignore the larger intervals at the high end, so bear in mind that these numbers might not be exactly accurate. If you can break those categories down, I can redo this. Having larger intervals toward the end means that data in those intervals could skew things.

    I am using a liberal alpha of .1. In 2015, on average, about 100 houses were sold across all price ranges with a standard deviation of about 72 sales (lots of variability across price ranges). If I plot the sales and standard deviations across all price ranges, I can see that significantly more houses were sold in the 500-600 and 600 to 700 thousand dollar ranges.

    In 2016, on average across all price range, about 38 houses were sold. with a standard deviation of 21 (again high variability). If I plot the standard deviation across all price ranges, I can see that significantly fewer houses were sold in the 300 thousand dollar range and significantly more in the 600 thousand dollar range.

    I can also see that the average number of houses sold in 2015 is higher than the average number of houses sold in 2016. I can run an analysis of variance and find that the difference in number of houses sold across all price ranges between 2015 and 2016 is statistically significant p=.014033 This is solidly significant. I feel confident concluding that the number of sales in Victoria core has dropped by an amount larger than would be expected by chance.

    If I plot trend lines I can see that in 2015 the bulk of the sales was in the 900 or less category whereas number of sales across price ranges in 2016 are quite flat. I hypothesize that the drop in sales in the 900 and under category is the reason for the significant drop in number of sales from 2015 to 2016. so, dividing the data into two categories (under 900 and over 900) and running a two-way analysis of variance (year by category), I find a significant effect for year (p = .0043) and for under vs over 900 (p = .0139) and a significant year by category interaction (p = .0885). Post-hoc analysis shows that the interaction between year and price category is due to a significant drop in the number of sales in the under 900 category for 2016.

    so, I am confident (within certain constraints of the data) concluding that the decline in sales from 2015 to 2016 is because of low sales in the under 900 category.

    Back of the napkin limitations include: only 10 data points, non-normal distributions (2015 has a positive skew, 2016 is platykurtotic or flat), violation of homoscedasticity (equal variances). not sure whether sales dropped because of fewer buyers or because of fewer listings.

    thanks for sharing the numbers. Very interesting indeed!

  123. When it comes to condos in the core, there is a lot more pressure on prices to rise relative to houses with higher sales activity and lower months of inventory than houses. Yet the median and average prices for condos have not been rising over the last few months when they seemed to have peaked in May.

    Occasionally you’ll here someone tell you that the market is hot for condos but not close to the level you hear when it comes to houses. And that’s due to the days-on-market. Right now the median days on market for a condo is 18 compared to that of a house at 11. To some that may seem insignificant, but it seems to be enough to substantially reduce the amount of bidding wars on condos and make the marketing practice of deferring offers to entice multiple bids less effective.

    At this time, I consider the DOM to be the most important indicator to be tracking as it is measuring the feelings of how “hot” buyers consider the market. If it were to rise from 11 to 20 for houses in the core that could signal a significant change in how buyers perceive the stand alone housing market and substantially reduce the number of multiple bids on a property.

    That indcator has been dragging along the bottom at 9 or 10 days since the big expansion in prices in February and I don’t expect it to change radically in the next few months. But it is something to watch – just in case.

  124. I lose most readers when I bring up the mode, skewing and fat tails.

    Funny how Leo is able to take the same data, chart it with reasonable comparisons and make reasonable conclusions and formulate defensible hypotheses as a result – losing no-one in the process.

  125. I didn’t show any data on condos in the western communities if that’s what you mean by nether regions?

  126. Standard deviations? Really? On this blog?

    Once you go to the bother of calculating the standard deviations, you have to come to some understanding in what those standard deviations mean. I lose most readers when I bring up the mode, skewing and fat tails.

    But if you want to see something interesting here is a frequency table of house sales and how they are distributed over $100,000 increments in the core between the two years.

    Sales, Number of
    Sold Price 2015 2016
    $0 – 200
    $200 – 300
    $300 – 400 25 4
    $400 – 500 163 29
    $500 – 600 223 62
    $600 – 700 192 71
    $700 – 800 150 56
    $800 – 900 80 50
    $900 – 1,000 52 25
    $1,000 – 1,250 52 35
    $1,250 – 1,500 40 22
    $1,500+ 48 24

    This will give you a good visualization of how the standard deviation around the mode has changed. Plot this and see what you think.

  127. Actually there are more new listings of houses in the core this August compared to the same time last August. 185 versus 260 this year.

    However, the reason why you may feel there are less is because the asking prices are now out of your price range. All prospective purchasers will have varying prices ranges that they can afford. If money is no object then you have over 270 houses in the core to choose from today. I highly doubt that the range of quality in the houses has changed in the core. What has changed is that homes that need repairs are in your price range. So it is very much a personal opinion when you say there is a “chronic” shortage. Since there is enough houses for sale in the core today, to keep the median house price from rising. If there was a chronic shortage, the median would be increasing.

    Month Sale Price, Median
    Jan $655,500
    Feb $681,500
    Mar $740,000
    Apr $759,500
    May $760,000
    Jun $743,000
    Jul $754,500
    Aug $729,250

  128. OK, I’ll weigh in on JJ’s numbers. Hard to say what they really mean without knowing standard deviations, but 113 and 116 is probably non-significant change in the Oak Bay, Saanich East and Victoria zone. Things still chugging along there. The traditionally cheaper hoods appear to be attracting more buyers but can’t say whether this is a significant uptic or a predictable pattern because no data over time.

    Can you tell from your data if it’s condos in the core that are selling or condos in the netherregions (Western communities)? If condos in the core, I would consider speculation a possible explanation (?foreign buyers evading the GVA tax) , if it’s condos in the western communities, I would say it’s probably high ratio buyers trying to get in.

  129. Ozzie Jurrock just said Vancouver sales as of Friday down 68%, East Van down 78%, Westside down 54%. That’s some serious “wait and see”. The longer the buyers wait, the more pressure on sellers to drop the prices. Coming soon to Victoria once the reality that the downside is in full motion.

    Agents keep saying it will take several months to play out. Good luck with that. Bagholders will be aplenty by then as projects begin to be delayed or cancelled and inventory finally starts to increase.

  130. Surely you need to adjust for the chronic lack of inventory in the core? There are so few decent homes coming on the market in Oak Bay, for example, and many of the homes that have been listed for a while have problems or are badly mispriced. That has to affect sales all through the core. I’m guessing that Vic West etc haven’t seen the same drop in inventory.

    I think that using MOI would be much more relevant than a simple comparison of sales numbers.

  131. Well that’s two different replies so far reflecting

    1) The Theory of Substitution

    2) Cognitive Dissonance

  132. Gwac: I have the same thoughts when I look at JJ’s stats.

    I think this is showing that there is somewhat of an upper price ceiling here that people can afford or are willing to pay. People who figure their $500k houses are going to be worth $1.2m in five years etc. should really look at these figures and give their head a shake.

    I believe the same kind of thing is happening in Vancouver (People buying more condos than SFH there).

    Marko: Do you have to have a real estate license to sell real estate in BC? This one article suggests otherwise. Mind boggling if true.

    https://twitter.com/SteveSaretsky/status/769312997902725120

  133. How about single family homes in the combined areas of

    Oak Bay, Saanich East and Victoria 113/116 = -3%

    versus

    Vic West, Esquimalt, View Royal and Saanich West 55/35 = +57%

    Still no surprises for anyone?

  134. So where are we relative to the same time last August.

    683 total sales of all kinds in all areas versus 565 a year ago. A 21% incease

    Broken down by location as:
    Victoria Core 384/298 = +29%
    Western Communities 168/126 = +33%
    Saanich Peninsua 60/80 = -25%
    Other 71/61 = +16%

    And property type
    Victoria Core
    Single family 168/151 =11%
    Condo 169/109 = +55%
    Townhouse 26/25 = 0
    Other 21/13= +61

    Any surprises for anyone?

  135. If any current BC Liberal officials were tied to large scale Invested AirBnBs it would be game over next May.

  136. That’s what makes regulating AirBnB so difficult – there are investors with dozens or hundreds of properties that are basically operating as “virtual hotels,” but not paying hotel taxes or following the same city zoning & safety regulations that registered hotels or B&Bs need to follow. Then increasing concentrations of AirBnBs in condos or rental buildings causes reductions vacancy rates, which in turn increases rents – according to Laane.

  137. “One thing they found is that a lot of properties weren’t owned by individuals advertised as “verified ID local hosts” but by bigger investors that had dozens of these properties, eg., “Danielle & Lexi” in the Laane study.”

    This is often an issue with suites and other rentals. It’s not possible to regulate for user; only use. It’s not lawful to restrict secondary suites to owner-occupied buildings (much as Councils try to do this or do this) or restrict suite occupancy to relatives, or permit short-term rentals only in a person’s primary residence. The use is all that matters, and it’s completely separate from tenure. You can require that a bed and breakfast exist in a residential occupancy, meaning that the business must exist in a residential occupancy use, but that person does not need to be the owner.

  138. Bizznitch,

    The NDP is really ramping it up. If 95% of the population agreed with the foreign tax, they will be all be on board with this too. Christy has no choice to follow suit or lose.

    At any rate the writing is on the wall for the foreign buyer having anymore serious impact. They will be looking elsewhere outside of BC. Now we have to see how many locals like buying at the top or catching the falling knife.

  139. To me, that $65 cleaning fee is akin to selling a $1 item and charging $20 for shipping. If they’re cleaning the unit themselves they may as well be asking an additional $15-$20 per night.

    I guess if you value your time at zero this would be the case. I pay for a cleaner for my house and I value the job she does. $65 seems pretty good for taking a lived-in space with kitchen and bedding and making it hotel level clean and ready for a guest – I think you are severely underestimating the time and effort vs. shipping. When I book on Airbnb I combine the nightly rate with the cleaning fee and it is still less than a hotel with way more amenities for a family.

  140. Also agree JD. On the surface, RE looks like a ticket to wealth and happiness (a la HGTV), but it’s not really – it’s place to park your stuff while you go out and do other things. (anyone who’s experienced a real downturn like the 80s understands this all too well).

    Yes there are a few places that I remember that I could have bought, but I don’t dwell on them, because life is too complicated for that. If I had bought them, I may not have earned or saved as much money, or been ready to pounce on our current place so fast.

    I’ve also had to deal rental properties that I’ve hated at times, because of the unexpected expensive repairs, & great looking credit-checked tenants that turned out to be jerks.

    RE is interesting – it provides you and/or your renters with shelter – but it shouldn’t become the place where you gain all your self-worth – or all your returns either.

    For AirBnB, other cities have done studies on negative impact of AirBnB (eg., Laane.Org study on LA) maybe Victoria or Vancouver would do the same at some point. They focused on “whole apts or houses” – most likely to be rented long term. One thing they found is that a lot of properties weren’t owned by individuals advertised as “verified ID local hosts” but by bigger investors that had dozens of these properties, eg., “Danielle & Lexi” in the Laane study.

  141. “Can’t you just count the amount of airbnb adverts in the core to get a solid number of how many long term rentals are being removed by this website?”

    No, because as he said earlier it’s not guaranteed that someone with a short-term rental ad would otherwise be renting the suite or rooms long-term. You can’t even be sure that the AirBnB suite is really a suite – it could be a proper bed and breakfast without a separate kitchen.

  142. Marko Juras
    “In my opinion it is really tough to peg how much long term rental supply is removed by AirBnbs.”

    Can’t you just count the amount of airbnb adverts in the core to get a solid number of how many long term rentals are being removed by this website?

  143. “That said…. I can’t see anyone saying, “thank god I only payed 950k for this fixer upper next to hillside mall” in the next few years….”

    Who knows. It’s certainly not the deal of the century, but it might not go down. Now that I have a place to live, am I scheming to buy more real estate? Hell no. Equities all day long. $9.99 brokerage fee (I can even pay that with my Avion points) and I can sell as quick as it takes me to log in. No open house necessary, and not even a capital gain as I still have registered room.

  144. To me, that $65 cleaning fee is akin to selling a $1 item and charging $20 for shipping. If they’re cleaning the unit themselves they may as well be asking an additional $15-$20 per night.

  145. Agree JD. Life is to short to regret things like that. Shoot, I remember watching the run in 2003. It was my first house purchase so I did not stop watching the market after I bought in particular since I was spouting off to all my friends to buy and had some saying prices were too high. Anyway, there was a number of properties I said later that I should have borrowed from the mob to buy…. At the time the free money wasn’t available. The bank would only give me $200k @6% with 10% down for 25 years… Anyway there was a crappy house in Vicwest for $140k. I watched that one flip three times in two years with only a paint job. $140-$250. It might still be flipping. Bugs eating the framing and crazy bikers next door… Contemplated buying a place in the railyards for $75 k for my office. oops… There was a nice place on the George water way close to Bamfield park for $350k. big old house that needed work but on the water! There was also seven miles of water front just past french beach for $750k… seven miles! All other peoples opportunities. Like my dad used to say, opportunity knocks once, many times….

    That said…. I can’t see anyone saying, “thank god I only payed 950k for this fixer upper next to hillside mall” in the next few years….

  146. @ Marko
    I checked out that condo you linked to. It’s actually priced at $120-130 per night for most of the year. $109 was the lowest I could find in January.

    I’m not saying that the return is worth all the effort, but $120-130 is much better than $75.

    Also keep in mind that the owner might be using it for a month or two each year. And tenants pay for the cleaning costs after each visit. It might just be an effective way to finance a vacation home.

  147. “One of my top ten regrets is not buying a house on Reed St in 2014 for $350,000. That house sold the following year for close to $500,000. On the other hand, how was I to know? But like everyone, I found a suitable place to live.”

    I’ve also regretted not buying property – my parents talked me out of buying a new warehouse-conversion condo in Yaletown in 2001ish (when I was 26) for $150k because it was already too expensive. Probably $450k now I would guess. I’m also interested in why people express regrets in not buying real estate, in particular. It’s not a particularly prescient investment if you’re buying it to live it. Furthermore, the price of entry is rather steep.

    My house has probably gained $300k since I bought it in 2011. If I had bought Constellation Software in the same period for what my house cost, I’d have made more than 10 times that. I’d frame my regret in terms of not doing that. Let’s not be congratulating ourselves on our brilliant real estate investments – there’s been a strong degree of inevitability to it for those of us who need a place to live, and as far as selected equity gains over the same time period, they’ve seen pretty sucky paper returns.

  148. Long past due to Ban AirBnB.

    Quite a few clients of mine that I’ve talked to about AirBnbs (run out of SFH suites) have told me they wouldn’t rent out their suite otherwise. There are various reasons such as they have parents/in-laws visiting for months at a time and with AirBnB they can just block out that time, with a rental they can’t.

    In my opinion it is really tough to peg how much long term rental supply is removed by AirBnbs.

    As far as downtown condo rentals I still don’t understand the numbers. This is a unit that is identical to mine at the Era https://www.airbnb.ca/rooms/5969673?s=bixt1L_z @ $75/night………or you can rent it out on a 12 months lease for approx $1,400 where there is no work involved and occupancy is 365 days.

  149. “Seems like everyone is preoccupied with pretending they aren’t working class.”

    Bang on. Surprising how the millionaires inhabit this blog trying to preserve their temporary wealth. I’d be doing something better if I was a well off home owner. I guess with riches comes boredom for many.

    What’s sad is seeing what is happening next door and could be coming here in the next year as interest rate hikes look like a lock in the US.

    Jobless in Alberta: Tens of thousands of energy professionals are out of work and out of hope

    “Meanwhile, other sectors don’t want ousted employees from the oilpatch and the green jobs promised by politicians as part of their forced transition to cleaner energy to meet new climate change targets are scarce or not offered at all to those with oil and gas experience on their resumes.

    “There is a real human tragedy here,” said Dan Allan, president of the Canadian Society for Unconventional Resources, who estimated there are 40,000 to 60,000 energy professionals out of work in Alberta based on feedback from his membership, which straddles all disciplines — geoscientists, engineers, finance and business specialists.”

    http://business.financialpost.com/news/energy/jobless-in-alberta-tens-of-thousands-of-energy-professionals-are-out-of-work-and-out-of-hope?__lsa=5991-3b90

  150. I’d say that not declaring income is a very short-sighted decision.

    Airbnb retains payment information. CRA is well within their rights to get a court order to obtain payout information to Canadian citizens. They did it with e-bay – I see no reason they would not do it for Airbnb. And if you are audited you have to pay past amounts due plus interest and very significant penalties.

    If you haven’t paid taxes on your rental income, whether Airbnb or not, the voluntary disclosure program is available.

    http://www.dww.com/articles/court-orders-e-bay-to-disclose-sellers-to-canadian-tax-authority

    http://www.cbc.ca/news/canada/revenue-canada-steps-up-hunt-for-ebay-tax-dodgers-1.839479

  151. Article in TC re: Students and rental crunch.

    Long past due to Ban AirBnB.
    Hotel taxes go to general revenue which in turn (should) fund many social programs.
    How many declare income to CRA?

  152. One of my top ten regrets is not buying a house on Reed St in 2014 for $350,000. That house sold the following year for close to $500,000. On the other hand, how was I to know? But like everyone, I found a suitable place to live.
    As for oak bay, Fairfield, etc., sure, the streets are pretty. Sure, you can walk to Fairway and Pharmasave and Starbucks. But that is true of many neighborhoods in Victoria. If you can’t afford it, get over it. Seems like everyone is preoccupied with pretending they aren’t working class.

  153. @Marko – “These are my thoughts too re Uplands, Oak Bay, Fairfield….as the population grows you’ll always have the 1%ers that will want to live in these areas.”

    This year I finally got it. When I went to some of the open houses and saw how casual some people were about the process, it finally sank in how rich some people are and how hundreds of thousands of dollars are not something to get in the way of them having what they want.

    I don’t know how the foreign buyer situation and the tax will affect prices in the short term, but I do know that compared to the number of rich people in the world, there are a paltry number of total properties in the core of Victoria (and even fewer if you stick to the traditionally “desirable” areas).

    One of my top ten regrets is that I didn’t buy a house in the Henderson area when they were around $400K. It doesn’t help that my spouse reminds me sometimes that he thought it was a good idea at the time, but I was the one who thought that was too much money. That house has tripled in price over 10 years, but, as they say, past performance is no guarantee of future returns.

  154. Yes anyone can apply to any school. But your odds are much better if you’re in the catchment (especially a popular one like willows)

  155. @ Parry

    Here is a contrarian view. I’ve been reading my ENTIRE life that there is a housing bubble on the west coast. I’ve lived here for 13 years and in that time prices went up a bit, then were flat for a decade, then up a little recently.

    “Then up a little recently.” Like SFHs doubling since 2010 according to Hawk’s chart. So, it would sure be something to see if prices really picked up.

    But if you want to make a killing, why not buy oil. It’s really cheap. Well not as cheap as it was, but well under half the recent peak.

  156. What if this is just how it is. Every year there is more people, and every year people that have things get richer and richer.

    These are my thoughts too re Uplands, Oak Bay, Fairfield….as the population grows you’ll always have the 1%ers that will want to live in these areas. The biggest developer in Happy Valley, for example, doesn’t live in Happy Valley, lives in the Uplands.

  157. What you should find interesting is that despite all of the talk of properties selling over asking price the median price for houses in the core has declined slightly this month?

    My empathy goes out to all of those that are desperately trying to find a home for their family.

    If you feel that waiting is destroying your life – just buy. It doesn’t matter to me if you buy or not.

    In fact, it doesn’t matter to anyone what you do. If you’ve got $15,000 – you can get a 2 bedroom condo. $30,000 and you’ve got a house. Just stop whining about it.

  158. Seasonal declines do not happen every year. You’ll find seasonal variations when the market is in balance but not when it is hot or the opposite case where there are a lot of foreclosures.

    And If you are going to take what I write out of context there will be a fee charged to you.

  159. Parry
    August 25, 2016 at 1:09 pm
    Vancouver sun is a sad click bait paper these last few years.

    Hi Parry,

    On that note we do agree. It is very interesting, however, that when the headlines over the last 6 to 7 years trumpeted the gains in housing, it was the bears on the various blogs stating the same thing as you today.

    It doesn’t really matter why sales are so drastically down right now, they are and the problem with that is that it leads to price reductions. Check out Robchipman.net, a Vancouver realtor who posts the daily transactions. Yes, there are sales but, as you can see they are all sold at a discount.

    What kind of a red flag is that to sellers? Well, let’s put it this way, the same forces, realtor and media manipulation, that drove this market up are driving this market down. Try this link for media and realtor imput on the market: http://www.theprovince.com/news/local+news/summer+slump+metro+vancouver+house+sales+plummet+after/12148802/story.html

    I’ve bought and sold 6 homes over the course of 30 years in all types of market conditions and quite frankly this market scares me the most. You don’t and shouldn’t believe various newspaper headlines because today you have the internet. The bigger problem is that most of the public do believe what they read in the newspapers.

    Make sure you understand the market you’re in before you buy or sell. It really could mean the difference between having a nice home or losing a nice home.

    Good luck.

  160. “Or is it still hard to find a decent house out there?”

    It’s pretty rough looking out there judging by my PCS, which is set to max $950,000. Anything decent is going for a lot of money, whether that means that people are still overbidding in auctions or the asking prices have just crept up to what sellers now expect. A house like 1110 Summit that I pointed out the other day might have been listed for $650,000 in the spring and sold for $750,000. Now it’s listed at $799,000 and sells for $795,000.

  161. I find it odd that at the first signs of MOI over 2.0, at a time when seasonal declines happen every year, suddenly there are all these calls for catastrophic plunges in Victoria SFH prices.

    It seems oh so recently (2014?) that we were up at 5-6 MOI, and noting that this was a healthy range, favoring neither price increases nor decreases.

    So this was lousy guidance? Or is it still hard to find a decent house out there?

    Example – quote from Just Jack, July 3, 2014 (back in the Blogspot days):
    “Less that 5 MOI, a SNL% greater than 60% and a DOM of less than 30 indicate a market in favor of the seller that may lead to increasing prices.”

  162. OK thanks for clarifying. I’m pretty sure we were on it before Feb 12. In this environment of high enrollment I can’t see them holding off on telling parents if they know there are spots, despite the policy. Perhaps they do stick to the Feb deadline, not sure.

  163. The school states that applications from students who applied after the February 12 deadline and are on the waitlist won’t be processed until the first week of school. I’m not sure if you applied before the deadline or not, but if you didn’t that is good. Here is the policy BC schools have on this:

    Students applying after February 12 will be placed on a wait list that will be reviewed and processed during the first week of school. The student is to continue to attend their present school until they are informed otherwise.

    http://www.sd72.bc.ca/school/willowpoint/Pages/newsitem.aspx?ItemID=77&ListID=c3858ed4-a39e-4cd6-bd99-faaae7fc7cab&TemplateID=Announcement_Item

  164. “You don’t find out if you have a spot from the waitlist until the first week of school and there are typically some spots that open up.”

    Not true. We found out about our waitlist spot in June. If people ahead of you drop out and inform the school, they let you know ASAP.

  165. Except that Willows is apparently full from within the catchment right now.

    Maybe, but if you registered by the February 12 deadline you would have a much better chance and would know by March 31 if you are in for sure or on the waitlist. Wait until August and cross-catchment transfer is unlikely.

    You don’t find out if you have a spot from the waitlist until the first week of school and there are typically some spots that open up.

  166. Vancouver sun is a sad click bait paper these last few years.

    The reason there was a shortage of sales in early August is because of an insane, literally insane 15,000+ sales right before Aug 2nd.

    Here is a contrarian view. I’ve been reading my ENTIRE life that there is a housing bubble on the west coast. I’ve lived here for 13 years and in that time prices went up a bit, then were flat for a decade, then up a little recently.

    What if this is just how it is. Every year there is more people, and every year people that have things get richer and richer.

    10% more this year and 7%+ next year.

    Have you seen the zero inventory!

    I’m sorry but there is like 99% renters that are angry on this website all day long, there has to be someone who’s point of view lines up with reality here folks.

  167. Yes Mike, “they” never predicted this year so how can “they” predict the next two years calling for more low paying tourism jobs.

    Again Mike, waves from Vancouver will be flooding here while the numbers say bullshit. Maybe a yellow helicopter is in order again.

    Hate to break it to you but they’re buying in Abbotsford instead. No ferry, no hassle, airport right there.

    Summer Slump: Metro Vancouver house sales plummet after offshore tax introduced

    “Home sales dropped in Metro Vancouver by up to 86 per cent after the introduction of the foreign investor tax on Aug. 2, according to official MLS data only available to realtors.”

    “It is a different story in Abbotsford, which borders Metro Vancouver but is not subject to the new tax. Forty-five detached homes were sold in Abbotsford the first half of this month, one more than the 44 sold in Vancouver and West Vancouver combined, and down only 19 per cent from the first half of August in 2015.”

    “Meanwhile, with Metro Vancouver buyers now demanding discounts in a slowing market and offshore buyers either leaving or making lowball bids”

    http://vancouversun.com/news/local-news/summer-slump-metro-vancouver-house-sales-plummet-after-offshore-tax-introduced

  168. Sewage treatment not going in at Clover Point.

    Willows – if English, not a problem. Willows is our French catchment (we’re just over the border in Victoria so it’s not just Oak Bay) and our kid couldn’t get in last year for Kindy but got in off the waitlist for French for this year. French is difficult no matter where you are.

  169. Gwac, if the sewage plant is built at Clover Point it would be nice to build a water slide park over top of the plant. Like the water parks at Cultus Lake. There could even be a man made beach with trucked in white sand and ocean views. If it were awesome I would pay $50 to $100 for the family to enjoy a day there. We might even be able to pay for the sewage plant.

  170. “Totoro is correct regarding Willows. Any student can apply to any school outside of their catchment.”

    Except that Willows is apparently full from within the catchment right now. Someone told me recently that some kids who live within the catchment have actually had to be sent to schools outside the catchment because there’s no room at Willows. So getting into Willows from outside OB is pretty much impossible.

  171. Well we know where Michael lives. Its only people from there who think others are envious. 🙂 I say bulldoze south Oakbay and make it a water park with slides and so on.

  172. Holy Oak Bay envy!
    South Oak Bay is mostly high bedrock btw (low earthquake risk).

    http://www.timescolonist.com/business/vancouver-spillover-makes-island-next-hot-real-estate-spot-report-1.2330496

    Higher sales are expected through 2018 because of higher employment, especially in Victoria, where there is strong tourism, population growth and waves of property owners from Vancouver cashing out to buy here.

    They’re calling for 5% price growth for Vic 2017. I’d say that’s in the ball park. It won’t be anything like this year.

  173. Triple A. A lot of Fairfield I read somewhere the ground will liquify during an earthquake. A lot reclaimed land was in the story. Scary what would happen to some area with a 7 plus

  174. Conversations that involve Oak Bay being the best place to live in Victoria are no different than Victoria the best place in BC or Canada. It’s a matter of opinion. The biggest problem with a decent home for sale in Oak Bay is the lack of subjects that one will be able to put on a house for Due Diligence.
    A large majority of Oak Bay lives on Clay (https://goo.gl/images/2WNjJa).
    The foundations are saturated by moisture and are the homes most at risk of structural failure during an earthquake. Clay amplifies the shaking effect. May never happen but when it does, we’re all going to shift 10 feet down, and 100 feet to the West.
    (http://www.newyorker.com/magazine/2015/07/20/the-really-big-one)

    Totoro is correct regarding Willows. Any student can apply to any school outside of their catchment. Christy Clark changed those rules in ’02.

  175. Oak Bay used to be the place to live 20 years ago, but there are so many better options for people today in Greater Victoria.

    Of the 42 house sales this month over a million dollars only 5 were in located in Oak Bay. None of the top ten prices paid for houses this month were in Oak Bay. Oak Bay is well past her prime. And that’s normal for most cities that refuse to accept that we are in a new age and not stuck in 1915.

    https://youtu.be/3m-3SgRKnB0

  176. “People who can afford South Oak Bay, prefer south Oak Bay.”

    There are actually a lot of people that can afford multiple homes in South Oak Bay but don’t live there – because there are other places with better views of the gulf islands and/or mountains. It’s also so cut off from the rest of Oak Bay and Victoria, it’s not as convenient for people that have to travel for business. (I also know people that moved out of Kerrisdale for the views in North Van)

    Anyway, it’s an exercise in futility to either pump up or put down other neighbourhoods. Some people want new construction because that makes them feel good. Some people want an old 30s/40s/50s house in a walkable location.

  177. I think it would be better for all involved if a wall was built around South Oakbay to keep the riff raff out from the special people. They really only should interact with their own kind. :). The riff raff should pay for it!!!!!

  178. I like this quote from Will Smith (or is it Dave Ramsey?):

    “Too many people are buying things they can’t afford, with money that they don’t have… to impress people that they don’t like”

  179. LeoM.

    That was a joke right. Must be or April fools in Aug.

    South Oakbay has class. OMG I cannot stop laughing at that one.

  180. South Oak Bay is unbeatable. It’s the Kerrisdale or Point Grey of metro Victoria. That’s why prices are higher. Walking, schools, the Village, beaches, friendly cops, no tent city, library, beautiful tree lined streets and sensible municipal governance. It’s attributes are endless for discerning purchasers.

    Young, middle-aged, senior, elderly. It’s a great neighbourhood for everyone. And that’s why it’s sought-after by all age groups, all demographics. People who can afford South Oak Bay, prefer south Oak Bay.

    Fairfield is nice too, but it’s in Victoria and it does not compare to South Oak Bay. Fairfield houses look old and run-down by comparison. Fairfield has Dallas Road, Beacon Hill Park, proximity to downtown, and the Cook Street Village. But Fairfield also has things like tent-city residents camping in the parks and on the beaches, prowlers at night checking your car for spare change, thousands of basement suites and backyard cottages causing congestion, AND Fairfield may soon have a giant sewage processing plant at Clover Point.

    South Oak Bay has class. And real estate is the ultimate defining class act. Anyone working 9 to 5 can afford a BMW, but only a small segment of society can afford to buy a house in South Oak Bay.

  181. Any kid from anywhere can register at Willows or any other public elementary. Kids in catchment just get priority if there is a shortage of space. Lots of kids from out of catchment went to Willows – not just French Immersion. In many cases you will be out of catchment to the nearest elementary school.

  182. Central 1 CU is forecasting 7% growth in Victoria sales volume next year. Kind of hard to imagine given the slowing that we’re seeing and the record highs we saw earlier this year. Clearly Cental 1 isn’t following this blog

  183. “You don’t have to live in Oak Bay to send your kids to Glenlyon”

    And you don’t have to live there to get into the ever popular Willows. Poor, ragged-clothed Oaklands kids enrolled in early French immersion are routed through the willows-oak bay high catchment.

  184. oak bay is valuable because it’s valuable. Same reason why Vic west isn’t valuable. They both have similar amenities and equally shoddy homes. If you like crack move to Vic west. If you like your coke powdered pick oak bay.

  185. Interesting examples of price reductions in Vancouver from Steve Saretsky.

    You’re Only as Good as your Last Sale

    “So what does this all mean? With the market slowing and the announcement of the tax we are starting to see some serious price reductions. And as a seller you’re only as good as the last comparable in the neighbourhood. So once your neighbour reduces his price and sells low it sets a new precedent in the area. This then starts a domino effect.”

    http://www.vancitycondoguide.com/youre-only-as-good-as-your-last-sale/

  186. I really love Oak Bay. My grandparents lived here so I view it with some nostalgia. It wasn’t my first choice for a house, Fairfield was, but we found something we could afford in OB first.

    Willows was a good school – I went there as a kid for a couple of years and it was nice to send my kids there too. No complaints.

    The thing that has really sold me over and over again about OB is walkability and charm plus safety. And the property tax rates are lower than Victoria.

    I think you can make happy memories anywhere, but it was worth the price of admission for us – and the money invested has had a higher ROI than some other areas have experienced.

    If I was just starting out and could not afford a house in OB I’d just move on to realistic alternatives. So what.

  187. If my kid was a “dumb hammer” I would think about ponying up and sending them to Glenlyon. A real benefit of smaller classes and more attention to keep the educational averages up for a not so naturally bright kid. I’m sure they would never market it that way though…
    Otherwise, I agree it doesn’t matter if your kid goes thee or somewhere else.

  188. Vic&Van, sure, if you want one of those things in isolation (either proximity to downtown or uni or water), then all those neighbourhoods are great. If the or’s are changed to and’s (ie., where all those circles converge), then the one neighbourhood that meets all the criteria is Oak Bay.

    True – Oak Bay has some old houses & small lots, but it also has updated ones & large lots – no different than any other area. (the prices in every neighbourhood are crazy now)

    Some people are willing to pay for the older houses because they like the location. Not much “status symbol” in living in an old not-updated house – just the lifestyle.

  189. You don’t have to live in Oak Bay to send your kids to Glenlyon. Glenlyon will take anyone’s money they aren’t picky about where you live.

    And that’s the thing about Glenlyon, they know they can get you to pay more because you perceive it as status symbol. It won’t help your kid get into any better post secondary school. If your kid’s dumb as a hammer, he’s just a dumb hammer that goes to Glenlyon.

  190. “I just want the bowling alley back.”

    Is there anything actually going on there ? Most over hyped potential project ever. Superstore then something else, then something else. Lots of billions of good intentions in 2007 and a year later those intentions were holes in the ground.

    Oak Bay is an over priced status symbol. Some nice pocket areas but for all the taxes they pay the roads are in the shittiest condition since they put gas lines in back in the 90’s.

  191. Leo S totally agree.

    From a Sour grapes person. Small lots and problem houses. When
    I moved here I was told you have to live on this side of the highway and preferable Oakbay. Started my search there and just did not want to be so close to my neighbours and dealing with a home that had newspaper or straw for insulation. Kept my search on this side of the tracks and found something with a big lot, 80s house and amenities and ocean close by. Oakbay address will always be more even if it is across the street from a Victoria house. Just because of the I live in Oakbay and I send my kids to glenlyon people.

  192. Oak bay certainly has a great location. But we never considered it because the housing supply is so miserable. Either you get heritage shack or you get a 50s box with plaster walls and oak floors with polished up nail holes from where the carpet was nailed down.
    Oak bay with better housing, now that would be something.

  193. I do not know if proximity to the city, water, schools and university explains the pricing in Oak Bay.

    South Oak Bay I think is the most expensive neighbourhood in OB by square foot of house and property. Uplands is the most expensive in an absolute sense but the homes and properties are so much larger.

    However, South Oak Bay is rather far from Downtown and quite far from the University. Yes, it is close to the water but then so are so many other neighbourhoods.

    If one wants to be close to Downtown, the winning neighbourhoods would be James Bay, Fairfield, Rockland, North Park.

    If one wants to be close to UVic, then Gordon Head, Arbutus and Cadboro Bay would be the winners. Henderson would be up there, too.

    If one wants to be close to the most prestigious high school in town, SMU, then one should be in the Mount Tolmie and Camosun neighbourhoods.

  194. Limit foreign ownership to 1 single family housing unit and full capital gains tax.
    Incentivise foreign capital to invest in purpose built rental accommodation with open investment, tax breaks, expedited zoning, green rebates, etc.
    Ensure CRA has the funding and directive to significantly increase investigations

  195. “Spin is driving buying behavior” – well said Bitterbear.

    ” Will Canadians for ever put up with a perpetual Ponzi economy that punishes young adults most”
    – Agree.

    Us older folks have benefited, but what’s the point if the standard of living falls for everyone else. I don’t want to live in a society where your average person can’t buy a place to live simply because homes have turned into commodities.

    Just an anecdote: I’ve noticed something in the types of houses that I’ve been tracking – the ones that would have been snapped up by flippers or developers are sitting longer, not sold immediately like they used to.

    For the question, “why is OB priced higher” – it’s very simple – it’s the old RE adage Location Location Location, ie., “lifestyle.” In any city anywhere on Earth, properties within walking distance of the ocean & 5-10 minutes drive from downtown, and close to universities & colleges, is at a premium. If you generalize and say everyone does it for the “snooty address”, then honestly it just sounds like sour grapes – veiled put-downs to make oneself feel better.

    Let’s just be happy for whatever turns your crank – whether it’s near the ocean or with a view or in a posh new-build in Langford. Victoria is lucky to have great places everywhere. Some places in Hillside/Mayfair/Oaklands have beautiful views, VicWest & Esquimalt have nice sunsets, etc.

  196. It just irks me to know that when the wheels fall off the cart the taxpayer is going to pay the bills while the irresponsible lenders are bailed out.

    Maybe not. To their credit the government is working hard (and has been for 8 years) to tighten up lending requirements and fiscal backstops to ensure that the banks don’t require a bailout when the party is over.

  197. Well CS that’s the game they will have to play. Buy a house and spend every buck servicing the debt and maintaining the home. Then use the credit cards to live on until you consolidate the debt using the increased equity on the home. This has been working in some cities for the last decade and the extent is only go to show up when prices correct and home owners can no longer consolidate the credit card debt.

    It just irks me to know that when the wheels fall off the cart the taxpayer is going to pay the bills while the irresponsible lenders are bailed out.

  198. Interesting map, Chris. Reminds me of when we planned on moving to Toronto in 1986. House prices were on a crazy roll. Inventory was almost non-existent, and most of the houses that were for sale looked as though they were occupied by the kind of people who couldn’t possibly afford to buy a house for the kind of money their house was priced at.

    Still if interest rates go negative, who’s to say prices cannot still sky-rocket!

    But think about this. The house I mentioned in the 4700 block W 2nd Ave, appreciated 62 times in 45 years, that’s equivalent to a 500,000% increase per century. Does that sound like hyper-inflation?

    I don’t think things can go on as they have. In the short-run perhaps, but in the long-run, the trend for a huge and increasing proportion of income to be devoted to the payment of rent, either to landlords, or as interest on mortgages to banks, cannot continue. More capital has to go into productive sectors of the economy, which generate real wealth, as opposed to capital gains on real estate which are in reality generational wealth transfers, not the creation of new wealth.

    Of course I’m not complaining. Our house has appreciated about four times faster than wages, so should it be sold — by my estate I suppose — it will reap a windfall for someone of around a million dollars (if I die soon, much more perhaps if I die later) at the expense of the poor folks who will have to pay the mortgage on that amount.

    Does that sound reasonable and fair? Will Canadians for ever put up with a perpetual Ponzi economy that punishes young adults most, i.e., you folks entering the RE market now?

  199. “Another day, another 72 million added to the billions over the next 5 years.”

    There is only so much retail loose spending money to go around this town. Taking away all the outside parking for a parkade with only two entrances and exits will be a disaster. Uptown has already proved that.

    Talking up “billions” are only good if they are proven to be built, not intended. With not enough construction workers many will get cancelled or financing pulled during the next recession as early as next year.

  200. Willows elementary school seems to be a fairly big motivator to live in OB for people I know with kids. They all seem to think that Willows is the best and that their children must go there.

  201. JJ

    500k more for an old house and small lot. I guess like u said it worth it to say I live in Oakbay. I do not even turn my head anymore as I role my eyes as people tell me all excitedly. Guy I know has spent so much dealing with old house problems and strata issues from the lot being carved up way back when. 4 houses on a lot that has no business with more than 2.

  202. “Question is, how long can house-crazy vancouverites sit and watch prices drop before they start to jump in again?”

    If classic bubble popping trends stay true to form, there could be a slight pop as the denial stage turns into the bull trap stage where everything is sunshine again, only to have the trap door drop wide open.

    You’d have to have balls of steel to gamble on a rebound in Van based on history, or a pile of dirty money you don’t care about losing on.

  203. I’ve always thought that you don’t have to sell right away. There will be lots of warning in the event of a significant correction. You just have to know what to be watching for.

    Almost everyone watches price. But that’s too late. By the time you know it’s raining it could be a flood.

    But nothing I’m monitoring is screaming SELL, SELL, SELL.

    If you have several rental properties you might want to think of an orderly liquidation so that you don’t have to sell most of them in the same tax year.

  204. gwac, it’s important to enough people to have the status of an Oak Bay address to have some pay a premium over that of other areas. How much of a premium is up for debate?

    The median asking price in Oak Bay today is $1,595,000

    In Fairfield and James Bay it’s $1,200,000.
    In Camosun, Cadboro Bay and Gordon Head it’s $1,025,000

  205. I really do not get I have to live in Oakbay mentality. I just do not find it that attractive an area. Just me since it seems a lot of people will do anything to get into that hood.

  206. Is it fair to say that the Vancouver market is characterized by foreign buyer froth on a speculative aneurysm on a househoarder’s bubble on a low interest rate bulge?

    China is flattening the froth and the vacant home tax is clamping the aneurysm. Mortgage rules are squeezing the bubble and long bonds are pressing on the bulge.

    What part of this would make anyone think that prices in Van are just as likely to go up?

    Well, maybe that fact that the tail is wagging the dog. Spin is driving buying behavior. the real estate industry, banks and government are manipulating the market in the direction that benefits them by feeding the unwitting public whatever pablum will make them do what they want. It’s a brave new world.

  207. At this point I haven’t seen any spill over from Vancouver -good or bad in our prices.

    While the number of sales are down in Oak Bay, as in West Vancouver, the number of house sales over $1,250,000 in the core has not changed from this same time last August to this year.

    Oak Bay prices are just too high and people are shopping to get the best house for their money and finding them in the adjoining hoods of Victoria and Saanich East. That means there will be more “For Sale” signs in Oak Bay and the homes will be listed for longer.

    And this is one way for listings to begin to build as we cycle through our historical boom-bust real estate market.

    When prices start to noticeably decline most will look back at the sales and say that our market peaked in April because that’s when the market started to “cool” down. In fact I’m hearing that about Vancouver already. That Vancouver was cooling down before the foreign purchase tax was implemented.

    The indicator that I’m focused on these days is market exposure. The days-on-market and how that may start to rise. We were as low as 9 days at the peak. Today we are at a median exposure of 11 days. That’s very low but when it gets over 17 days then the “hotness” in the market is over and we are going to see a substantial drop in bidding wars. And that might be an event necessary to start a market correction.

    Right now though our hot market is defined by an ultra low market exposure of 11 days. Unlike other hot markets that also had rising prices and rising sale volumes.

  208. No Ash, it’s more like a momentum stock. Going up because it’s going up… Once it changes direction it can gain steam fast the other way. Thing is, for people to dive back in they need to sell their house. People are millionaires in Van through working. It’s their home equity. So, you gotta sell quick before you lose more. The more it drops and the more people pile on, the more it drops, the more people pile on…. Just like on the way up…. Then as it drops the banks get edgy and start to restrict credit so there are less buyers etc etc….

    IMO Van is exactly on the edge of this. They have plenty of room to drop and still be outrageously expensive….

  209. Re: “now is the best time to buy van real estate in years”.
    As much as I think Van prices need a kick in the pants, I think it’s just as likely that those realtors are right – that the post tax pause/freeze may give people an opportunity to shop around and low-ball exclusive hoods before things inevitably tighten up again. Like how everyone panicked and sold after the brexit vote and then before you know it prices were setting records. Question is, how long can house-crazy vancouverites sit and watch prices drop before they start to jump in again?

  210. What happens when the suite isn’t enough anymore?

    Suite and 3 bedrooms on AirBnB. And all those people thinking they are buying a detached house will be worse off than those buying a real apartment.

  211. @ Hawk

    for $189K I hope you bought some Uplands waterfront. That would have been in that ballpark with Oak Bay bungalows going for $30 to 40K range back then.

    Actually, we bought after the rise, maybe ’74, when an OB bung cost about $60 or $70K, which is what we paid, the place having appreciated about 16-fold since then. We look at some Uplands bungalows in the $120 K range but opted for a cash purchase free of debt (almost, we borrowed $10 K from the bank and paid it off in 6 months). So much for the wisdom of living within one’s means. Although, today, such wisdom might pay off. Pretty certainly, anyhow, the next 45 years will be very different from the last.

  212. If there is a significant downturn, it will be felt the hardest and the longest by those cities that had heavy real estate speculation and where families are stretched to make house payments.

    A downturn has the potential of wiping out a lot of wealth, creating a lot of unemployment and causing the government to raise taxes to pay for those out of work. How many years did it take Vancouver to dig itself out of the 1980’s market correction? And that was an almost insignificant correction compared to the possibility of todays.

    And how are the banks and CMHC going to pay for all of these losses through foreclosure? Higher bank rates and fees along with higher taxes.

    There is a chance that Victoria won’t be hit as hard as Vancouver. But it’s still going to hurt a lot of people. It’s like to guys getting hit by a bus. One has two broken legs and two broken arms and the other has two broken legs and one broken arm. Which one is the lucky one?

  213. In the core:

    New built living space will get smaller.
    SFH ownership will eventually be limited to those with really high incomes or lots of cash.
    Families in the middle income bracket will be pushed further out.
    Some people will choose to rent rather than buy to live closer in.

    Basically more of what is happening now.

  214. Looking around the city Totoro, I think almost everyone does have a suite now.

    What happens when the suite isn’t enough anymore?

  215. gwac, this isn’t the lowest the active listings have been for houses in the core. In 2006, 2007 and 2008 the number of active listings were lower for the months of June and July. And every indication is that this will hold true for August. We have had lower number of active listings in the core than this year.

    As for New Listing we are about the same as most of the previous decade.

    What is different this year than any other year is the steep rate of decline in both sales and dollar volumes. And it seems like that is going to slightly lower the median price this month. The average might increase because of properties like Hopesmore but it isn’t likely that the average will reach the same as the peak back in April/May.

    As for the months of inventory for houses in the core it has been increasing too,

    Month Months of Inventory
    Jan 2.84
    Feb 1.66
    Mar 1.31
    Apr 1.06
    May 1.09
    Jun 1.26
    Jul 1.86
    Aug 2.45

    The only factor that has yet to change is the days on market. And that is the only reason why people are calling this a hot market. And as I’ve said before that has been manipulated by agents using differed offers/blind auctions.

    And Michael, is that a graph of Portland Oregon? Really, you think I’m scarring people into selling and you trot out garbage like that.

  216. Leo S, I bet the Masserati dealership is feeling some pain this month.

    CS, for $189K I hope you bought some Uplands waterfront. That would have been in that ballpark with Oak Bay bungalows going for $30 to 40K range back then.

  217. Financing makes our home purchases possible. I don’t think that will change.

    I do think that affordability will be impacted over the long term like has happened in much of Europe and is already happening in Victoria. Welcome to the future of needing a suite – wasn’t like that for our parents. Low interest rates can’t always compensate for appreciation at greater than CPI rates.

    during the last 45 years, Vancouver house prices have escalated something like 60-fold

    Yep, just like TO and Hawaii, Boston and San Francisco and LA. Completely unlike PEI, New Brunswick and the rust belt in the USA where the 2008 crash is still playing out.

    RE markets are really really different across Canada and the US. The highly desirable places keep appreciating (and recover from crashes -or natural disasters for that matter – much more quickly) and some of he less desirable places will be flat have great rental income rather than appreciation potential.

    I don’t have a crystal ball but my best guess is there will be a downturn, and then an upturn higher than now, and the ROI from appreciation in our market will exceed many other markets long-term due to desirability – just look at past performance. The key is being able to hold through all markets and understanding how leverage is working in your favour.

    A good buying decision is contingent on personal affordability and readiness to weather the cycle rather than market timing imo.

  218. @ Totoro

    …I don’t see the psychology shifting permanently in my lifetime. There will be up and down cycles, but home will be a priority purchase for the majority and financing will make this possible.

    Well financing may make it possible. Or it may not.

    When we were in Vancouver in the early 70’s we had a joint income of around $65,000 and we considered a house in the 4700 block of West 2nd Avenue, which was priced at, I think it was $189,000. We had a down payment of $50 K and the mortgage rate then was 10 0r 12 percent, so our cost of finance would have been a manageable $14 to $16.8 K. However, an opportunity came up in Victoria, which seemed a nice place to raise a family and where houses were much cheaper than Vancouver, so we passed up half an acre on W 2nd and lived happily ever after here in Victoria.

    Today, the assessment on that house in Point Gray is $11.7 million, or 62 times what we’d have paid for it.

    From this more or less random observation it appears that :

    — during the last 45 years, Vancouver house prices have escalated something like 60-fold.

    — of this increase, something like a four-fold rise can be attributed to increased incomes, and another four-fold rise can be attributed to lower mortgage rates, but the remaining almost four-fold rise (for a total 60-fold increase) appears attributable to a real increase in the cost of Point Grey housing.

    It may be assumed that since a rise in interest rates would create havoc for most Western economies it won’t happen. But what if nobody wants to buy negative real (or even nominal) interest rate government bonds? Could not this or other market forces drive interest rates up whatever may be the wishes of the Bank of Canada?

    And what if, I dunno, all kinds of things. It seems to me that the assumption that “financing will make possible” the purchase of houses at ever increasingly insane prices relative to peoples’ incomes is at least open to question.

  219. Great post Bitterbear. The psychology lesson the last 6 months will be one for the history books. Friends of mine that have been on the hunt for a long time now and priced out of their affordability range have been pressured from work colleagues as they boast about their latest reno and HGTV project. They want to be “them” so badly.

    It’s painful watching them swing back and forth from buyers to saying they won’t buy til next year then they are out looking again. It’s all pure emotion and FOMO.

  220. “”We’re hooped even if there’s no change in employment,” he said. “Clearly our prices have nothing to do with local economic fundamentals. They’re driven by intergenerational transfers and foreigners and migration within Canada.”

    “I wouldn’t worry about unemployment. If we’re going to have to worry about local economic activity to support these prices, we’re in trouble anyway.”

    Pavlov says the Canadian economy as a whole is more dependent than even the U.S. economy was prior to the financial crisis. That means if real estate prices tank, it could take many jobs with it.

    http://www.cbc.ca/news/canada/british-columbia/real-estate-unemployment-1.3733093

  221. Apr $508,388,086
    May $477,012,988
    Jun $416,540,692
    Jul $321,465,725
    Aug $213,351,407 for house sales in the core, western communities and peninsula so far this month.

    And this is what the media and some of the Bulls are calling a “hot” market. The hot market peaked way back in April.”

    Funny how the testy bulls poo poo $300 million like it’s no big deal. Real “red hot” markets don’t have a seasonality, they stay hot all summer, just like the stock markets have been doing by breaking tradition and setting new highs. That’s a pile of lost agent income on the T4 slip as well as in the government coffers for transfer tax.

  222. A seasonal slowdown is normal. That seasonal slowdown happening earlier this year, or slowing down faster is worth remarking upon.
    However I could think of at least 2 reasons why that might be happening:
    1. The market was much more active. Record sales means it had further to fall to more normal levels.
    2. Lack of inventory. We might just be at the level where inventory is restricting sales because there just isn’t enough selection to satisfy all the house hunters. MOI has been bouncing around 2 for a while now and it seems that is about the hottest that the market gets in Victoria.

  223. A pet theory? Obviously you’ve only worked in government. And have no idea of what a balance sheet or an income and expense statements means.

    Say no more. You are only reinforcing the point.

  224. Its how fast our dollar volumes are falling that is spooky… The hot market peaked way back in April.

    Every year is seasonally “spooky” in almost every city. That won’t stop his 6+ years and counting, and thousands upon thousands of comments trying to spook owners into selling.

  225. JJ

    It continues. Here is some numbers 3 7 12 200 34
    There as good as your monthly numbers. Show the % up or down from the same month last year. Let’s
    See those. You cannot make any call on numbers from one month to the next and especially now when inventory is the lowest it has ver been.

  226. Gwac, comparing two different markets isn’t reliable. That’s just picking two arbitrary time periods. What you want to see is the month to month trend over the last 6 months. What happened last year isn’t going to help you this year.

    For example last August the median price for a house in the core was $659,000 and this month it is going to be around $730,000. That’s a $71,000 difference or 10.8 percent increase. It only tells you the difference between two time periods. Not what has been happening for the last six months.

    It’s knowing when to look at a balance sheet or when to look at the income statement. I’m looking at the income statement.

  227. A pet theory? Obviously you’ve only worked in government. And have no idea of what a balance sheet or an income and expense statements means.

    Imagine these as gross revenue numbers in any business. Sure we have cyclical ups and downs in the market but never in the last decade have sales dropped so quickly. This drop in sales translates into lay-offs and fewer commission checks from real estate agents to the sales of washing machines.

  228. And you want to know the strange thing why our prices in the core have been flat for so long and not falling. It’s the western communities, that’s the engine that has been driving our economy. But these last two months have seen an increasing fall in dollar volumes there too.

    Month Sales, $ Volume
    Jan $40,379,840
    Feb $59,517,911
    Mar $83,260,391
    Apr $116,126,469
    May $107,443,443
    Jun $111,311,790
    Jul $95,786,425
    Aug $54,525,422 so far this month.

  229. JJ is good when he sticks to the reliable data points. All gets a little cray cray when he’s got a pet theory he is trying to prove.

  230. I think your analyses is pretty accurate Bitterbear, but I don’t see the psychology shifting permanently in my lifetime. There will be up and down cycles, but home will be a priority purchase for the majority and financing will make this possible.

    I found thee story about the millennial couple in TO who chose to invest and rent rather than buy quite interesting though: http://www.cbc.ca/news/business/house-investment-wealth-1.3716641 (sorry if this is a repost)

    No denying that homeowners in Victoria have done very well recently. Hard to argue against it – until the market shifts again (insert Marko exclamation point).

  231. JJ

    Month over month mean SFA. Compare them to last years months to get a real picture You should know that. There is seasonality in real estate. People buy in the spring and vacation in the summer. There is
    Also no inventory and that is impacting the market sales . Weird that you do this when you know this shit.

  232. Its how fast our dollar volumes are falling that is spooky.

    Month Sales, $ Volume
    Jan $154,821,070
    Feb $272,591,368
    Mar $408,276,034
    Apr $508,388,086
    May $477,012,988
    Jun $416,540,692
    Jul $321,465,725
    Aug $213,351,407 for house sales in the core, western communities and peninsula so far this month.

    And this is what the media and some of the Bulls are calling a “hot” market. The hot market peaked way back in April.

  233. Thanks for the thoughtful analysis, Bitterbear.

    I find what’s going on to be very interesting to watch, having some rudimentary knowledge of cycles and manias. It’s very curious to me that collectively we fall into the same traps again and again. The info is out there for anyone to find. How could one spend so much money purely on emotion? I feel like Commander Data from Star Trek trying to understand a joke.

    I guess I falsely presume that buyers are somehow thinking the same way I am in terms of value for dollar, (clearly many are not) and then wondering how they could subsequently make such a choice. For instance – to buy that little Dallas Road house for 1.8 million. If you knocked 1 million off their current asking, I would still laugh at the price and walk.

    Who knows, maybe it’s just me with a warped sense of what constitutes true value, haha!

  234. I have a PhD in Clinical Psychology. I think you need a social psychologist for this one, but here are some comments from the cheap seats.

    Everyone thinks they make rational decisions but few of us do. We are an inherently irrational species and that makes us easily misled by expectations, promises and propaganda.

    The masses are easily manipulated by first setting up an expectation (American dream of ownership, you aren’t a grown up if you rent, renting is for suckers, home ownership is a symbol of success, our parents all owned homes, a place for the family to gather for a Norman Rockwell moment, etc). This has taken a generation or two, so it is firmly entrenched in our psyches.

    Once this expectation is entrenched, it guides our behavior. The want becomes a need and the need becomes a drive. Catastrophic thoughts reign: my kids will be drug addicts if I don’t have a stable home, a home is part of a stable retirement plan, where will I live when I’m old, etc. So along comes the real estate industry to offer them respite by providing a solution: buy a house from a realtor and good things will happen. Don’t buy from a realtor and bad things will happen (Welcome to the biker gang, brother). So the masses rely on the realtors who have a vested interest in pushing up house prices. That’s a recipe for all manner of shenanigans about which we are learning now.

    In times when we can afford these homes, buying a house can be as rational a decision as we are capable of making. And the trust that we place in our real estate agents and banks is probably reasonable. they promise to help us and we pay them for that.

    But when we can’t afford these homes, just kick the propaganda into high gear and let supply and demand do the rest. Fuel the market:: never been a better time to buy, never been a better time to sell, buy now or be priced out, cries of “FORENTER” (like it’s a bad thing), real estate never goes down, interest rates won’t be low forever etc.

    Corner the market on the media for your propaganda so they can’t publish contrarian facts without risking large chunks of advertising revenue: take out full page real estate pages, entire home living sections, Brought to you by Remax, Every home deserves a Trane, etc.But it isn’t just the real estate industry. We are suckered in by banks “Your’re richer than you think” (Anecdote: When the bank says to me “That’s 1500 a month for interest and 1700 a month into SAVINGS” I know I’m being taken), and central banks and CMHC “No bubble, nope, no bubble, move along folks, no bubble to see here” (I know this message is changing now). Governments who now rely on real estate as a large if not largest chunk of GDP steep themselves in confirmatory bias. TV is in on it: Love it or List it, and every self-indulgent segment on why florals and stripes work together, how to change your decor by season etc. Retail: HomeSense, Bed Bath and Beyond, the cult of DYI, “professions” that never existed in our parent’s days like stagers, interior designers, guys whose sole job is measuring the size of rooms. Is it a conspiracy? no. It’s business, it makes money, it takes our money and puts in someone else’s pocket. (Better to be receiving than giving, so let’s all become real estate agents and sell houses to each other.)

    We are all suckers for propaganda. We all make irrational decisions To throw salt in the wounds, the more irrational the decision, the more defensive the decision-maker is, so many home buyers will vigorously justify an irrational purchase with non-sequitur and ad hominem and any number of logical fallacies, misattributions, justifcations and rationalizations. And they’ll enjoy the congress of all the home buyers who back them up. Maybe someone is willing to pay 1.8 million just to be in that club.

    My 2 cents

  235. “Good grief…

    Two Vancouver realtors: Now is the best time in years to buy Vancouver real estate.”

    Jumping on the “throw out the life preservers” mantra like some of the US websites are doing just like in 2005 when they said there is no bubble.

    Hopesmore = better “hopes” he doesn’t tank AKA The Greater Fool/bagholder.

    Oak Bay has had pretty consistently mid 20’s listings daily the past few months. Obviously the intelligent buyers with lots of cash are not buying or the banks are turning down their mortgages due to price gouging.

  236. You have never made sense BearKilla.

    I can’t recall anyone saying that the Victoria market has taken a nosedive into the ground. You’re just making this stuff up. Really some of the people that consider themselves as Bulls are there own worst enemies.

  237. RE Hopesmore Place I thought we were in the middle of a massive slow down in sales and listings here. Since the 15% chinese head tax in Vancouver, Victoria’s market had supposedly taken a supreme nosedive into the ground. We heard from bears that Oak Bay sales had declined by AT LEAST 3 sales in the last week alone. Listings had shot up by a staggering 5 additional homes in the last few weeks as well. Guess not.

  238. There is literally 1/3 the literal/physical number of houses for sale this year compared to last year.

    Is there? We are down about 40% on inventory. Are oak bay SFHs down 66%?

  239. Another mysterious poster appears but with the same argumentative disorder as the previous poster.

  240. “1110 Summit purchased August, 2014 for $525,000.”

    So the owner made $270,000 in 2 years, seemingly without doing anything to the place. Sigh.

    To be fair, it looks like a very nice corner lot up on the hill. But still.

  241. The reason there is less sales in Oak Bay this August compared to last August is:

    This August is not over yet.

    There is literally 1/3 the literal/physical number of houses for sale this year compared to last year.

    There are less actual houses for sale then last August

    No supply

    Less house in derp market fer sale and 1/4 month to go.

    Try to calculate the % of sales to list to get an accurate number on actual % +- before calling a “crash”

    How about leave and come back in Sept once you have actual numbers and ratios.

    Better yet, since we all know jumping on data every few days and calling a crash is a waste of time, spread out reporting monthly at a min, rather then every few hours.

  242. It’s not as outrageous as Hopesmore but 1110 Summit sold for $795,000, following the trend of the other pricey sales in that neighbourhood. Assessed as $552,000 and no renos done that I can see. They initially asked $849,000 and then dropped to $799,000. After 46 DOM, someone paid close to the revised asking price. I’ve said it before, but the price gains in the Hillside and Camosun neighbourhoods have been the most surprising to me this year.

    1110 Summit purchased August, 2014 for $525,000.

  243. How come we didn’t have this constant stream of “Victoria is undervalued” comments on the blog 2011-2014?

    Most owners were too depressed to comment. Now they are exuberant again and want to share the good news.

  244. It’s not as outrageous as Hopesmore but 1110 Summit sold for $795,000, following the trend of the other pricey sales in that neighbourhood. Assessed as $552,000 and no renos done that I can see. They initially asked $849,000 and then dropped to $799,000. After 46 DOM, someone paid close to the revised asking price. I’ve said it before, but the price gains in the Hillside and Camosun neighbourhoods have been the most surprising to me this year.

  245. Good grief…

    Two Vancouver realtors: Now is the best time in years to buy Vancouver real estate.

    “Right now is the best time to make an offer on a Vancouver property in at least the past two years, as there are great ways to take advantage of current uncertainty in the market, according to brothers Adam and Matt Scalena of Scalena Real Estate.

    “The reason for that is that there are fewer offers right now. I just negotiated an offer with subjects at well below list price, which felt strange in the context of the last two years. So really think about what your goals are. If you’re looking to buy and flip in the next two years, I’d maybe say hold off to see what the market is going to do.

    “But if this is for your home, it’s a fantastic time to be testing the market, and by that what we mean is, to be aggressive in your offers. It’s kind of ironic, as it’s been such a sellers’ market, but put yourself in the mind of seller right now. People are getting very nervous and that brings buyers the opportunity.”

    http://www.rew.ca/news/now-is-the-best-time-to-buy-a-vancouver-home-in-at-least-two-years-agents-1.2324084

  246. I did reply to your comment Totoro and then erased it.

    You’re just not worth the cyber script.

  247. @ Just Janice,

    If I had a PhD in clinical pyschology, I still don’t think I could begin to understand how any buyer anywhere could possibly have a motive to make, or see value in, a transaction like that. And yet, some do. It can’t be for shelter, because it’s way overpriced. I don’t see how it could be FOMO, because first time buyers aren’t buying at this price level. It can’t be investment; you’d have to be a right fool to think the rental yield or potential CGs would pay off. It can’t be value for the dollar, because there are far better houses in amazing places out there for much less. What’s left? Someone with vast sums of money that has some kind of sentimental attachment to this house?

    Does it make the buyer feel more “exclusive”, by virtue of an exorbitant price – like thinking cheap wine wrapped in an expensive bottle makes the contents worth more?

  248. This is a bit jaw dropping. 4700 sq ft lot, 1940’s house right at Ogden point – total square footage 2300. $1.8M ask. I’d consider it a comparable to our property – but our lot is significantly larger (nearly 2600 sq ft larger) and we’re not right at street level and have rear road access. Granted, this place seems a bit more updated and is a bit larger (600 sq ft.)…. Place a few doors down (newer duplex) – ask is $2.6M….

    http://www.rew.ca/properties/369171/326-dallas-road-victoria

  249. Given that we are not increasing our mortgage that seems just a bit like inaccurate know-it-all prognostication…

    Assessments are usually raised in tandem across neighbourhoods based on past sales values. The amount you pay is the often same as it is City budget-based – not assessment based. Mil rate gets lowered if assessed value dramatically increases and the budget does not: even if your assessment goes up, your payment may not.

    In any event, I’m not one to complain about paying property taxes. I like my curb and gutters and the sewer line maintained.

  250. As for Oak Bay slowing down. Only 8 house sales so far this month.

    There was 17 house sales last month and 28 house sales in August 2015 in Oak Bay.

    The reason is pretty obvious. The houses in Oak Bay are priced too high. On average the days on market for homes currently listed in Oak Bay is 51 days or nearing 2 months.

    There are more “For Sale” signs and the homes are on the market for longer.

    OakBBH, how could you not notice that?

  251. Well Totoro do you remember the last time someone from BC Assessment inspected your home?

    Now the good thing is BC Assessment will be notified about the new mortgage appearing on your title and will review your assessment. In that way, the assessment will most likely be brought in line with market conditions in your neighborhood.

  252. Michael I am bull but 925k plus at least 200k to make you feel you are not living in the Brady bunch house is not a steal…. Its more like bend over backwards and take it like a man to be able to walk for a double double and Canadian maple and a side of auto parts and maybe a few tiles and than a late night movie at an outdated theatre.

  253. You can’t have this low inventory created distinctly by demand without price increases.

    Agreed. Over or undervalued, hot market conditions create price increases.

  254. Mine was a bank appraisal paid for by the bank and it came in at 50% over bc assessment value. I can only surmise that this is what market is at for some houses now – although Hopesmore seems a bit outrageous as it is not renovated.

    because the purchasers bestfriend owned next door and wanted to live beside them

    I’d pay a premium for that. I tried to buy my grandma’s old house and would have been willing to pay more for it had they been willing to sell. Life’s pretty short not to pay more for emotional connection where it impacts your quality of life on a daily basis. My cousins bought houses in a row on the same street as their mom and visit and have fun together and share meals constantly.

  255. If the buyer is going for a mortgage they will just have to put down a larger down payment.

    People may over pay for a property but bankers don’t over lend.

  256. What 925K… Guess still hot sellers market. Someone must really want that house. I know my buddy’s modest bungalow house in Brentwood sold for over 100k of asking because the purchasers bestfriend owned next door and wanted to live beside them. Emotional purchaser?

    On side note am seeing a few houses that were off /canceled listings back listed as new listings.

  257. God damn. I grew up in that area. More like Hopesbore…I don’t see how this could be construed as anything but outrageous…paying almost a million for a grandma and grandpa rancher with zero suite potential and in need of a full update. More money than brains out there these days.

  258. Not surprised at the price. Victoria is undervalued as hard as it may be to comprehend for locals used to flat to no growth.

    Regarding sales in Oak Bay supposedly slowing down. We have not seen that at all at open houses and people we know that are selling. I think it’s a mix of the new really wealthy that would buy there actually go on vacation and then look for housing after the summer has passed. Expect a bump in sales coming up from what we have seen with higher prices.

    You can’t have this low inventory created distinctly by demand without price increases.

  259. Fifty percent over assessed value – our place was just appraised for 50% over assessed as well. I’d add an exclamation mark but Marko has enough to share.

    [! <-- I moved one from Marko's post to yours - admin]

  260. +309k over assessment. On the higher side however it’s close to amenities.

    Most people may consider this outrageous but I maintain Victoria is still vastly undervalued.

    Cue: Hawk.

  261. So it was maybe never really designed for anything other than an Airbnb rental? I can’t imagine how anyone could live in that long term. It’s basically a dorm room. (Good deal for a short-term stay though!)

  262. Interesting how AirBnB is allowed to function yet Uber is not in BC. Obviously the hotel lobbying group is very weak. I can see legislation coming in at some point. AirBnB is a huge drain on the rental supply thus not only removing available rentals but increasing rates. How many AirBnB owners claim rental income is another issue re: taxes.

  263. @Leo S: $57/night?! That’s hardly as lucrative as I expected a Van Airbnb might be (especially in the summer)…

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