August Monthly Roundup

More months more records.   This time it’s sales (highest August ever) and inventory (lowest August ever) which means of course the months of inventory are also at their lowest point.

Meanwhile the single family price continues to flatline.   As I discussed last month, I don’t believe in price plateaus in hot markets.   With these conditions, prices will increase.  However going into month 6 of not much movement it deserves a second look.

flatspot

To look at what happened last time we had similar market conditions, let’s see about the median prices in the 2000s.

2000sflats

As you can see in both 2005 and 2006 we had extended (6+ month) flat spots as well.  This seemed to happen when the market got a little bit ahead of the underlying trend and was resetting.   Those flat spots ended with jumps in the following spring.

Year over year, price increases are still north of 15% for detached houses and 10% for condos.

Those price changes are starting to be felt in affordability.   The RBC affordability report came out recently and made note of how affordability is rapidly deteriorating in Victoria.   “This level (51.4%) exceeded the long-term average of 43.8% quite significantly, which suggests to us the presence of greater than usual affordability stress.”

affaug

One encouraging sign is that listings are up significantly this August from years past and almost at the high water marks of 2011 and 2008.  If this continues we might be able to avoid the catastrophically low inventory we saw in 2003 when it was close to current levels in August and dropped to just over 1000 by December.

September should see a further drop in sales from August, but there is usually a bump in October.   If traffic on the website is any indication, interest in real estate is starting to pick up again after a summer lull.

Meanwhile the regulatory changes keep piling on.   There is news that the Quebec Immigrant Investor Program where foreign investors could buy citizenship for an interest free loan of $800,000 (are we that hard up for money in Canada?) is being tightened up.  Immigration lawyer Richard Kurland says “Quebec has fixed it.  Now you get rejected if you have BC property, if you have a child attending a BC school … immigrant investor cases are being refused.”  While it might not hit us as much, it could be another nail in the coffin for Vancouver which is finally seeing some moderation from the foreign buyer tax.

What makes me happy as a taxpayer is the ongoing withdrawal of our government from the insured mortgage business.   As seen in the latest bank earnings calls, banks are increasingly carrying uninsured mortgages while being forced to allocate more to reserves and perform stricter stress tests by federal regulators.  Now they just need to reduce the government backing for Genworth and Canada Guaranty (so called private insurers that are actually 90% government backed) and we taxpayers should be close to getting ourselves off the hook.’

In other news, I was interviewed by a guy writing an article about Victoria real estate for a Hong Kong and Singapore magazine.   The mag bills itself as the “go-to-luxury lifestyle guide for high-net-worth readers”.  Now why would they be looking at us?

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183 thoughts on “August Monthly Roundup

  1. The spreadsheet is an excellent idea and I think prospective purchasers should make a list of the physical aspects that they want in a property.

    I use one every day when I am inspecting a property for a mortgage or court. Now it is abbreviated down to half a dozen or so items and the order of which is more or less important will change depending on if the property is in the city or the country.

    Most first time home buyers will define by price such as I’m looking to spend up to $500,000, but seasoned buyers will define by physical aspects about the house and land.

    While your spreadsheet assigned a measure of how that item met your expectations, in my spreadsheet I assign a value for the house size, condition, location, parking, lot size, view… That allows me to take a house and break it down to individual components and compare them to each other. And then you can reliably and reasonably answer questions like which is worth more, another 500 square feet of finished floor area or a lot that is 10 percent larger. It also allows me to measure the loss in value attributed to building a marina that will obstruct your water view so that you may seek compensation.

    I would say it is an excellent idea to list what physical aspects you are looking for in a home and communicate that to your agent rather than screaming around town looking at everything that meets your price.

  2. Lol…..Leo S. you missed the byline under that headline, but I do share your probable head shaking at this article.

    Vancouver is Canada’s first ‘city of millionaires’ says study

    But slowdown in Metro Vancouver’s real estate market could put that millionaire status in jeopardy

    The study was based on real estate values from 2015 and does not include the latest monthly changes in the market, Miron noted.

    “If we used last month’s effects on these neighbourhoods, we might only have one sale, so it becomes very unreliable,” he said. “We always prefer to use one year of data to get these small area estimates.”

    Because metro Vancouver is a small area and maybe, just maybe we could have only 1 sale in a month there. Sheesh.

  3. @SweetHome, agree, tradeoffs are different for each person, and we had to resort to a spreadsheet because we weren’t getting a good feel from any of the houses – lots of bad renos as you pointed out, some were more repairable than others!

  4. Excellent insight from Steve Saretsky. If you were hoping for the foreigners to ramp it back up you can forget it. They’re outta here and on to greener pastures.

    “They say many Chinese investors who are now citizens here are actually selling their homes. Because many of them came through the QIIP and had purchased homes in Vancouver before applying, those homes were not declared in the application process. In light of the recent 15% tax they fear CRA will crack down and come after them for not declaring the home purchase(s) during the application process.”

    http://www.vancitycondoguide.com/foreign-investor-gives-insights-on-new-tax/

  5. @Vicbot – “Before we moved back here, we created a spreadsheet to rate houses & track how fast the “top scores” sold over a 1 year period.”

    Good for you for doing a scoring system, although I think the “feel” of the house goes a long way. It seems you got closer to your “ideal” list than we did, but that’s where individual preferences for trade-offs come in (and likely some FOMO lighting a fire in our case).

    I agree about the lack of “quality” housing, especially if one considers the condition of the house (not on your list directly). I think it has to do with the more desirable areas (i.e. closer to town, UVIC, shopping, ocean) being built at least 35 years ago and much deferred maintenance or bad renos since then. It seems many houses in our price range were either “icky” and in need of immediate work or they have just had cheap renos. (maybe covering up something).

  6. Haultain is the only one you can come up with. If it was common they would have been posted on here. It was a rarity. In the early 80’s there were lots in the 30% to 50% range. Mid 90’s the 20% range was common.

  7. there is no way an average SFH in the core was that much off the peak, or even anything remotely close.

    1711 Haultain sold for $447,500 in 2010, then $300,000 near bottom. That’s more than 30% off (~33%). There would have been many that fell 25-30% within that time period…mainstream simply didn’t know. I would give you another, but I don’t want to get egged.
    It’s tough to document as they have to sell near top & bottom, and hardly anyone buys at bottoms. I know there was a Bear Mtn that sold for ~40% off (witnessed purchase contract), but I’ll agree maybe there weren’t many.

    That reminds me… what was that high-end Metchosin acreage? Can’t remember the name, but didn’t it sell for something like 50+% off what the buyer paid near top?

    Swanwick, that’s it.

  8. Christy Clark calls the foreign tax “a step in the right direction”. I told you this was all about power. Stick a fork in it, this sucka is done like dinner. 😉

  9. 2009 was a recession but it wasn’t a typical recession in that the Canadian government stepped in with bank bail outs and credit policies to stimulate the housing industry. It wasn’t a real recession in that the housing market was not allowed to correct as it did in past recessions. Instead CMHC became bloated with loan guarantees and thereby preventing major price corrections.

    It worked because the policy kept us out of a drawn out economic depression but it also made us a nation of debtors. Some might argue that all the policy did was defer the inevitable. If we were to have a recession such as in 2009, Canadians wouldn’t have the resources to be able to spend our way out of it and the recession would become an economic depression.

    If that were to happen, Michael’s house would be worth a million to him until he had to sell it. And that’s the key “had to sell” Many people during a recession will say “I’d never sell my house for so little” And they would not list their home for sale. But, the real estate market is only made up of a small percentage of home owners and buyers at any time. Maybe 3% of all housing in a city. Only those actively selling and buyer form the real estate market. But in a recession some people have to sell, and they set the market value.

  10. Christy Clark finally admits it’s a bubble. Combined with Marko on TV last week saying the market is showing signs of topping out I would expect some serious pullback in sales this month.

    I smell more action by the Libs coming.

    shane woodford
    ‏@WoodfordCHNL
    @ac_eco @SteveSaretsky Exact quote “This housing bubble is way too hot. Housing is getting far to expensive.”

  11. “Houses on BM never went from a $1,000,000 to $600,000. Very few properties were 25-30% off in 2013. Sure a Langford condo or very specific segments of the market but there is no way an average SFH in the core was that much off the peak, or even anything remotely close.”

    Mike likes to tell tall tales as we know and it’s 30% off in his mind. Slumshacks in “transitional” areas never went up big in the first place and could never go down 30%.

    Just like when he used the GVREB average price chart with his little green arrows all the way up but when the prices tanked $300K the chart is now meaningless and only HPI counts. Hypocrite supreme.

  12. There were lots of examples of property going for 25-30% off in ~2013. I was lucky enough to get one for 32% off its peak assessment value, and there were a couple I missed for even more off than that. Then there were developments outside the core like Bear Mtn that were obliterated (~40% off at bottom).

    Houses on BM never went from a $1,000,000 to $600,000. Very few properties were 25-30% off in 2013. Sure a Langford condo or very specific segments of the market but there is no way an average SFH in the core was that much off the peak, or even anything remotely close.

  13. The market hasn’t had a real correction since the 90’s.

    There were lots of examples of property going for 25-30% off in ~2013. I was lucky enough to get one for 32% off its peak assessment value, and there were a couple I missed for even more off than that. Then there were developments outside the core like Bear Mtn that were obliterated (~40% off at bottom).

    we haven’t had a real recession in BC since the 90’s either.

    2009 was a real recession…there were some crazy deals to be had early that year too, for a brave few.

  14. Sure! These were our factors – we’re on the extreme side of analytical 🙂

    House sq ft (main floor, 2nd floor, & basement separately with main floor weighted higher), land sq ft, lot dimensions & orientation (length > width preferred), year built (40s+ preferred), storeys (we preferred mainly single level living), garden potential (>=50% of yard with sun), view of garden from inside house, view (of city or mountains preferred), 20 min walk distance to a mall or downtown, 20 min walk distance to ocean, easy walking or biking to UVic or Camosun, minimum 400 ft from busy road (front or back yard), minimum 400 ft from B&B or apartment building (front or back yard), proximity to major sports field (not desired due to night lights), basement height (>6’7″ required for storage or future suite), garage or car port (garage preferred), street appeal (low priority if we could fix it with a carpenter), backyard orientation (preferred west, but this factor was weighted lower), and price.

    We also noted “best feature” and “worst feature” in the analysis in case of a tie score. Our scores on each factor were a 0, 1, or 2, depending on upper & lower thresholds that we set.

    We gave up on a few things like the garage (car port instead), walking to downtown, and street appeal. But we fixed street appeal thanks to our carpenter and Photoshop 🙂

  15. But figuring out what will make yuppies, middle-aged families, retirees, and investors buy (or not) property is not a simple matter.

    Affordability seems to be the main one in a market not driven by foreign buying.

  16. Before we moved back here, we created a spreadsheet to rate houses & track how fast the “top scores” sold over a 1 year period.

    Great idea. I’m stealing it. Mind elaborating on what factors you used and how you weighted them into a final score?

  17. “Especially where interest rates are and where the Victoria economy. A lot of cranes up there in the sky.”

    Isn’t that the ultimate sign Gwac, just like 2007 when the local media was orgasming daily about all the cranes, then the articles creeped out asking “what’s with the hole ? “… and all the answers from the developers were “we got these German finance guys coming in…maybe, we’ll get back to you”.

    Escalator up, elevator down, just like what the GVREB chart looks like. Kinda like when the Titanic sank but the band played on. 😉

    https://www.youtube.com/watch?v=-qRDg9WS7fk

  18. Entomologist: “But figuring out what will make yuppies, middle-aged families, retirees, and investors buy (or not) property is not a simple matter. We’re not dealing with bacteria in petri dishes here. People act for all sorts of reasons, just like you and I.”

    Well, let’s see, people can be like ants so: “Repellents cause panic in the nest and it sets off a process called “budding” where the colony will move and split.” Lol. Just for you Entomologist.

    In a normal market people do act for many reasons. In a manipulated market, where real estate brokers have created this fear of Chinese taking over the city of Vancouver and the media picked it up and broadcast it throughout the province, it’s another matter. People are (were) buying because they are (were) afraid that if they wait to buy when they can afford to (realistically) they will be priced out.

    Conversely, when this realtor bogeyman is eliminated due to the new taxation, aaahh…….that’s where the repellant comes in. The media picks up on the crushed sales and price reductions and voila.

    So, what is Victoria’s bogeyman? Let’s see ……… I’ve heard “the Chinese are coming” and “the Vancouver millionaires are coming”. In any event, the message is the same. You had better buy before the outsiders buy.

    Bottom line Entomologist, your average John/Jane Doe make reasonable decisions in normal markets. In these markets they are pressured to act via what they hear/see in the media.

    It’s very unfortunate that we have decided to eat our young.

  19. I’ve seen the power of anecdotes as well – the word on the street can be useful for a sniff of what might happen, at least in the short term.

    It’s like the old saying goes with stocks, “up on rumour, down on fact”.

    From what I’ve seen, stats are useful (eg., spring prices are higher than winter) but they have a real weakness – they don’t reflect “quality of house.” You might have 2 houses built in the 40s – totally different layout, land, & location – the one with the best layout/land/location sells in 1 day, and the other sells in 10 days. (need for renos didn’t matter)

    Before we moved back here, we created a spreadsheet to rate houses & track how fast the “top scores” sold over a 1 year period.

    The ones with our highest scores were selling faster & faster – while the lower scored houses didn’t change. That made us feel more of an urgency than the official stats did. (Also funny that our definitions of “quality” seemed to be popular “want-to-haves”)

    Now there’s a serious lack of “quality” houses for sale in Victoria (which I think affects the official stats) and some early signs of panic with Vancouver realtors.

    Also remember that it was only 5 years ago that people were losing serious money on Bear Mountain. http://househuntvictoria.blogspot.ca/2011/10/bear-mountain-single-family-homes-built.html

  20. JJ

    And we do not have one now. An NDP government is the only thing I fear for our economy. They are very good a destroying economies.

  21. There wasn’t a serious absolute price correction in the 1990s, prices only dropped significantly when you adjusted for inflation.

    The last real price correction would be 30+ years ago.

  22. “The market hasn’t had a real correction since the 90’s.”

    Maybe that should tell you something about fighting a trend. Especially where interest rates are and where the Victoria economy. A lot of cranes up there in the sky.

  23. “I have seen the top called so may times in the Victoria core over the last 8 years using different metrics. Just gets comical now.”

    The market hasn’t had a real correction since the 90’s. Will be interesting to see all the so called pros here laughing when the inevitable ramps up.

  24. Yes, I agree.

    For the past 7 years, since I’ve been paying attention, the anecdotes of people paying over ask (or not), and busy open houses (or empty) have had a much better predictive power than many of these metrics for Victoria. Our market does not appear to be overly driven by fundamentals like price/income, and whatever portion represents retirees, self-employed, foreign investors, cash sales, and other non-traditional RE buyers would justify some of that.

    But when friends say they made the 7th offer this year on a place (all at or over ask), and paid for their 6th inspection out of pocket, and still didn’t get the house, well, that suggests there’s still a ton of pent-up demand out there.

    I’m not saying MOI or regional/national/international factors aren’t important – they clearly are. But figuring out what will make yuppies, middle-aged families, retirees, and investors buy (or not) property is not a simple matter. We’re not dealing with bacteria in petri dishes here. People act for all sorts of reasons, just like you and I.

  25. I have seen the top called so may times in the Victoria core over the last 8 years using different metrics. Just gets comical now. High inventory, low inventory, days on the market, price over or under asking. Price over or under assessment, CMHC, Vancouver market, Garth other so called experts, credit cycle, consumer debt.

    This actually made me lol…..the high/low inventory is the best one.

  26. I have seen the top called so may times in the Victoria core over the last 8 years using different metrics. Just gets comical now. High inventory, low inventory, days on the market, price over or under asking. Price over or under assessment, CMHC, Vancouver market, Garth other so called experts, credit cycle, consumer debt. The core keeps stable or has gone up during this time. The trend is your friend.

  27. GWAC, it also depends on what kind of market we are in too. Low listings happen during a recession as people do not move and stay in their properties for longer. They just don’t list their homes. But a significant amount of those that do list in a recession are made up of foreclosures, divorces, relocation or some other kind of duress circumstance.

  28. @gwac

    I don’t expect a dramatic crash for Victoria but low inventory is always seen at tops. In a bubble scenario, high inventory does not kick in until after significant price drops. Sadly, like rents and incomes, this is yet another metric that has no short-term predictive power if there is mania in the market.

  29. Historically speaking, sale volumes drop in September and new listings rise. That’s what has happened for most of the last decade.

    I don’t think it is unreasonable to expect the same to happen this year.

    Prices may remain the same but anyone looking to buy a home will likely have more selection and more time to make a decision. And I would think this would be good for both buyers and sellers and for agents working with prospective purchasers, that may have found it difficult during the last few months to get an accepted offer.

  30. “All you have to do to make affordable housing is encourage another 1 or 2 percent of existing home owners to sell. That’s a lot less expensive than the government building new homes.”

    Thus the banks and CMHC will have to tighten lending standards, tax the speculators/flippers and forcing the border line buyers who shouldn’t be in there right now to wait it out and create an environment for sellers to realize the price gains are really over with. I believe that is where we are just beginning now.

    Central banks have juiced the markets in a failed experiment and the results are showing with housing over priced everywhere. Corrections/crashes are a necessary event to flush the market excess out, wether you like it or not.

    It’s part of the credit cycle which is nearing it’s end, which bulls are totally blind to the obvious while they call themselves ex-economists and financial advisers. If Trump wins it will happen overnight.

  31. @ Michael

    If Trump wins, we’ll get there quicker than 2020.

    How do you reach that conclusion? Are you saying that higher interest rates will drive RE higher, which is crazy, or are you calling Trump a liar when he says interest rates should be raised?

    “They’re keeping the rates down so that everything else doesn’t go down,” Trump said in response to a reporter’s request to address a potential rate hike by the Federal Reserve in September. “We have a very false economy,” he said.

    “At some point the rates are going to have to change,” Trump, who was campaigning in Ohio on Monday, added. “The only thing that is strong is the artificial stock market,” he said.

    Trump, during the primary campaign, as he took on 16 Republican rivals, had called Yellen’s tenure “highly political” and said the Fed should raise interest rates but would not do so for “political reasons.”

    https://www.yahoo.com/news/trump-says-u-false-economy-interest-rates-must-184133376–business.html

  32. A little anecdotal information about Richmond just to add some spice to the data. Some may recall that my 95 year old father recently sold after some odd behaviour by the buyers:

    …Offered substantially over asking without any other offers although in line with what the neighbourhood was doing.
    …Had a 2nd appraiser show up (without and appt) for additional financing
    …Missed the closing date by a day – deal almost collapsed
    …Tried to cut down trees will my father was still in possession.

    We fully expected the house to be rubble by now and approaching something somewhat similar to the house across the street (that was a spec build and asking around 2.9M but hasn’t moved for about 3 months). Anyway, fear has set in, the house is back on the market (and staged) and they are asking almost exactly what they paid albeit a few “8s” have been thrown in to the price.

    It has also been up twice as long than our fathers listing which lasted about 1.5 weeks.

  33. Sounds like you’re getting worried Gwac. Sales per day has been on the decline for months going back to June’s 39.1. The current after 5 days is 20.5. That’s a 50% ass whuppin.

  34. JJ

    True enough but decreasing supply will eventually raise prices in the SFH core. No way around that. Demand is outpacing supply.

    Certainty will not lead to crash that Hawk keeps calling

  35. GWAC, the active listings is for all types of properties from manufactured homes on leased First Nation’s Land to high rise commercial buildings.

    What’s important to know is if there is a shortage of listings of properties like yours. Saying 2,000 or 5,000 or 11,000 listings has little significance to what might be happening in the market for properties like yours. Knowing the supply of homes is important but so is knowing the demand.

    And that’s where real estate becomes more difficult than manufacturing lawn mowers.

    You can manufacture more lawn mowers but that doesn’t increase the demand. It lowers your cost of production so that you can sell them cheaper. If you build more houses than will stimulate the economy and increase demand and increase prices.

    If you want to have affordable housing then you have to a viable alternative to existing home owners that will increase the supply of re-sale homes. 97 or 98% of the houses in Victoria are not listed for sale. All you have to do to make affordable housing is encourage another 1 or 2 percent of existing home owners to sell. That’s a lot less expensive than the government building new homes.

  36. Net Unconditional Sales: 104 704

    If this rate of sales holds up, sales will be down for the month by approx. 100 or more. Bulls need some more pump. Oh right, it was the holiday. Next week it’s raining too much. 😉

  37. “Yes, probably should be using best economic return on money invested.”

    It sounds like your suggesting that a primary residence qualifying as an investment is conditional on it providing a positive return sometime in the future?

    You can buy stocks and they can fall in value. That doesn’t make them more or less of an investment.

    And yes in your retirement years you can take out a reverse mortgage on your home. But there are limitations to how much you can take out at certain ages as well as deferring your property taxes. When you are borrowing money against your home to pay your bills that isn’t an investment that’s debt consolidation.

  38. You can call most anything an investment.

    Yes, probably should be using best economic return on money invested. Historically a primary residence in Victoria has generally had a better after tax return than other types of rental property for the same amount invested. Even if you never sell it the equity is there if needed later in life and the stats show this is where most Canadians have most of their money.

  39. Tues Sept 6, 2016 – 9:00am:

    Sept Sept
    2016 2015
    Net Unconditional Sales: 104 704
    New Listings: 108 962
    Active Listings: 2,011 3,478

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

  40. You can call most anything an investment. You can invest in your children’s education but you’re never go to sell your children. The same with your principle dwelling it’s an investment that you may never sell.

    Can you say the same for oil stocks or an apartment building? These investments are purchased on their income producing potential and with the anticipation of selling when the price rises. Very little emotional attachment to selling them. You don’t have to hire a moving truck or find another place to live.

    So yes your home is an investment it’s just not in the same class as equities or apartment buildings.

  41. who predicted $1 million median by next year

    lol.. that was million core by 2020.

    But Trump is now leading in some of the polls

    If Trump wins, we’ll get there quicker than 2020.

  42. I was just looking at the different distribution of house sales in the core districts in July and August.

    There was a decline in the number and dollar volume of sales between $800,000 to $1,500,000. But a spike in sales over 1.5 million. So it appears that there was a kind of correction in the market since the Vancouver tax was implemented for most middle to upper income groups except for the ultra high market that had a surge in sales. A few of those dozen or so ultra high end sales were purchased by people from Vancouver and a least one from China possibly trying to escape the tax.

    Maybe Victoria should follow Vancouver and have a tax on foreign ownership?

    What do you think?

  43. My take from this is, and many will disagree is that your principle residence should not be classified as an investment.

    Yes, I hold the opposite opinion.

    Your principle residence is likely the biggest investment you will ever make: make it count. That is where the majority of the wealth of Canadians is located after all.

    You’ll get way better financing terms and income tax treatment on it than “extra properties”. It makes way more sense in an appreciation market to buy high for your primary residence if you can afford it than it does to buy something lower cost and buy an extra property imo.

    Extra properties make more sense in low cost cash flow positive areas — like almost nowhere in BC – unless you can carry them no matter what and hold out for appreciation. An investment property can be a good long-term retirement plan.

  44. @ Michael

    if you understand our economy, credit & currency markets, combined with our retirement & migration patterns, any correction will surely be short-lived.

    i.e., if you don’t agree with Michael that prices are bound to continue rising indefinitely, you don’t know what you are talking about.

    But Trump is now leading in some of the polls and that’s before the debates, so after the US election we may well see changes in the economy, credit and currency markets and in migration patterns in the states that will make any correction to property markets long-lived. And Canada almost certainly will follow the US trend.

  45. “I, for one, would be happy to see a correction at this point. It would be healthy after the run-up we’ve had.”

    That’s funny for someone who predicted $1 million median by next year with charts full of green arrows to infinity. The bulls are flip flopping like flies to turds. 😉

  46. cheerleaders seem to be “happy” to predict more rises

    I, for one, would be happy to see a correction at this point. It would be healthy after the run-up we’ve had. However, if you understand our economy, credit & currency markets, combined with our retirement & migration patterns, any correction will surely be short-lived.

  47. @ Ash
    This blog is full of educated people full of wisdom and of course opinions.
    My take from this is, and many will disagree is that your principle residence should not be classified as an investment.
    If you are buying RE as an investment such as extra properties, then prices fluctuate, highs and lows and essentially it is just dumb luck in terms of your entry point. An old adage passed on over time is that the trend is your friend.
    If you need a roof over your head and place to call your own, buy one that fits your circumstances. No one likes to overpay, but bear in mind the delta in the value might not equate to long term satisfaction/happiness from one’s ownership decision.

    A further interesting note; after visiting a number of different countries in the last 12 months, the divide between a serf and a landowner is as pronounced as Medieval times!

  48. What we need is a rolling predictor poll that allows people to put in bets on the housing market and then keeps track of the results over time.
    I was gonna say it should let you put up money on outcomes but then I’d have to move the server to the Cayman islands.

  49. I’m just saying this blog is full of good information and smart people yet there’s never agreement on whether markets are going up, down or sideways. Only with a bunch of hindsight do we start to gain clarity about what just happened.

  50. Credit cycles eventually run their course every 7 years or so. We are there. As per UBS:

    UBS: We are witnessing the end of the credit cycle, and a crash is coming

    “The era of cheap debt and plentiful liquidity is slowly drawing to an end, according to a team of UBS analysts led by Paul Winter, making it harder to use credit to juice corporate profits.

    As earnings fall, so will investors’ confidence in stocks, leading to either a market crash or a correction, which is a slower and less violent drop in stock prices.”

    http://uk.businessinsider.com/ubs-research-note-on-credit-cycle-and-stock-markets-2016-8

  51. “I dont know, I think it could be awhile before we have much clarity. By spring we’ll know a lot more, but my guess is we still won’t know if we’re near the top or near the bottom.”

    Pardon my french but WTF ? I hope you aren’t an agent in real life Ash. Think 1981 when Bearkilla wasn’t yet a genetic mutation.

  52. “Basically it is too early to know but we will quite shortly.”

    I dont know, I think it could be awhile before we have much clarity. By spring we’ll know a lot more, but my guess is we still won’t know if we’re near the top or near the bottom.

  53. The point is that loser forenting bears continue to be 100% wrong for over 1 decade and counting. Time to reevaluate your loser life bear.

  54. Yes Ash you misunderstood. The article showed you can increase inventory all you want and it won’t stop price rises as long as you have easy credit. The big 5 banks started making changes to that easy access back in the spring.

  55. I am not any sort of expert in real estate much less a bear or a bull. I bought a very comfortable home in Rockland on a half acre, about three years ago, that I paid about $200 a square foot of finished space.
    And, yes it was totally upgraded. My wife plans to bury me under a new rose garden when my time comes. My point is that I dont have a dog in this fight so please keep the comments gentle.

    At least to Fairfield, Oak Bay, James Bay and Rockland it appears to me that the market is principly driven by retirees. The average affluent baby boomer is retiring at age 62. Has any of you figured out where we are in the wave of boomers retiring? I know that the next generation is a lot smaller. If the boomers have peaked then one would expect demand to slowly drop.

    I have noticed two things in addition lately, First, the average age of retirees seems to be a lot younger, especially from Vancouver. Logically it will be quite a while till the houses come on the market again. Secondly, since I go to garage sales on the weekends (my wife tells me the alternative is to go shoe shopping) I have noticed that a lot of people are moving because their rental houses have been sold. If you have had a rental property for a number of years, and considering how low the rents are in comparison to the capital involved then selling this last year was a smart move. I suspect that most rental housing have been sold to retirees and that the inventory of homes, moving forward, is going to be a little slim from this sector..

    My question is whether anyone here has a good grasp of the demographics of retirement buyers? At least for Victoria, forget foreigners the market in much of the core seems to have been driven by the recently retired doctor or banker from outside Victoria. Would those just be considered Canadian foreigners on the Island.

  56. But I think the post from Marko, for example, just adds balance to the theme these days that Van is in free fall. The fact that inventory is low is kind of relevant

    That’s the problem with not having open data in the Vancouver market. The real estate board spins it one way, Ross Kay spins it another, and others spin it differently. Sakersky seems to be presenting it in the most balanced way so far. Sales are some 26% below the 5 year average, and that’s with about a quarter of the sales actually from before the tax. So it very well could be the start of a significant correction. Basically it is too early to know but we will quite shortly.
    It is interesting how inventory can very suddenly flood the market.

  57. “The continuing shortages of housing inventory are driving the price gains. There is no evidence of bubbles popping.”
    – David Lereah, NAR’s chief economist, August 2005

    Not to worry, Ash, Marko was in very good company in regards to real estate board statistics and interpretation.

  58. I don’t think high prices in Van is good for anyone. But I think the post from Marko, for example, just adds balance to the theme these days that Van is in free fall. The fact that inventory is low is kind of relevant – and Hawk, maybe I misunderstood your post but I don’t think that article from Australia is suggesting a market can crash with low inventory. It seems to just catalogue Sydney’s failure to reign in price increases.

  59. What’s strange to me is that the cheerleaders seem to be “happy” to predict more rises in Vancouver prices?

    (I can understand if you’ve just bought a home you don’t want it to lose value – but if you’re in it for 10-15 years, no need to worry)

    Moderate increases of 2% a year are nice, but I don’t cheer at 25% or 50% – because I’m not interested in selling, or pretending I’m smart by ripping people off with cheap flips or rentals at high prices. Guess it’s a sign of the times – as long as you can make a buck on paper personally, to hell with the big picture.

    It’s obviously extremely unhealthy for the Canadian economy & taxpayer when so much of the Vancouver insanity is driven by investors trading homes like stock, “insider trading” on condo pre-sales, or skirting tax laws – all to the disadvantage of your average person wanting to work in the local economy without commuting 2 or 3 hours from their family.

    The article that Marko posted shows what happens when you get a group of international investors thinking they outnumber the locals enough to conduct strata meetings in another language – never mind the language of Canadian business and laws related to real property. (At least they’re now trying to crack down on real estate firms like New Coast Realty)

    I talked to 2 more people the other day about how they’re moving out of Vancouver – one to California, one to Victoria. (No, they’re not moving to Abbotsford or Salmon Arm or Campbell River because they’re not commuting 2 hours or telecommuting)

    Don’t know what this means for Victoria, but there’s still a case that it’s considered more of a job centre than other remote communities, because not everyone in Vancouver is making $3M from selling their home and then retiring.

    But the last thing we need is Victoria to reach insane levels because of the spillover effect from Vancouver (I don’t think it’s well represented in stats because many people rent here before they buy).

  60. Good post oopswediditagain. Delinquencies are on the rise and are inevitable as this market shifts into correction mode.

    Interesting article by Hilliard MacBeth on the banks possibly having to shore up reserves in the future with comparisons to Sweden’s maxed out household debt levels and their banks higher emergency reserves levels. Canada’s debt levels have definitely increased sharply the past two years. No wonder Scotia is paring back.

    “The most important safety buffer against bad loans is capital in the form of common equity.

    The most secure type is called CET1, which stands for Common Equity Tier 1. This is permanent capital that can’t be withdrawn. This capital can be increased by retaining earnings (not paying out dividends or doing share buybacks) and by selling common shares to investors.

    According to Morningstar Research, Nordea has a CET1 ratio of 16.8% of assets and RBC has CET1 of 10.5%.

    Canadian banks hold CET1 around 10-11% which is low by international standards, but seems to be acceptable to Canadian regulators.

    According to Hamilton Capital, in a report on April 27, 2016, the international average is 13.7% and rising. Canadian banks rank 34th out of 35 “major” countries. US banks weigh in at 11.5%.

    While Hamilton Capital says that Canadian banks have adequate capital, the higher levels of CET1 in other countries create a risk that Canadian bank regulators might decide to demand higher levels to avoid falling further behind their global peers.

    The risks for Canadian bank shareholders are smaller dividend increases as earnings are retained to boost capital and lower share prices as additional common shares are issued to shore up capital.”

    http://dir.richardsongmp.com/web/MacBeth.Team/scandinavian-bank-model-for-canada

  61. oops, I have a graph of residential insolvencies by consumer proposals (I think it’s national) from 2010 to 2016 showing a significant dissociation (p=.002211) but can’t get it pasted. It shows that as much as bankruptcies have gone down, consumer proposals have gone up. Yes, more obfuscation and manipulation.

  62. In 2009, the Canadian government reformed the Bankruptcy and Insolvency Act,
    increasing the attractiveness of Division II proposals and increasing the cost of
    bankruptcy. The two key benefits of proposals are filers are able to keep their assets
    and can maintain access to credit markets. Take-up of proposals increased
    by 13% following the change in legislation and has trended upward since. This
    would imply that individuals value the increased access to proposals, in addition
    to disliking the increase in wage garnishment associated with bankruptcy for
    those with high income.

    It is very interesting that bankruptcy stats are always trotted out by politicians, media and real estate shills when they are defending the high consumer debt levels in Canada. Perhaps a review of the Consumer Proposal increases and the legislative changes noted above might engender a little more concern about the road we are travelling.

    The link provides an outlook of 2nd quarter insolvencies in 2016, by Province and illuminates the increasing Consumer Proposals.

    http://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/h_br03630.html#tbl2

    Obfuscation and manipulation

  63. “I for one, would like to sell out of Victoria, and move to the Cowichan Valley, where I don’t have to worry about having neighbours like Bearkilla, Michael, and the Interior Decorator, and even if they are my neighbours, at least there is more than 10 ft between us.”

    Port Hardy would be a safer bet if you want to escape overly precious neighbours

    “Those who autofellate themselves for having bought in Oak Bay or South Fairfield 10 years ago, or who split hairs on the desirability of South Fairfield vs. South Oak Bay vs. Cadboro Bay are a loathsome and insufferable lot in my opinion. My greatest hope is that there are fewer of them wherever I move next.”

    Such hurtful words. Here in south Fairfield we feel a real sense of noblesse oblige towards those poor souls who can’t get into the neighbourhood. You are welcome to visit one of our parks and laugh at the antics of our above average children.

  64. “Hawk

    Good luck. Waiting for a crash in Victoria can get very expensive. As many are finding out.”

    Gwac, I don’t need luck, the facts are slowly painting the picture like 2008 did. Do you understand that banks lend money and are cutting back since last spring when the peak was hit ? Coincidence ? Hardly. The banks know the risks and that the credit cycle is coming to an end and are preparing accordingly.

    Keep following the herd all you like, but if you think a new leg up is coming you must be a buyer right ?

    “In May, following the bank’s second-quarter results, Porter told BNN that soaring home prices in Vancouver were an “aberration” that was neither healthy nor sustainable”

    “We’re very selective about asset quality and quantity and very risk-sensitive about it,” Porter said Tuesday.”

    http://www.bnn.ca/vancouver-foreign-buyers-tax-was-the-right-move-scotiabank-ceo-1.557998

  65. All the bulls and agents theory of more inventory needed is all bunk too. Australia has shown it didn’t work in this article Steve Saretsky posted. Like I’ve always said, it’s all about the easy credit. With our banks beginning to tighten lending this will be the catalyst to end this credit cycle.

    “Homes are unaffordable not because we are building too few but because the market is flooded with cheap credit.”

    http://www.smh.com.au/business/the-economy/the-government-says-it-has-a-plan-to-fix-the-housing-affordability-crisis-this-chart-suggests-it-doesnt-20160902-gr7sbz.html

  66. “The bent up demand in only in the first half.”

    Yep, they’re bent alright GWAC. 😉 Most worn out line in the business.

    The “pent” up demand has been buying earlier this year. Sales are down from the 1200 range to the 800 range. Demand has gone down.

    If it was pent up demand it would still be in the 1200 range or higher and inventory would be even lower. Median topped out, average prices in slight decline, banks cutting back on mortgage lending and preapprovals (ie Scotia) = buyer exhaustion stage setting in.

    Nice to see some folks with some common sense posting.

  67. It appears to me that the HPI is only worth paying attention to when in a full bull market, not when a correction is in motion.

    Now that that the market in Van is showing that a serious correction/crash may be in the making, it’s obvious the HPI is useless and is like trying to turn a freighter when the all the speed boats and sail boats have already turned away from the storm.

    The chart clearly shows that if the average and median continue down the HPI will still be way up for many months later which will leave buyers and sellers without the truth to the real market conditions until it’s far too late.

    Like Ross Kay said in his radio interview yesterday, the real estate industry’s main motive is to keep you buying, not sit on your hands waiting.

    ?w=640&quality=55&strip=all&h=795

  68. The mean is lower in a negatively-skewed distribution, where the mode (hump of the curve) is high, not low.

    Yeah we’re saying the same thing just explained differently. The hump in my case is was in the mid range of the market since a hump in the high range is even less likely.

  69. And for all you Vancouver cheerleaders, you can deny it all you want, but it’s pretty obvious from the available data that the high end of the market has been devastated by the 15 % tax. What happens next, nobody knows, but at least stop deluding yourselves about the current state of the market. Vancouver was a tax haven. Once people figure out how to circumvent the tax, the party can resume! Rejoice in the world class rain!

  70. I for one, would like to sell out of Victoria, and move to the Cowichan Valley, where I don’t have to worry about having neighbours like Bearkilla, Michael, and the Interior Decorator, and even if they are my neighbours, at least there is more than 10 ft between us.

    Those who autofellate themselves for having bought in Oak Bay or South Fairfield 10 years ago, or who split hairs on the desirability of South Fairfield vs. South Oak Bay vs. Cadboro Bay are a loathsome and insufferable lot in my opinion. My greatest hope is that there are fewer of them wherever I move next.

    There are some on this blog, who would have you believe that anyone with a bearish view of real estate must be renting a moldy basement suite. I am a homeowner, and this market makes me feel uneasy. I would like the market to cool down, because I don’t want to buy in a low inventory market and get stuck bidding against some baby boomer with a different vision of aging and a pile of money to burn. I don’t know if that makes me a bear, but I’m not cheerleading this shit.

  71. So a lot of people rather convinced the Vic market is dropping, but with little to no evidence, I think.

    We need one of those polls.
    How many think the 3- month summer median (June-Aug) will be higher in 2017 compared to this year? Lower? The same (+/- 5%)?

    My vote is higher, based on still very hot MOI signal and Leo’s graph showing a seasonal plateau is normal in rising markets.
    Vancouver is another story, but here I suspect it will be more expensive to buy next year.

  72. Re- mean and median.

    Leo – It’s actually the opposite. The mean is lower in a negatively-skewed distribution, where the mode (hump of the curve) is high, not low. Obviously a rare occurrence in real estate, where a long tail to the right is the norm. Would happen only if the low end market collapsed but high end strengthened.

    http://www.statisticshowto.com/skewed-distribution/

  73. Interesting point GWAC, what would you like to see that is different?

    As for the average falling below the median. It has happened, but only in the Gulf Islands and the Malahat in the last ten years when the market was heavily in favor of buyers with more than 10 months of inventory.

    Malahat for the year 2013
    Month Sale Price, Average Sale Price, Median
    Jan $446,572 $403,700
    Feb $453,170 $496,000
    Mar $447,643 $424,700
    Apr $453,211 $470,000
    May $414,880 $400,000
    Jun $497,273 $392,500
    Jul $451,000 $387,500
    Aug $448,131 $418,500
    Sep $338,294 $332,500
    Oct $415,915 $355,000
    Nov $362,211 $340,000
    Dec $427,523 $396,000

  74. I wonder if that is because the distribution has been skewed for most of the last sixty years

    Median less than average is perfectly normal if you think about it. I don’t understand what you mean with skewing.
    House prices can only go so low. Let’s say the average is $750k for detached houses. The cheapest detached houses are around $400k. So a house selling below the average can at most be $350,000 below the average. But a house selling above the average has no real limit. It could sell for $10 million above the average and that one sale is going to have a huge influence.

    So average below the median would only happen if there was essentially zero high end sales and quite a few very very cheap sales with a lot near the middle as well. Just not a typical distribution of sales so you don’t tend to see it in the wild.

    Averages are pretty much useless for gauging price movement.

  75. The posts have not change in 6 or 7 years. You could bring up 2010 and the same bear calls where happening maybe with a different reason. This market in Victoria is only resting before its next leg up. Enjoy bears. The bent up demand in only in the first half.

  76. Thank you Hawk and Just Jack! Everything you write makes sense and is much appreciated! You are making a big service to all the people that care for their hard earned money. As for bulls, does anybody really read what they write?

  77. What’s September’s excuse going to be ?

    September’s repeat-sales index (Teranet) will no doubt show prices went up again, just like August did 🙂

  78. A better measure, he believes, is average price.

    That sheds some light on Ross Kay’s IQ level or his dishonesty.

    I wonder whether he’d tell you prices are falling or rising in the following example?…

    July: 4 houses sell for 1M + 1 house sells for 5M = 1.8M average
    Aug: only 4 houses sell for 1.1M = 1.1M average

  79. “We need inventory to surge before you can call anything.”

    No, all you need is more potential buyers realizing the market is over valued, and nothing but shit for sale like Bearkilla’s slumshack. Sales are in already in decline since the peak in the spring.

    All this seasonal talk is crap. What’s September’s excuse going to be ? Everyone too busy with school ? October will be “it’s raining outside” ? The market has clearly shifted huge, the bulls just don’t get it as usual.

    80% of houses in Van didn’t sell last month. That’s a massive number.

  80. Hawk lol. A 11k dip with the limited sales and litlle available inventory means O. We need inventory to surge before you can call anything.

  81. Going by Ross Kay’s average price theory then Single Family Greater Victoria homes peaked in May at $763,517 and has dropped to $752,509 in August a $11,000 drop which coincides with the sales drop. Looks like a lot of bidding war bagholders in the making. 😉

  82. Ross Kay is getting some traction in the Vancouver Sun. Looks like Mike is wrong once again. Benchmark takes 8 months for declines to show up and the foreigners left months ago with all their cash.

    So much for the “red hot” market the local MSM is paid to report with declining sales in Victoria too for the last 4 months.

    Vancouver real-estate market sending mixed messages

    “But for real estate consultant Ross Kay, figures like benchmark prices and year-on-year sales comparisons obscure what’s truly happening in Vancouver: the rapid deflation of an overvalued market that had been propped up by foreign buyers.

    Take the benchmark price, a statistic that tracks sale prices of “typical” homes picked for things like age of the building, square-footage, number of rooms, and other factors.

    “Your benchmark price trails what is really going on in the market by up to eight months,” said Kay, who is based in Ontario.

    A better measure, he believes, is average price.

    According to the real estate board, the average price for detached houses in Metro peaked in January at $1.83 million, but has since fallen to $1.47 million, a drop of nearly 20 per cent. Across all housing types, average purchase prices have fallen by 26.3 per cent since the first quarter of 2016, according to Kay.

    “(It’s) the greatest single drop in Canadian history,” he said. But, “I don’t like to set off panic either, because I know the damage that is done to poor old average homeowners in these cases.”

    http://vancouversun.com/business/real-estate/mixed-messages-in-vancouver-real-estate

  83. Leo S, I see your point in your graph. I wonder if that is because the distribution has been skewed for most of the last sixty years. I went looking for any instance of median over average and found at chart at voxeu.org/article/home-prices-1870. Hard to make out on the chart but it looks like they have medians over averages. at points up to about 1980 then there is a deviation with means over medians while the market climbed quite noticeably. I’d like to see this chart in a more readable form, so I will see if I can track down the researchers.

    What’s interesting about their Figure 1 is the median and average are basically in sync and vary together around a flat line demonstrating healthy regression to the mean. In a market free of tampering, I would certainly expect the average to vary around the median over time within parameters of slope accounting for inflation, population and income and I don’t know what other reasonable sort of variables. The split between median and mean appears to be a fairly recent phenomenon.

  84. What that means is that you can be neutral and not face the backlash from potential clients if the various board statements don’t reflect reality.

    Everybody remembers the Realtor’s name that steered them wrong and they are not shy about warning people away.

    I would not want to see you lose credibility by getting caught up in a no win battle with the bears. You are cheerleading misleading Vancouver stats and it has absolutely no upside for you.

    People come to me because I save them $ on commissions, not because I give them advice on whether the market is going up or down. I would like to think that my clients aren’t so dumb to think that I can actually predict the market any better than the flip of a coin? If I thought I could do better my name would be Garth Turner.

  85. I wonder if in an upward moving market the average is higher than the median but in a downward moving market the median will be higher than the average

    Not really. Median is always lower. Unless there was a complete collapse of the high end market while the low end went crazy the average wouldn’t be lower than the median.

  86. Keep the pump up Mike,the high end drove the market it up and will drive it back down. Bulls need all the help they can get right now. The foreigners have moved on to cheaper places in the US and the government has no choice but to kill this market.

    ICYMI Mike it’s all about power and the next election, not your wallet.

  87. Too funny how many aren’t grasping the obvious (especially the bear-mongers) of what would happen to an average when high-end sales are temporarily obliterated. The average will obviously bounce right back as the high-end sales resume in Richmond, etc.

    Meanwhile, the price of every Joe Blow’s home in Vancouver actually went up over the past month. The benchmark home for all of GVA was up 0.3% from July.

    At this point you can almost hear the bears scratching their heads… how could the average plummet, yet everyone’s home went up?

    Also interesting to see the benchmark & median price of a house on the ritzy west side go up last month (3.519M to 3.550M for median).

  88. Marko Juras
    September 4, 2016 at 8:25 am
    So I just had a chance to read through the Vancouver stats this morning……

    Marko,
    You are in an excellent position as a Realtor because the various boards provide the obfuscation and cheerleading for you. What that means is that you can be neutral and not face the backlash from potential clients if the various board statements don’t reflect reality.

    Everybody remembers the Realtor’s name that steered them wrong and they are not shy about warning people away.

    I would not want to see you lose credibility by getting caught up in a no win battle with the bears. You are cheerleading misleading Vancouver stats and it has absolutely no upside for you.

    Steve Saretsky and Rob Chipman provide meaningful stats that interested buyers can review or not. The media’s attention to the downturn will exacerbate the potential correction/crash/downturn. You should know this.

    You seem fairly knowledgeable and capable. The possible downturn in Vancouver will have ramifications for Victoria. If you provide stats and support, anyone that reads this blog will see you as sincere and helpful.

    Posting cherry picked listings and arguing Vancouver stats could very well make you look disingenuous in the event of a meaningful crash.

    Remember support can be beautiful. Lol.

  89. Historically the months of inventory will increase most months from now until December. We have added between 2 to 4 months of inventory historically between now and then. That would make the market in balance between buyer and seller with about 4 to 6 months of inventory.

    For those that got caught up in the bidding wars and paid over market value this is going to be bad news. If you have to sell then you’ll be taking a loss on the re-sale. And it is those that paid more than 25% over the assessed value that should be worried. Because as the market returns to a balance between buyer and seller your property will lose value while those that paid fair market value will remain stable.

  90. thanks JJ, it will be interesting to watch those numbers shift.

    “As Bearkilla pointed out…”

    I thought Bearkilla’s point was that the bulls are twitchier than they used to be.

  91. Good one Bitterbear.

    I’m expecting that the average, the median and the mode will get closer together as the high end sales decline. That’s why I’m confident that Oak Bay will correct to be more in line with the historical norms of the neighborhoods of Fairfield and James Bay. Today the spread between the mode, median and average in Oak Bay is huge. That’s if you can determine where the mode is today. Historically it has been around 15% more than the adjoining districts but it’s off the chart today

    As Bearkilla pointed out. You could buy a home today in Oak Bay and six months from now it could be more expensive. But that would be a high risk purchase since real estate becomes less liquid in declining markets unless you are willing to take big losses.

    Most people are buying for long term home ownership and that means that they will experience at least one major market correction if not more over the term of their ownership. That correction is most likely to occur when BC has its next economic recession. Which ironically could be brought on by real estate.

    This is just as much a blog for home owners as much as it is for renters. My thoughts are that if the average fell below the median prices for several quarters, BC would likely be in a deep recession or even an economic depression. Most people would be worried about losing their jobs than being upside down in their mortgage. And we could have low listings as people would not be offering their homes for sale when they are upside down in their mortgage – they’ll just stay as long as they can in their homes. The difference is that most of the properties listed for sale would then be under duress such as a divorce, a foreclosure and estate, etc.

    Of course if you are a regular reader of this blog, this isn’t going to happen to you. You’re going to know a lot sooner than the average Jack and Jill on the street. You might get a little wet but you’re not going to drown with the rising bank-of-rupt-seas.

    So let the paid and unpaid trolls attempt to disrupt the discussion on this blog with their false statements and malicious personal attacks. They don’t want you to be informed or for you to hear contrary points of view. They already sold their souls and are the walking dead of the IT world.

  92. See this is what I’m talking about. Sweet home wasted years and 150k because of idiot bears talking about risk. Renting is the safe bet. Yeah sure looks like that for sweet home bear. 150k and all those years living in a shit rental. We are all dying just remember that. Do you want to continue being a loser?

  93. It will be interesting to see if the difference between the median and the average decreases over the coming months. I wonder if in an upward moving market the average is higher than the median but in a downward moving market the median will be higher than the average. I’d appreciate any thoughts from the experts.

  94. Interesting chart comparison of average, median, and benchmark prices in Vancouver:
    http://vancouversun.com/business/real-estate/mixed-messages-in-vancouver-real-estate

    “UBC real estate economist Tom Davidoff said that while it’s important to use a statistic that corrects for changes in the types of homes being sold [benchmark prices], that doesn’t mean the board’s latest numbers present an accurate picture of the market.” (probably because benchmarks tend to lag)

  95. One of the things that drives me crazy is before and after comparisons using different variables over time frames ie Prices up xx% over last month with sales down only .X% over the ten year term. these kinds of comparisons are shamelessly misleading.

  96. More MSM media bullshit claiming foreigners are flocking to Victoria now but show zero evidence, and they close the comments section to not be challenged. Scary comments show the truth I guess.

    Must be a maxed out CBC Vancouver journalist and is busy doing everything he can to debunk the average price tanking. If it wasn’t relevant then the average price wouldn’t be used anymore. Pretty sad journalism when there is no evidence shown sales went up 19% last month, MOM as he is implying, not YOY.

    “And there is ample evidence that those wealthy foreigner buyers never left B.C. Many just have flocked to Victoria, where the tax does not apply, luxury homes are a relative bargain and sales climbed 19 per cent in August.”

    http://www.cbc.ca/news/canada/british-columbia/vancouver-real-estate-1.3746472

  97. Sweethome, you have a house now so rejoice and go with it. If you blame anyone blame the Fed for stoking the market for 2 years with taunts they will raise the rates next month, then a couple months later etc etc. Now they have painted themselves into a corner where a 1/4 point raise crashes the world markets.

    Not the environment I would want to risk my financial future on a house when the Vancouver market average price has tanked $300K. The bulls used the average price adnauseum the whole way up, but now it’s not supposed to be even acknowledged as evidence a crash may be beginning when the shoe is on the other foot. 39 year historical price tank with sales down 26% and the agents poo poo it. Hilarious.

    Same goes for the ‘we’re just back to average sales” line after years of outrageous rises and the $300K just brings us back to X point where we were a year ago. More bunk, the market in Van is clearly tanking and it’s just getting going and will take many more months to unwind in stages, might even get a small pop. Who cares where it was a year ago, the market is clearly changing it’s direction and momentum is all that matters.

    Never heard so many excuses, but again it’s not called the “denial” stage for nothing. That’s what parabolic markets are all about. Greed, denial, and now fear.

  98. So I just had a chance to read through the Vancouver stats this morning……

    From a historical perspective, last month’s sales were 3.5 per cent below the 10-year sales average for the month.

    The total number of properties currently listed for sale on the MLS® in Metro Vancouver is 8,506, a 21.9 per cent decline compared to August 2015 (10,897) and a 1.9 per cent increase from July 2016 (8,351).

    The pricing index in Great Vancouver for a single family home dropped 0.1% month over month. It is up 35.8% in the last 12 months.

    So basically the 10 million dollar home dropped but if you are in Burnaby your neighbour’s house that was $1 mil last year is now $1,358,000 down from a peak of $1,359,000 in July. Sales are barely below a 10 year average and inventory totally sucks.

  99. Wasn’t Marko blocked for repeatedly promoting his business and making a slanderous video ? No surprises he blocked you too. How can you discuss something with someone whose never wrong.

    He had an input for “website” just like this blog has…if you call that promoting. I made a YouTube blog on my channel about him and he was so pissed off he called me about it directly and said I was mis-representing things and to take it down immediately, etc. Funny guy.

    Garth is an entertainer in my opinion. The minions that follow him will celebrate if Vancouver drops 20% bringing it down to only 50% up since he started blogging.

    Not to mention 10 years have gone by. If you started reading his bs at 40 now you are 50 and still haven’t bought. Might as well just wait to transition from the rental into the nursing home with the 8% return balance protfolio.

  100. Uggh, Garth Turner! I wish I would have never heard of him. I can’t say I followed his advice solely, but I didn’t want to be a “Greater Fool”, and I attached myself to the theory of rising interest rates dropping our prices that never got fully corrected after 2008. So, thanks for nothing Garth Turner! How about paying me the $150K or more I had to shell out to buy a house this year? Now maybe I have become the greater fool, but I just got tired of trying to predict how all the factors will play out. As other have pointed out, that is difficult, if not impossible to do. It was almost certain prices would not continue to rise at the pace they had in the spring, but I couldn’t say much beyond that.

    On another note, I have been watching some tiny home videos. If homeowners are allowed to have one in their backyard, that could change the rental market. I hate sharing walls with other people, but tiny homes are much more appealing. HGTV even has a show about them, so you know they’re hot.

  101. “I wonder if measures of optimism like consumer confidence, luxury item purchasing, vacations, number of first time buyers etc would predict housing markets better than the fundamentals. ”

    Agree – it seems that anyone who depended on “traditional fundamentals” to make a guess on the future of the market was at a disadvantage. eg., what happens in places like China or US or Russia also matter to real estate markets now, and also which cities are considered hedge cities, because people are investing in houses like stocks (eg., David Foot was another author who made great points about the effects of demographics, but missed the mark when he didn’t take into account the global nature of all the markets)

  102. If prices drop it may be a buying opportunity.

    Yeah I’ll be keeping my eyes out for the next opportunity. Not keen on real estate investment but if there was an event that caused panic selling like we saw in 2008 I could be persuaded.

  103. $300K average price tank and 26% sales drop according to GVREB is a good start wouldn’t you think? That’s never happened on that 39 year chart before. Hard to call it a blip, more like “look out below”.

    It is a good start. It would be even more impressive if there wasn’t a matching $300k increase shortly before. Currently we are back where we were a year ago which is still insanity. However if it keeps dropping at high rates that will be very interesting. I wonder at what level panic will start to set in in Vancouver?

    I think we can agree that Garth is an extraordinary blogger. To write a long daily post for so many years that is often entertaining or interesting is very impressive. He also does have sensible investment advice as others have noted. The specific recommendations or predictions aren’t much better than random guesses but anyone who knows about the markets knows that already. I have several of his books as well and while they didn’t turn out to be very accurate they did educate me a lot when I bought them back then.

    I recall attending one of his talks in ’08 or ’09. It was really bad

    I attended one back then too. Thought it was good actually. But I was all fired up about how the real estate bubble was going to crash back then so it hit all right notes.

  104. If prices drop it may be a buying opportunity. Certainly isn’t now. I don’t have any urgency to buy or sell so I don’t much mind what happens except for general concerns about affordability.

    Funny how Garth being right after 10 years

    of being wrong. Given that RE is cyclical if you call a drop for long enough it will come true. And we’ll see. And who cares really. In order to engage in such prognostication to the point that you write whole books about it, and then mysteriously deny what you wrote when you are proven wrong, you have to have a super-ego with little regard for facts that don’t fit.

    No-one who posts alternate viewpoints on Garth’s blog gets through as far as I could tell – I don’t read the blog regularly. I only attempted once and then I realized why all the posts were one-sided. All part of the filtering of facts and information that keeps the self-aggrandizement going. And it happens to pretty much anyone who posts facts that are contrary to the message posted.

    Actually, come to think of it, Garth Turner kind of reminds me of a Canadian Donald Trump – the facts are irrelevant.

    As far as being right goes, I’d say that I’ve guessed wrong too. I thought prices would drop in 2012 and that interest rates would rise. We bought anyway because you only have the best deal of the day when you are ready to buy. Turned out well, except for the 10-year 3.59% mortgage that seemed wise at the time.

  105. “He then launched xurbia.ca, a website dedicated to selling domestic electricity generators and survivalist gear.”

    Ahh! I forgot all about the xurbia phase, almost like it was a dream. I recall attending one of his talks in ’08 or ’09. It was really bad; i think in part because he didn’t have his writing style to save him.

    It’s hard to hear someone through when they express zero modesty about their ability to judge future events.

  106. “Garth is right? Let’s wait and see on that”

    $300K average price tank and 26% sales drop according to GVREB is a good start wouldn’t you think?

    That’s never happened on that 39 year chart before. Hard to call it a blip, more like “look out below”.

    If/when that happens here the bulls will be having multiple cardiacs. 😉

  107. Funny how Garth being right after 10 years gets under your skin so bad you have to waste a good chunk of your holiday trashing him.

    Wasn’t Marko blocked for repeatedly promoting his business and making a slanderous video ? No surprises he blocked you too. How can you discuss something with someone whose never wrong.

  108. Maybe you should go on his blog and tell him how terrible a predictor he is.

    I was deleted like every poster who does not agree with something he said is. Ask Marko about that.

    Did you buy in the US after the crash ?

    Researched it thoroughly and knew it was a good deal. Bought here instead and it worked out with less tax and financing hassles.

    Did you predict that ?

    I generally don’t make predictions. Life is time limited and you only have now to make the best decision.

    Since 2009 I have only seen calls for slow melt correction of 15% and just lately called for a crash

    Yes. 2009. The year Turner published “After the Crash: How to Guard Your Money in These Turbulent Times”, in which he presented three future scenarios, one of which was a Mad Max world of ghost suburbs, gas and food shortages and surging urban crime. He then launched xurbia.ca, a website dedicated to selling domestic electricity generators and survivalist gear.

    And in 2012:

    His fast-paced presentation revolved around The New Normal – characterized by glacial economic growth and weaker commodity prices, and indebted families spending less.   He referred to the frenzied buying in the Vancouver real estate market  between 2009 and 2011 as the “delusional period”.   “In 2012, the 15% price correction and 30% collapse in sales foreshadows what is yet to come.”  By the time things trough here, he sees a 40% per cent drop in average price, with a return to 2005 levels. 

    https://harderblog.com/2012/08/21/the-greater-fool-live-in-vancouver/

  109. Maybe you should go on his blog and tell him how terrible a predictor he is.

    I never followed him in 1999, but agreed( like many did )it should have crashed here in 2008 like the US if not for Harper intervention for $113 billion. Who woulda thought the tax payers would have to pay for over leveraged borrowers with 40 year mortgages in dire straights and bank greed ? Did you predict that ?

    Did you buy in the US after the crash ? Those that did took a risk but did they all win ? Alot of horror stories of squatters destroying tons of places that ate up any profits.

    Missed the CPP call but won’t be surprised in 5 years it will be in tough like all the other pension plans and insurance companies that are in the US.

    Since 2009 I have only seen calls for slow melt correction of 15% and just lately called for a crash.

    As FrancVictorian says, I follow Garth for entertainment and his humor, and info from other sources, never for his financial advice.

    I don’t see a $300K tank anywhere previously on that GVREB chart. That should be the focus now. It’s historical and foreboding what could be coming our way soon.

  110. Garth has never predicted a crash til just lately

    Garth Turner released a book in March 2008 called the Greater Fool: The Troubled Future of Real Estate. Over and over again he predicted an imminent US-like crash. He specifically predicted a 30% drop that year and more after that. He also predicted that CPP would be broke by 2015.

    To quote from the book:

    Canada has its own, hidden debt crisis just as dire as the subprime mortgage fiasco, and the same self-dealing industry tactics have led us to put more than 80 per cent of our net worth into a single asset, ignoring the obvious threats and repeating the disastrous mistakes of others. Are we next? Yes.

    He also stated:

    Turner warns Canadians not to get sucked into buying “bargain” foreclosure properties in the United States.

    Such bad advice. Now that the dollar and prices are up those who did buy in 2008 are cashing in big time.

    Before that, in 1999 he stated that in the next 20 years no gains would be made in real estate. That concrete enough for you to say he was wrong?

  111. I think Garth’s predictions are mostly for entertainment. His blog can be pretty funny if you take that view and roll with the hyperbole. I don’t find a high information content there, but I do like his writing style.

    While he’s going to be mostly wrong most of the time with predictions, as anyone would be, his financial advice is really quite sane, conservative, and substantiated: diversify, avoid debt/excessive leverage, etc. It’s hard to argue with that, and it’s also very much not what a psychic/guru/forecaster would say.

  112. Just read a paper called Understanding Booms and Busts in Housing Markets by Burnside, Eichenbaum and Rebelo (2015) presenting a model that incorporates social dynamics as a factor explaining house buying behavior. Won’t pretend to fully get the math, but the take-home message is that buyer optimism drives the market on the way up and when the optimist who is the marginal buyer becomes skeptical about prices continuing to rise, skepticism leeches into the pool of optimists and the market turns if people believe the underlying fundamentals have not changed. If people believe the underlying fundamentals have improved you get a boom and plateau. Given this, I wonder if measures of optimism like consumer confidence, luxury item purchasing, vacations, number of first time buyers etc would predict housing markets better than the fundamentals. I see that consumer confidence is still high and people are still spending. Looks like signs of continuing optimism. But, with the wavering Vancouver market, perhaps some uncertainty creeping in.

  113. Actually I don’t gravitate towards individuals that are gurus or psychics. I still listen to the opinions and predictions of others but I make up my own mind.

    Only the weak minded are afraid of other peoples points of view.

    And then there are those that falsely and maliciously discredit others so that different opinions can not be heard. Those are the ones we should all fear.

  114. I’ve signed up to Ross Kay’s site (or rather, applied for the interview to sign up). I predict pyramid scheme but I’ll keep everyone updated on what happens.

  115. “Forecasting Is For Weathermen”, as behavioral economist Daniel Crosby says in his book ‘Laws of Wealth’. Predicting the future & market-timing are futile. Stop trying. Garth Turner’s material are a complete waste of time. He has been wrong about the market for >10 years. You would have lost (or failed to earn) a lot of $$$ if you listened to people like Hawk or Garth. Naturally, we like to predict & control the future. Thus, we gravitate towards individuals who are so-called gurus, forecasters, psychics, etc. Unfortunately, none of these people can consistently predict anything.

  116. Garth has never predicted a crash til just lately, it’s always been a slow melt of 15%. He’s been totally out in left field on the foreigners which is actually quite shocking to be that blind to the obvious. Meanwhile anyone who questions it is a racist which is asinine and ignorant. If it was Austrian little people invading with billions monthly he’d be all over it. His customer base must be foreigners from the east is my thinking.

  117. Garth loves the attention that his predictions bring him.

    The biggest problem with his is that he denies that foreign investment is an influence. This is patently untrue, as anyone who lives in the lower mainland will attest.

  118. I see Bitterbear’s point in that the world is not black and white – for a “prediction” to be “right” or not, the predictor has to claim a specific timeframe.

    For all the “predictions” we’ve seen of both higher or lower prices, the vast majority (if not all) are using the words the “coming increases” or the “coming crash” – but nobody specifies a particular month or day.

    So at some point in time and in place in Canada, they may all be true. (eg., Alberta real estate)

    As the listener, you may have interpreted their predictions to mean “next month” but that’s often NOT what they’ve said. On the other hand, if the “predictors” say “prices will fall in 3 months” – then you can hold them accountable.

    The word “prediction” is a problem is because people see it on 2 different levels – the 1st person might be predicting “the probablity of a crash”, while 2nd person hears an answer to a different question, eg., “when will prices fall?”. But they’re 2 totally different questions.

  119. Totoro, a prediction is based on variance accounted for. We enter variables into an equation and it gives us the probability of an outcome. If the probability is within our subjectively determined comfort zone, we accept it as a statistical prediction. Based on the variables Garth or anyone for that matter puts into the equation, a prediction is always mathematically correct at a given probability.

    What you,me, Garth or anyone else cannot say, however, is whether unexamined variables are better predictors or whether any intervening variables have voided the prediction. This is true for bulls and bears alike.

    this is fundamentally the problem with any prediction and why I roll my eyes when people tell me the market is going up, down or sideways. The choice of variables is based on assumptions, some more valid than others, that are subject to change, and to unexplained and unexplainable systemic and random error.

    Predictions, if mathematically derived, are always correct, but the variables upon which they are based might not be. Nothing circular here; Vulcan logic at its best.

  120. The fact that someone has predicted a housing crash for ten years and it has not happened doesn’t necessarily make them wrong.

    Depends what you mean. Were they wrong back then and in those 10 years? Undeniably yes.
    Are they wrong right now? No one knows.
    What irks me about it is not being wrong, but being so certain in the wake of overwhelming evidence that the market cannot be that precisely predicted. You can say overall that the market is on the high side of valuation or even dangerously overvalued, but if you say it has definitely topped out and is crashing again and again and it doesn’t happen then you start to lose credibility.

    However I fully realize that in order to be a media personality you have to be certain and you have to be loud.

  121. The fact that someone has predicted a housing crash for ten years and it has not happened doesn’t necessarily make them wrong.

    Yes, it absolutely does. If you are going to make predictions you are accountable for them. If they don’t come true you are wrong.

    Your argument seems to be that Garth was not wrong because he was predicting the unpredictable. A circular argument lacking in logic and accountability.

    I would agree that Steve Saretsky’s posts make sense.

  122. Good post Bitterbear. Central bank intervention has always changed even the best experts predictions based on sound economic data. They all missed the massive Asian money that began to pour in here starting in 2012 which changed the whole playing field.

    Now that it’s clearly started leaving the market won’t be able to ignore the massive Vancouver average selling price effect. The foreign money drove this chart to the top and now it will drive it down back towards the mean. $300K drops are something to pay attention to.

    :large

  123. The fact that someone has predicted a housing crash for ten years and it has not happened doesn’t necessarily make them wrong. People make predictions based on whatever variables they toss into their regression equation. In the last 10 years, the variables have changed and shifted because of unprecedented economic interventions and unanticipated market forces. I would hold that given these factors, no one can make any predictions at this point.

    It might be that the number of times real estate is mentioned in the media is a good predictor, or the number of newly minted brokers or the number of bubble tea shops opening up are predictors. The market, it seems, has been anything but predictable in the last 10 years and even less predictable now.

    Nothing is predictable in this market because it is no longer driven by fundamentals. The variables in the equation have changed and most of us don’t really know what they are. Is it foreign buyers? Is it househoarding? Is it intergenerational wealth transfer? Is it interest rates? Incomes? Risk tolerance? DINKS? Media? Subprime lending? does anyone really know? If not, how can we truly make predictions?

  124. Steve Saretsky is a straight shooter and well worthy of following

    Totally agreed. He is bringing some interesting insight to the vancouver market. He is also not making surefire predictions about the future which I like.

    The fact that sales are counted when they are processed is interesting but it does make sense. You can’t report on a months sales in a timely fashion if you have to wait for all the sales to be reported. If the majority of sales are reported within the 7 day guideline then it doesn’t amount to much but a small timeshifting.
    The sale from 3 years ago showing up in August is certainly curious.

  125. AG,
    You mean when the US market blew up into massive millions of bankruptcies but Harper bailed out the banks for $113 Billion to save them from calling in all those thousands of shaky mortgages on the ropes and flipped them all to CMHC ? Won’t happen this time. The Big Short Canadian Style coming up.

  126. Steve Saretsky is a straight shooter and well worthy of following. Interesting comments on the delayed data from months ago counting as last months numbers. I wonder how much of that goes on here ?

    Poking Holes in The Real Estate Board Stats

    “Processing the wrong Data

    Most people don’t know, in fact most Realtors don’t even know that the board releases sales data based on when it is processed! One more time, Processed. I’ve discussed this before with the Vancouver Sun.

    Which means deals which are signed and agreed upon sometimes months ago could count as an August sale. In fact roughly 1/4 of August sales were deals that were agreed to BEFORE the announcement of the foreign buyers tax on July 25. At least for these areas I studied:

    Vancouver West: 26% of sales from pre tax announcement
    Vancouver East: 26% of sales from pre tax announcement
    Richmond: 27% of sales from pre tax announcement
    Burnaby: 27% of sales from pre tax announcement ”

    http://www.vancitycondoguide.com/poking-holes-in-the-real-estate-board-stats/

  127. “BTW, Garth backing this guy is not helping!”

    Are you an agent Ash or just a recent homeowner ? Seems the bulls dis Garth at every chance as the bubble begins to pop.

    Ross Kay has 70 international awards in real estate Mike. How many do you have ? I think I’ll listen to the guy who is educated for decades in this subject, not the maxed out slumlord.

  128. since it is based on a hypothetical home of averages. In areas of homogeneous housing such as Gordon Head it should provide a better indication of changes in value as compared to Oak Bay where properties differ dramatically in house size, lot size, updating and views.

    That’s a good point. The benchmark home may not actually reflect the “typical” actual homes it is supposed to. Not sure what that means for the accuracy of price changes as measured by the HPI but as you say it’s too complicated for most people to understand.

  129. “Sales activity down 17.6% from the month before and 50 percent from August of 2015.”

    50% less sales from a year ago is something the local media nor Mike want to talk about.

  130. If any of us were given the raw data we could calculate the median and the average and all of us would come up with the same answer.

    With the HPI if all of us were given the same data we would all come up with different answers. Neither is it a good indicator of changes in value for different properties since it is based on a hypothetical home of averages. In areas of homogeneous housing such as Gordon Head it should provide a better indication of changes in value as compared to Oak Bay where properties differ dramatically in house size, lot size, updating and views. However, its accuracy has yet to be tested against actual repeat sales. It also relies heavily on past performance of a market so it will tend to lag any abrupt changes in the marketplace.

    But then the HPI was not designed to act as a cross check to verify market prices for individual properties.

  131. Someone asked about Hamiota. My guess is it’s just overpriced for what it is. Great location but 950 for essentially a teardown I think is too much even for this market.

  132. Nah, come on Hawk, Leo dissed your boy Kay based on content, so you lashed out at him. BTW, Garth backing this guy is not helping!

    I think it’s cool that Kay and others are providing the public a wider look at sales data. However I’m not sure there’s cause for a class action lawsuit against the board because of how they the present their data.

  133. Garth backs him up so he has some cred til proven otherwise.

    That’s the hardest I laughed today. Thanks.

    …and I only mentioned I thought Ross Kay sort of looks like Garth. I certainly wasn’t “poking fun of his looks like Trump does the handicapped”.

  134. That’s right Michael, Oak Bay was shown to have a 25.8% increase based on only 14 house sales in August that ranged from a low of $850,000 to a high of $1,950,000. Would you like to take a guess at the size of the error in the data?

    Only 2 homes sold for more than 5% of the asking price. That’s down by 50% the month before. And none of these homes were purchased by people from Vancouver. Sales activity down 17.6% from the month before and 50 percent from August of 2015.

    “CLICK”

    Hear that sound that’s the noise of the hammer falling on an more empty chamber in the game of Real Estate Roulette as Oak Bay narrowly missed the bullet once more.

    https://youtu.be/vkqnAh_5ODw

  135. I’ll do some more reading on what Ross is saying. Just saying so far it doesn’t come across as a well reasoned argument. As for the HPI being fudged in BC, I don’t put too much faith in the HPI but I don’t see any major discrepancy between the HPI and Teranet, or even median prices. How is it supposed to be fraudulent?

  136. Anyone know how much equity the new owners would have to have in this $750,000 property in order for it to be cash flow positive?

    About 400k if there is no suite.

  137. Really Ash ? I listened to the interview and he didn’t sound like a blowhard to me. I judge on the content not the voice/tone , how about you ?

  138. “I believe you said he sounded like a blowhard which sets the table on your judgement”

    Yeah I’m pretty sure Leo wasn’t talking about the sound of his voice when he called Kay a blowhard.

    Wow, going after Leo’s judgment based on this? Says more about you than him.

  139. It looks like his interview will be on the previous site he was on, not the news. His tweets implied he was on the news tonite.

    He is saying BC is the only province to tabulate the HPI data using old/wrong numbers that won’t show price declines for 6 months.

    I believe you said he sounded like a blowhard which sets the table on your judgement.. Agree he should lay it out for free though. Garth backs him up so he has some cred til proven otherwise.

  140. LeoS doesn’t like his voice

    I’m ok with his voice, I’m just immediately suspicious of people making big claims and then saying that in order to get the info you need to pay to access a website. Maybe I’m dense but I also didn’t get his explanation about why the real estate stats are fraudulent.

  141. The house near me that I mentioned a while ago has been unoccupied since it sold in early spring is now occupied: it looks like it has become a rental for university students.

    Anyone know how much equity the new owners would have to have in this $750,000 property in order for it to be cash flow positive?

  142. Guess all those Oak Bay buyers didn’t read the news last few weeks. Vancouver is tanking.

    Ross Kay is on GlobalBC and CBC tonite to blow the lid off the real estate numbers fraud BC’ers have been suckered in on.

    Michael pokes fun of his looks like Trump does the handicapped and LeoS doesn’t like his voice. Funny how bulls react to new information.

    Interesting lines from Garth tonite :

    “Some facts the realtors omitted in their media release on the Friday of a long weekend:

    The average price for all properties sold in August ($832,000) is now the same as it was back in January of 2015. That’s 17 months ago – a period of time during which a lot of people paid an epic amount of money for properties which are now, Mr. Market says, worth less. Oops.

    Only one in five houses listed for sale last month found a buyer. So, 80.2% of all the sellers just got a taste of illiquidity. More to come. As Kay notes, compare that to the 63% of houses which did not sell in March, and you can see the direction in which this market is headed. It’s interesting that despite the clear trend, the real estate board is calling this “a seller’s market.” They wish.”

    http://www.greaterfool.ca/2016/09/02/crushed-2/

  143. Looks like Oak Bay is still leading over the past 6 months, but Vic(core) & SaanichE aren’t far behind. As always, June-Aug have slowed somewhat from the Mar-May spring pace.

  144. How do you think gutter guards would do with Garry oaks?

    Pretty well so far. First year I didn’t have them and gutters filled up immediately with all the Garry oak crap coming off the trees here. Once in a while I go up there and sweep a few branches off the roof but nothing has gotten stuck yet.

    Also just saw they are on sale at Costco today

  145. Those oakbay numbers are strange. Hard to get a real idea of what is going on there with the limited sales and wide prices in homes there, Median can be eschewed a lot by the lack of numbers. There is no way prices are down 15% from Jan. Most likely the opposite.

  146. So what happened to condos in the core where the delayed offer strategy never really caught on. Despite low inventory, prices for condos didn’t escalate the same as houses.

    Month Sale Price, Median
    Jan $272,700
    Feb $305,250
    Mar $289,400
    Apr $299,000
    May $325,000
    Jun $338,550
    Jul $319,950
    Aug $310,000

    And the same for the Western Communities and the Saanich Peninsula. With a limited use of the delayed offer strategy there wasn’t that many stellar eye popping over asks bids.

    And some areas are suffering more than others as the delayed offer strategy begins to flop as sales and prices decline.

    Month Sale Price, Median Oak Bay
    Jan $1,150,000
    Feb $1,029,000
    Mar $1,104,500
    Apr $1,060,000
    May $1,260,000
    Jun $1,192,500
    Jul $1,095,000
    Aug $977,500

  147. One trend that I’ve noticed is the number of insane over asking prices has begun to decline in the last month.

    There have always been properties that sell over asking price. Last August 2015 had about 3% sell over 5% of the asking price. July 2016 had 38% of properties sell over 5% of asking and this August there were 28% that sold for more than 5% of ask.

    And along with that trend comes an increasing days on market and the decline of the over used delayed offer/blind auctions marketing strategy that at one time may have been used in one in every four or five listings for houses in the core. A strategy designed to concentrate multiple offers in a short period of time and in some cases led people to pay well over market value.

  148. A realty reality check.

    The price per finished square foot rate for detached houses in the core has varied very little between $339 to $342 over the last 1,200 house sales since March 10, 2016.

    The big increase happened at the beginning of the year when the price per square foot was $311.

    And that means that if you had bought the median or typical home in the core say in January for $680,000 your property would have increased by $50,000 to $70,000 today with all of the price appreciation happening in the first two months of the year. If you bought the typical home in March or later then your home would not have appreciated and may have declined slightly in the last month by one or two percent.

  149. @VicRenter

    How do you think gutter guards would do with Garry oaks?

    I expect that the gutter guards would work really well with Garry Oak leaves. Oak leaves break down very slowly and would likely just blow off your eaves during the next windstorm. Leaves that break down quickly and get soggy (such as alder, willow, etc.) do not work so well with gutter guards.

  150. “Crazy that their experience fit the stereotype. Could not believe it. They are very happy to exit now though…”

    Dasmo,
    Your friends will look back on this as the easiest money ever made.

  151. When I looked into gutter guards, it didn’t seem like an install-and-forget job. You still needed to rinse off the pollen and other crap that turns to goo on top of the guards and then completely remove the guards every few years to clean the system. “It’s easy if you’re handy,” the salesguy said. Well that’s the whole problem, isn’t it?

  152. @ Leo S: Any tips on who to get to install the gutter guards you recommend?

    Don’t get the cheap plastic ones from home depot. I got the aluminum ones from Costco and installing them is dead easy. No tools just snap them on.

  153. “In other news, I was interviewed by a guy writing an article about Victoria real estate for a Hong Kong and Singapore magazine. The mag bills itself as the “go-to-luxury lifestyle guide for high-net-worth readers”. Now why would they be looking at us?”

    Maybe they want to buy up Victoria before the Feds are on to their shady money laundering schemes connected to the ruling political party like the Anbang group who just bought a chunk of the Bentall building but is getting scrutinized by New York authorities. Several hard hitting stories out today.

    A Chinese Mystery: Who Owns a
    Firm on a Global Shopping Spree?

    Owners of Anbang, a Chinese insurer behind a
    wave of multibillion-dollar deals, include relatives
    and friends of its politically connected chairman.

    http://www.nytimes.com/2016/09/02/business/dealbook/anbang-global-shopping-spree-china-mystery-ownership.html?_r=0

    Behind China’s Anbang: Empty Offices and Obscure Names

    http://www.nytimes.com/2016/09/02/world/asia/china-anbang-insurance.html?action=click&contentCollection=DealBook&module=RelatedCoverage&region=EndOfArticle&pgtype=article

    Vancouver’s new property player has deep pockets – and a rich Chinese communist pedigree

    Anbang Insurance, reported buyer of Vancouver’s Bentall Centre, is spending incredible amounts on foreign assets around the world

    http://www.scmp.com/comment/blogs/article/1916038/vancouvers-new-property-player-has-deep-pockets-and-rich-chinese

  154. @ Leo S: Any tips on who to get to install the gutter guards you recommend? My new home owning friends were wondering about this the other day.

  155. The price plateau is interesting, but I really don’t know what to take from it.

    I’d say nothing much. The plateau is probably from sales mix changes or just chance. The various indices don’t show a plateau.

  156. The price plateau is interesting, but I really don’t know what to take from it. Just look at last year: market conditions were rapidly improving, all signs pointing towards higher prices, bidding wars breaking out everywhere, yet not much movement in reported monthly prices.

    We all thought it was because Victorians reached their max in affordability. Then spring 2016 hits and prices took a giant step up all at once. I wouldn’t be surprised to see another jump in 2017 (but smaller). Then again there’s the whole Vancouver situation which has to be a bit of a buzz kill for prospective buyers here.

  157. Great graph porn as usual. I have some juicy anecdotal material. Those friends did list their house. Sold it in two weeks (so the market is slowing!) for over ask (but not hundreds over). No conditions. To who? You guessed it. A Chinese student! Plus they were suspicious of the other offers of being people looking to possibly shadow flip. Crazy that their experience fit the stereotype. Could not believe it. They are very happy to exit now though…

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