March 20 Market Update

This post is 7 years old. The data and my views may have since evolved.

Weekly stats update courtesy of the VREB.

March 2017
Mar
 2016
Wk 1 Wk 2 Wk 3 Wk 4
Unconditional Sales 107 312 532
1121
New Listings 209 484 740
1445
Active Listings 1581 1614 1604
2618
Sales to New Listings  51% 64% 72%
78%
Sales Projection 852 896
Months of Inventory

3.3

Incredibly, inventory actually fell from last week which is unbelievable given the time of year.    That said comparing to last year to date, we are slightly ahead at  111 listings added so far this year compared to 80 in the same period a year ago.  Still way off a more normal year like 2015.      

Months of inventory is getting very similar to last year.  That means we should expect similar results in price movement, but the wildcard is the out of town buyers and whether they will continue to flood in like they did last year.   Interestingly enough, the Vancouver situation seems to have almost stabilized for now, and while sales are way down (especially in detached), new listings are down almost the same amount.   It will be very interesting to see how this plays out as it may prove or disprove the effect of foreign buyers in that market.

Number of new agents entering the business is very high right now.   Not sure what they will all do as there are more agents than listings out there.  Maybe we should track the agents/population ratio as a predictor when the market becomes unsustainable?

The HHV Meetup is happening on April 7th at 6PM at the Penny Farthing. I have a reservation for 20 people which is about as many as are signed up.  If you can no longer make it, please remove your name from the list or email me so I can adjust reservations closer to the date.  Thanks!
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Irregardless
Irregardless
March 23, 2017 10:21 pm

Wow. 17 times household income. This is where the bubble has to pop first..

https://www.bloomberg.com/news/articles/2017-03-23/stretched-china-homeowners-weigh-on-retail-sales-in-big-cities

Bingo
Bingo
March 23, 2017 8:57 pm

Leo S

Agreed with Introvert on this one, I’ve never heard of GH boxes being money pits.

Sorry, I didn’t mean money pit in the sense of “Oh you are going to have so many problems”, I meant it in terms of updating. All I see is $$$. Once you get started throwing money at the place doing ‘minor’ updates it’s going to snowball. I speak from experience. Fixing the deck turns into a new deck and new siding.. and hey, the excavator is here let’s update perimeter drains and the sewer line.

From what I’ve looked at in MLS you could easily drop 100K on a GH box. They may be fine structurally (of course good luck knowing that with a quicky inspection during the open house), but many scream “deferred maintenance”. Stuff like a new roof, perimeter drains, gutters, exterior paint, attention to the heating system or a full on replacement. Then there’s cosmetics. You want to pull up the shag, get rid of the wood paneling, update windows and doors. Your wife can’t live with the 70s kitchen and the bathrooms are super dated and need a gut.

Need a suite to make your mortgage payments? Better upgrade to 200 amp if it hasn’t been done.

Those appliances are pretty old and suck a ton of power plus they don’t match the kitchen after you update.. etc etc etc.

Maybe I’m out to lunch and people think those places are move-in ready or GH is just so desirable you’re willing to sacrifice the house for the location. Personally I’d rather live in Royal Oak in a nicer house (e.g. 80s/90s with recent renoes) than a 70s box in GH.

The prices are nonsensical to me . Dump 100K into that 1mil box and is it now a 1.1mil box? Maybe.. seems like a pretty risky gamble to me.

Local Fool
Local Fool
March 23, 2017 6:57 pm

Hello HHVers, Lurkers,

I am enclosing a link to a PDF at the bottom of this posting, titled,
“Freeholds on Fire: How Investor Demand for Houses is Driving Up Prices in the Greater Toronto Area”.

It is an engaging, simple and informative read which eloquently describes what the author claims is excessive speculation in the GTA, and some of the dubious or totally outrageous investor expectations/rationalizations underpinning the activity. This is what I believe happened to Van RE, which in turn has infected Vic RE. I further believe that it will all end up having the same result, albeit to varying degrees.

” Toronto largely avoided the speculative mood that plagued many U.S. cities during the boom that ended in the 2008 subprime mortgage implosion, but that doesn’t mean we’re immune to it. In fact, we may even suffer because of it – because property prices did not decline in the years before and after 2008 (except for a brief period in which consumer confidence fell in response to the U.S. crisis), in spite of experts warning that they would, many of us have begun to believe that Toronto is exceptional – we are the one city that disproves the economic rule that what goes up, must come down.”

“So this sound premise that it’s a good idea to buy a house this year because it’s probably going to cost more next year and you’re going to want a home, and the fact that you can finance it gets distorted over time if housing prices are going up 10 percent a year and inflation is a couple percent a year. Soon the price action – or at some point the price action takes over, and you want to buy three houses and five houses and you want to buy it with nothing down and you want to agree to payments that you can’t make and all of that sort of thing, because it doesn’t make any difference: It’s going to be worth more next year…

“95% of all [GTA] investment properties purchased in 2016 – provided they were purchased with a 35% down payment or less – are losing money every single month….The investor then states that even if their house doesn’t appreciate 20% per year the way it has been, and it only goes up 10% per year, then losing [portion of carrying costs] per month is a small price to pay if your investment is appreciating by $80,000 per year – or roughly $6,600 per month.”

Standard issue housing bubble, folks. It’s nothing more than that, and it never was.

http://realosophyrealty.blob.core.windows.net/static/InvestorDemandHouses.pdf

caveat emptor
caveat emptor
March 23, 2017 4:36 pm

I had a substantial claim with TD Meloche Monnex. The adjuster was good and we were overall satisfied. I don’t like the current rate they are offering us though and bizzarely they won’t let us drop the earthquake coverage which we originally took us an optional extra. We are now shopping around.

caveat emptor
caveat emptor
March 23, 2017 4:33 pm

156 Cambridge sold in September 2016 for $880,000; then re-sold yesterday, after 20 days on the market, for $885,000. All expenses considered, that’s a $50,000 loss to the sellers.

Apparently even in this market you have to hold more than six months to turn a profit. That said I wonder if the September purchaser overpaid or the current purchaser got a comparatively good deal?

Introvert
Introvert
March 23, 2017 3:50 pm

I like TD Meloche Monnex. Cheapest rate we found, can’t say I have experience with claims though. UVic Alum rate.

Same. Same. And same. U of C alum.

Marko Juras
March 23, 2017 3:48 pm

Any recommendations for house insurance?

I like Thunderbird on Yates.

Marko Juras
March 23, 2017 3:47 pm

156 Cambridge sold in September 2016 for $880,000; then re-sold yesterday, after 20 days on the market, for $885,000. All expenses considered, that’s a $50,000 loss to the sellers.

This use to be an extremely common discussion point on the blog 4-5 years ago…….the purchase price to buyer still higher than September. The transaction cost loss doesn’t benefit the buyer.

Introvert
Introvert
March 23, 2017 3:43 pm

No they were still using asbestos in the 1970s

Ours is a 1977, and no asbestos anywhere. Quite common in the decades prior, though. We have friends who’ve had to remove it.

They were using single pane windows

Probably. Luckily, ours were replaced with vinyl just before we purchased the home.

oil furnaces

Yes, I see a few of them. Our original furnace is forced-air electric. No complaints.

and worst of all in my opinion : clay tile for perimeter drains.

I have no idea what ours are made of; all we know is they’re working!

Top that off with small bedrooms with no master en-suite and no walk in closet and a generally crappy layout

I’m not sure where you’re getting small bedrooms from; one of the main benefits of the “box” is large bedrooms. We have no walk-in closet, though.

Location wise I don’t get the appeal either. Saxe Point for example is pretty close to downtown and just as nice as gordon head.

Saxe Point is nice. Being close to downtown isn’t really a plus for us. Most parts of GH are pretty sleepy, and we like that. I’m sure there are still parties happening in other areas.

M
M
March 23, 2017 3:37 pm

Any recommendations for house insurance?

gwac
gwac
March 23, 2017 3:13 pm

Boulderwood one 778/1002k 2015 and 2016 assessment. People are shooting for the stars. Curious to see where this goes eventually.

Local Fool
Local Fool
March 23, 2017 2:59 pm

Hawk, what neighborhood are you located in?

Hawk
Hawk
March 23, 2017 2:49 pm

There ya go LeoM, not everyone’s a winner in the real estate game.

AH
AH
March 23, 2017 2:48 pm

I live in Esquimalt and also think it is somewhat undervalued. Luckily for us the stigma made it affordable back in 2005 when we bought and we still get to enjoy the proximity to downtown, the ocean, new amenities and the small town feel. We bought a rental property in the municipality in 2014 and also benefit from a much better ROI than if we had bought in a more expensive part of town. There is a ton of development / new stuff opening in Esquimalt in the next couple years: Red Barn Market, Esquimalt Village Project, West Bay Triangle development, Old English Inn development, opening of kids splash park, etc. etc. Will be fascinating to watch as it transforms. I don’t mind the stigma myself – I consider it a snob filter:)

Hawk
Hawk
March 23, 2017 2:46 pm

2777 Dewdney Ave slashed $50K. I thought Oak Bay was hot with the Vancouverites being introduced at the open houses ? I guess things are cooling off.

LeoM
LeoM
March 23, 2017 2:43 pm

Here’s one for you Hawk that supports your theory. It’s located in southwest Fairfield, near the Dallas Road beach, near Beacon Hill Park, and a short stroll to Cook Street Village.

156 Cambridge sold in September 2016 for $880,000; then re-sold yesterday, after 20 days on the market, for $885,000. All expenses considered, that’s a $50,000 loss to the sellers.

Hawk
Hawk
March 23, 2017 2:42 pm

4684 Boulderwood Dr slashed $100K. Guess Broadmead isn’t good enough for the HAM.

Hawk
Hawk
March 23, 2017 2:35 pm

I’ve seen it a few times and not a regular down there. It was right by the building you were all in a tizzy about because some pot smoked whaffed by and you wanted a police investigation.

Someone was trying to torch the Uplands Campus school on Henderson last week but they got away without their gas cans. Oak Bay has had some of the most gruesome murders over the years.

Oak Bay cops are useless as history has shown. Crackheads can make smoking crack look nondescript ICYMI. Denial of the obvious or lack of awareness is where most locals miss the boat.

totoro
totoro
March 23, 2017 2:28 pm

I walk the avenue almost every day and have managed to miss the crack smoking. My kid who works on the avenue hasn’t seen it either. None of the kids – all teenagers who walk it at night – have had this experience. Ive seen panhandlers In front of fairways a couple of times over the years and bottle collectors regularly. And the Oak Bay police have so little to do and cruise the avenue so often that I can’t imagine it would be a hot hood for public displays of crack consumption.

I agree Esquimalt might be the place to buy for value.

Dasmo
March 23, 2017 2:24 pm

I think it depends on what is defined as Gordon Head. True Gordon Head (As Leo schooled me on) has more custom builds which tend to be better quality. My friends house is crazy solid. House I’m living in, not so much.

As far as brand new Langford boxes go, I would invest in one of these if you are shopping for one.
http://www.raesystems.com/products/minirae-3000-wireless-handheld-voc-monitor

In an exposure range of 0.3-3 mg/m3, odours, irritation, and discomfort may appear in response to the presence of TVOC together with thermal comfort factors and stressors. Above about 3 mg/m3, one may expect complaints; above 25 mg/m3, temporary discomfort and respiratory irritation have been demonstrated. Hypersensitive individuals can have severe reactions to a variety of VOCs at very low concentrations. They can react to organic compounds that are released by building materials, carpets, and various consumer products, including cosmetics, soaps, perfumes, tobacco, plastics, and dyes. These reactions can occur following exposure to a single sensitizing dose or sequence of doses, after which time a much lower dose can provoke symptoms. Chronic exposure to low doses can also cause reactions.

https://www.canada.ca/en/health-canada/services/publications/healthy-living/residential-indoor-air-quality-guideline-formaldehyde.html

Hawk
Hawk
March 23, 2017 1:55 pm

“I imagine that kind of thing happens all the time downtown. Another good reason to live in Oak Bay ”

Last summer a guy pulls a gun on a couple gardening in their yard in the Uplands. Useless cops can’t even catch him. Around the same time some whacko tries to car jack a lady at Gonzales Hill lookout trying to enjoy her morning coffee at 7:30 AM. I’ve seen the crackheads sucking on the pop can pipe on Oak Bay Ave. It may happen less in Oak Bay but it’s everywhere.

Bman
Bman
March 23, 2017 1:32 pm

This idea that houses were better built in the (insert decade your house was built here) than new builds in Langford needs to stop. They may appear “cheap” because of the finishing materials and wanton use of laminate materials, but if we are talking about the “bones” of the house, then a Langford new build is almost certainly overbuilt.

When you buy a Gordon Head shitbox with the intent of gutting it because it is outdated, you will likely be finishing it with the same cheap laminate and composite materials used in the Langford house anyway.

TallGuy
TallGuy
March 23, 2017 1:17 pm

Location wise I don’t get the appeal either. Saxe Point for example is pretty close to downtown and just as nice as gordon head.

Esquimalt seems really (relatively) undervalued to me:

Close to downtown – check
Close to the ocean – check
Nice new amenities and somewhat walkable – check
Heck, close to the highway north – check

TallGuy
TallGuy
March 23, 2017 1:14 pm

A) They seem pretty well constructed to me, and to my neighbours (the ones I’ve chatted with, anyway). In fact, one could argue that the 70s produced some of the best quality homes: they’re free from the really bad stuff like asbestos and knob-and-tube wiring, and they weren’t thrown up in a rush using the cheapest materials known to man, like homes currently being built in Langford.

Not all true. They seem to have good bones, but you’ll still find asbestos in the flooring, spray on ceilings, etc. Not to mention there’s still the lead solder and paint to consider.

In my short experience, the dangers of asbestos and lead can be a bit overstated though. If they are “locked in” well and you don’t disturb them, they generally won’t both you, except for the lead in the plumbing, but a 30 sec flush or a $50 filter is an easy fix.

Bearkilla
Bearkilla
March 23, 2017 1:01 pm

No they were still using asbestos in the 1970s. They were using single pane windows, 2×4 construction, oil furnaces, and worst of all in my opinion : clay tile for perimeter drains. Top that off with small bedrooms with no master en-suite and no walk in closet and a generally crappy layout and you’ve got your gordon head box.

Location wise I don’t get the appeal either. Saxe Point for example is pretty close to downtown and just as nice as gordon head. To me the university is not something I want to be close to. I used to party at houses in gordon head all the time in university no way I’d want to be anywhere near that.

Introvert
Introvert
March 23, 2017 12:37 pm

That’s why I shake my head at the prices these GH 70s boxes are going for. They are veritable money pits.

A) They seem pretty well constructed to me, and to my neighbours (the ones I’ve chatted with, anyway). In fact, one could argue that the 70s produced some of the best quality homes: they’re free from the really bad stuff like asbestos and knob-and-tube wiring, and they weren’t thrown up in a rush using the cheapest materials known to man, like homes currently being built in Langford.

B) Aside from the relative quality of the homes, you’re still focusing on the wrong thing: the building. The maxim is: location, location, location. People aren’t paying $200,000 over asking in Gordon Head because they like the “box.”

AG
AG
March 23, 2017 12:15 pm

watching a crazy person having a bath-salts breakdown in the middle of a grocery store

I imagine that kind of thing happens all the time downtown. Another good reason to live in Oak Bay 🙂

Local Fool
Local Fool
March 23, 2017 11:15 am

Like all things, do your own research. I wouldn’t trust my taste.

Disagree. Research is done by tasting. I’m inclined to trust you unless you give me a reason not to. Such as, I pick up some Highland and end up adding it to my list of life regrets. Until that time, we’re good.

As for getting into the market, I’d say wait until your wife is done her masters. Why? Portability. Who knows what opportunities may open and the current market is too damn risky. Of course I was predicting the market to go flat this spring then correct in the fall.. so I’m slightly bearish.

Agreed. It’s definitely strategic. Portability is a consideration, although I am getting more entrenched myself. It’s mainly risk avoidance and more capital flexibility. On the capital issue, that’s big draw. I like the freedom. Save what I want, invest what I want and move where I want, all on a whim. A house would change that for me, but I would give it up for the right place at the right price. Given there’s little for sale other than hilariously priced rubbish, I have little interest in buying atm. And as you say, my s/o needs to stabilize and get more established anyways. So for now, steady as she goes.

Do have lots of interest in the market, though. It disgusts and fascinates me at the same time. Watching it as I do is almost like watching a crazy person having a bath-salts breakdown in the middle of a grocery store. You know it’s wrong to look, but somehow you can’t stop…

Bingo
Bingo
March 23, 2017 10:26 am

Local Fool

Thanks for the tip Bingo. Will consider it!

Like all things, do your own research. I wouldn’t trust my taste.

As for getting into the market, I’d say wait until your wife is done her masters. Why? Portability. Who knows what opportunities may open and the current market is too damn risky. Of course I was predicting the market to go flat this spring then correct in the fall.. so I’m slightly bearish.

I’d also strongly recommend to anyone thinking of buying to not compromise on the house just to get into the market. We bought bottom of our budget and that’s my biggest regret. Yes it’s nice knowing the insulation, heat pump, roof, gutters etc were done to my specifications and it’s nice making your house suit your tastes.. but I really think we would have been better off buying something that didn’t need as much updating. That’s why I shake my head at the prices these GH 70s boxes are going for. They are veritable money pits.

John Dollar
John Dollar
March 23, 2017 10:06 am

Construction costs? Even if wages are low there are fixed costs that just can’t be reduced.

But there are a lot of variable costs that can be reduced such as builder’s profit and the price of the land.

Land is a variable cost. If contractors building on speculation of finding a buyer during the build out can not construct a home and make a profit then they can not pay the developers land price. The developer then has to reduce his land prices or the land developer will go broke.

When the market slows and begins to decline builders have difficulty in selling their product and have to reduce prices. That will make them cancel future projects unless they can get the land at a lower cost to make the project economically viable. One reason why so much attention is given to building permits issued as a leading indicator of the marketplace. The suppliers of building materials will also sharpen their pencils in order to reduce costs. Therefore if the cost of materials is declining that may signal a slowing market too.

When it comes to construction costs nothing has been carved in stone since the Pyramids were built. When market forces change the companies have to adapt to new pricing levels.

Vicbot
Vicbot
March 23, 2017 10:02 am

When we talk about rising real estate prices in other countries, we have to remember that people & gov’ts there are extremely concerned about what’s happening.

I have friends in Australia & NZ, and travel there, and no one thinks the escalation is normal.

There’s no disputing the facts about how international money flows, “negative gearing” (speculative leveraging), and money laundering are affecting the RE market.

What they’re debating is how to address those specific problems. Gov’ts and industry in Aus/NZ/US have been more proactive about taxes & money laundering.

Note: everyone knows there’ll be long-term increases in RE due to inflation. It’s when prices suddenly escalate over 1-2 years that you have to pay attention to the causes (even if it’s after a slow period).

eg., Real Estate Agents Back Money Laundering Curbs
http://www.macrobusiness.com.au/2017/03/real-estate-agents-back-money-laundering-curbs/

“On-line platforms for sales and auctions, by their very nature, will pose a greater risk for any anti-money laundering scheme regime than traditional real estate businesses and would need to be included in any future scheme,” the REIA said.

“In addition, there are a number of overseas portals selling Australian real estate including new off-the-plan developments to foreign residents. These too would need to be part of any proposed anti-money laundering scheme”…

Hawk
Hawk
March 23, 2017 7:57 am

Beautiful BC, AKA money laundering capital of the world. Christine Duhaime offers an insight to what makes our province go round and round. Did someone say the agents are obscenely jacking up the prices because the Chinese are coming to buy your house ? Pity.

Christine Duhaime‏ @cduhaime 21 hours ago

Couple beside me discussing money laundering. She is from China. He is a director of a Vancouver public company. He tells her to lie to

her lawyer so she will win when she’s sued. Then he tells her if she was in the US, the SEC would put her in jail for money laundering.

Christine Duhaime‏ @cduhaime 21 hours ago
She leaves. He then meets two older dudes who were watching them all along and tells them she committed securities fraud with large China

Christine Duhaime‏ @cduhaime 21 hours ago

corporation that recently entered Vancouver market and laundered tons of money to Vancouver and is f’ed. !! Welcome to Vancouver!!

Hawk
Hawk
March 23, 2017 7:49 am

“Only a handful of pre-builds have been sold at current market prices. Most of what is under construction was sold before the market took off (Encore, Legato, etc.).

It does concern me that people are flipping condo assignments for 100k+; similar to what was going on in 2006/2007.”

If thousands of Chinese all start dumping because they can’t pay to complete the deal such as in Malaysia then you have a crash as the there is no one left to buy.

totoro
totoro
March 23, 2017 1:09 am

Feel free to look them up. Especially the well known cities of “much of Europe” and New Zealand.

You can look up some of the country and city data here:
http://www.globalpropertyguide.com/

Take a look at Norway, NZ and Australia as examples.

househunting
househunting
March 23, 2017 12:09 am

@Local Fool – you’re pretty clued in; if only more had that kind of acumen.. I expect you’ll do well in the end no matter the route.

totoro
totoro
March 23, 2017 12:07 am

LeoS just referencing price/rent doesn’t, imo, explain local market behaviour over time, although it could indicate overvaluation short-term. As an aside, right now sfh rents are going as wellup as far as I can tell.

Price/rent is one of many factors. In my view, prices cannot keep going up at this rate, but I see no reason why they cannot outpace inflation over the long term – as they have done for the past 67 years for some of the reasons that make Victoria desirable for many Canadians and some others highlighted by the Bank of Canada. http://www.bankofcanada.ca/2015/08/long-term-evolution-house-prices/

This does not mean prices would not fall or stagnate in the near term. The greater the upturn the more likely this is to occur imo.

Marko Juras
March 22, 2017 11:59 pm

My mortgage is significantly higher than that. Why wouldn’t you get a mortgage when interest rates are so low? Expected returns on stocks are so much higher than mortgage rates.

In my experience, most people with a 7 figure mortgage would be able to liquidate a part of their portfolio and pay off the mortgage instantly, if they had to. Large mortgages are more common than you think, whether people need them or not.

+1, I have a 2.10% variable on my place so in no particular rush to sell rentals/TSFA/RRSPs or anything else to pay it off. The principal also drops at a really could clip each year when rates are basically nothing.

Marko Juras
March 22, 2017 11:48 pm

Well, thanks to no change to the Capital Gains Tax, I for one will be putting a revenue property up for sale. I wonder how many others were doing the same thing and waiting to see?

If someone was concerned about capital gains tax going up why would they have waited to sell?

If we get no change to capital gains tax I don’t think it will influence supply either way.

Marko Juras
March 22, 2017 11:47 pm

I smell a condo crash coming. Imagine the thousands of new condo pre-builds the last couple years that will have trouble getting the money here.

Only a handful of pre-builds have been sold at current market prices. Most of what is under construction was sold before the market took off (Encore, Legato, etc.).

It does concern me that people are flipping condo assignments for 100k+; similar to what was going on in 2006/2007.

Marko Juras
March 22, 2017 11:39 pm

That said, the common measure of price/rent ratio is flawed because it doesn’t compensate for interest rates.

Real estate markets are super complicated, I don’t think you can look to any one single measure.

In the capital of Croatia, Zagreb, a 150,000-200,000 Euro condo would only rent for approximately 300 to 500 Euros per month, interest rates are over 5%, and the average income is 8,900 Euro per year. The population of the country is actually decreasing YOY, etc.

Literally nothing supports high prices but they are high and it has always been like that. I think it is because of cultural reasons….property gets passed on in families over generations and supply is simply restricted.

Bearkilla
Bearkilla
March 22, 2017 10:04 pm

You can actually see the first owner on a title search for free online. Then go on LinkedIn with your fake account and creep them. I sometimes do that professionally.

Introvert
Introvert
March 22, 2017 9:48 pm

Thanks for sharing, Local Fool. And I call them “bitter renters.”

Local Fool
Local Fool
March 22, 2017 9:40 pm

I see you’re trying to muddy the water of our argument by bringing in “socioeconomic impoverishment,” which is an entirely separate discussion.

Nope, not trying to muddy anything. That was a side comment, but I think it is related to the broader discussion. Plus it was fair to say then, given the argument seemed to be concluding.

Lastly, are you comfortable sharing with us your current situation, Local Fool? I don’t recall offhand whether you’re a home-owner, an aspiring one, or a not-aspiring one.

Nope, don’t mind at all. Not aspiring. I finished my masters a few years ago and am professionally employed. My partner was just starting hers, which she is now in the process of finishing. She manages a professional career as well. No kids, no debt. Investments & savings. We were floating the idea of buying (first time) but as you may have gathered from my posts, our risk aversion to the current market has caused us to choose to wait it out and see.

Technically we could do a SFH in our preferred area now, but we can’t justify the value for dollar atm. Some will disagree, case in point a friend of mine just bought a SFH near St. Michael’s. She knows I think she’s crazy, although she invited us over for a spring house warming BBQ anyways.

I feel like we’d be spending an extra 200K + just to enrich some boomer or speccer at our expense. Does that make sense? Really, I don’t care if something’s expensive; I care if I feel it’s overvalued. And I do. Hence, I come on here and share variations of those views. Van RE just disgusts me atm.

I’m ultimately confident in Vic RE and the value I perceive it to have, and long term I have a bullish sentiment. For right now though, haha no. Not going near it. And if years from now I’m wrong and I turn into one of your “angry renters”, you can let me have it, and you can even use my profile name to make your point. 😀

Cheers.

Introvert
Introvert
March 22, 2017 9:20 pm

In other words, there is no bubble in San Francisco 1BR apartments.

What about the other cities in my and totoro’s list?

Introvert
Introvert
March 22, 2017 9:00 pm

I see you’re trying to muddy the water of our argument by bringing in “socioeconomic impoverishment,” which is an entirely separate discussion.

I love the archaic “intrants” in your excerpt.

Lastly, are you comfortable sharing with us your current situation, Local Fool? I don’t recall offhand whether you’re a home-owner, an aspiring one, or a not-aspiring one.

Local Fool
Local Fool
March 22, 2017 8:54 pm

Thanks for the tip Bingo. Will consider it! 😀

Local Fool
Local Fool
March 22, 2017 8:50 pm

Which do you prefer? I like both.

I prefer my drink. It’s just not cold enough because all this typing is allowing my ice to melt.

Besides, that’s a false choice you’ve offered me. HAM is not a fundamental to Van RE. If you want to argue that it has affected the fundamentals, I could say…

“HAM has pushed locals into a speculative frenzy which has caused prices to divorce from their fundamentals and create a market locals cannot afford. As a result, locals are leaving. The demographic shift could alter the fundamentals, by hollowing out the middle class.”

But that’s tortured. Capital flight into a RE market is not a recipe for long term prosperity. It’s a recipe for instability and socioeconomic impoverishment.

Incidentally, here is an excerpt from the link below, which I find interesting…

Stages of a Bubble

“The market gradually becomes more exuberant as “paper fortunes” are made from regular “investors” and greed sets in. Everyone tries to jump in and new intrants have absolutely no understanding of the market, its dynamic and fundamentals. Prices are simply bid up with all financial means possible, particularly leverage and debt. If the bubble is linked with lax sources of credit, then it will endure far longer than many observers would expect, therefore discrediting many rational assessments that the situation is unsustainable. At some point statements are made about entirely new fundamentals implying that a “permanent high plateau” has been reached to justify future price increases; the bubble is about to collapse.”

https://people.hofstra.edu/geotrans/eng/ch7en/conc7en/stages_in_a_bubble.html

Vicbot
Vicbot
March 22, 2017 8:50 pm

Jerry, it’s because it’s close to UVic – the attraction is education for the kids. Also there are some nice houses with views along the water but you’re right, the prices are extreme even on busy roads.

By the way, great quote Local Fool: “By the time a child finally realizes their parent was right, they’ve already got their own child who’s convinced they’re wrong”

I witnessed the insanity & devastation in the 80s, and then the insanity in Vancouver. It seems like it’s going to need some external event to cool things down (in the 80s it was the oil bust).

Hawk
Hawk
March 22, 2017 8:48 pm

I smell a condo crash coming. Imagine the thousands of new condo pre-builds the last couple years that will have trouble getting the money here.

If it can happen in Malaysia it can happen here. Good luck for the developers getting recourse when they all walk.

How China’s overseas property dream turned into a nightmare

Capital controls mean people who signed up for flats in Malaysia cannot send money from mainland

“She told the Post she was now trapped in limbo and was trying to get a refund. Other purchasers are taking the same course of action.

“Now we understand all further instalments need to be paid abroad. But this is not allowed due to the foreign exchange controls from the Chinese government,” said another Forest City purchaser, Vicky Wu from Guangzhou. “If we do so, we will be put on the government’s black list.”

http://www.scmp.com/news/china/policies-politics/article/2080433/how-chinas-overseas-property-dream-turned-nightmare

Bingo
Bingo
March 22, 2017 8:38 pm

When their bubbles burst, I look forward to being able to afford a house in Vancouver, Sydney, San Francisco, Los Angeles, or Toronto!

<3 it

Bingo
Bingo
March 22, 2017 8:36 pm

local fool

They finally had some Crown Rye in stock, but I was too cheap to get it. Just settled for the plain old.

It’s not all it’s cracked up to be. I bought it due to the hype and was disappointed. I’d take Pike Creek over it any day of the week. For a little more you can get Eagle Rare bourbon.. which isn’t rye, but a superior whiskey imho. Bulleit bourbon is a lot tastier too. I’d take McClelland’s Highland over it too. Cheap scotch > canadian whiskey.

Leo S

I don’t think I can look this up. And even if I could I couldn’t tell you.

You can see who the buyer was on MLS. Isn’t it public knowledge? Anyone can do a title search for $10 and find out the owner and their claimed occupation at the time of purchase.

I do think posting it on a public forum is poor taste (I wouldn’t do it), but anyone curious could ask their realtor or do a title search.

Introvert
Introvert
March 22, 2017 8:32 pm

Pointing at places experiencing a housing bubble is like a nortel owner pointing at pets.com and saying “look I’m not insane their stock is expensive too!”

I’m sure you’re right, Leo. Any city with bonkers prices is in a bubble, except Hong Kong. All bubbles burst. The end.

When each of their bubbles burst, I look forward to being able to afford a house in Vancouver, Sydney, San Francisco, Los Angeles, and Toronto!

Introvert
Introvert
March 22, 2017 8:20 pm

I am arguing that HAM is not a fundamental to Van RE …

I could argue that HAM is now a fundamental of Vancouver real estate. Or I could argue that HAM has changed the fundamentals of Vancouver real estate.

Which do you prefer? I like both.

AG
AG
March 22, 2017 7:46 pm

Re the Vancouver buyer argument.

There’s a guy down the road from us who bought a house for just over $2m and is doing an extensive reno (500k+).

The problem is that he way overpaid for this house. It was assessed at something like 1.1m when he bought it last year, and now it’s something like 1.3m. It’ll be worth maybe $1.8m when he’s finished, but he put in $2.5m.

Anyway, he doesn’t really care, because he sold his Vancouver house for ~$4m and he has lots of cash.

That’s the kind of buyer that really distorts the market.

Jerry
Jerry
March 22, 2017 7:36 pm

Gordon Head. You don’t have to look too closely to see that it’s a squalid place to live with relentlessy dreary homes to match. What’s with the sales prices?

I raise my head just above the parapet and expose my head to the vicious Haute Correct spirit of the age when I ask:

This isn’t a Fung Shway thing, is it?

Local Fool
Local Fool
March 22, 2017 7:32 pm

Try to placate those renters priced-out of Vancouver by saying, “Don’t worry, all this HAM is just a fickle externality.”

You’re obfuscating the argument. I am arguing that HAM is not a fundamental to Van RE, not that an angry renter would be placated by my saying so. The fact that their emotions might cause them to disagree is irrelevant. Having said that, I do think Canada needs to track foreign ownership far better than it does.

Everyone in Canada had/has access to the same low interest rates, and Saskatoon’s houses aren’t in the $700,000s, so there’s something else going on here.

Agreed. There is “something else” going on. My argument is what is going on is a speculative mania, not fundamental growth. I also do not believe that foreign buyers are as direct influence broadly, as some think. However, I think the effect on the local psyche is very real.

Like it or not, Vancouver is affecting parts of Victoria (in terms of Vancouverites cashing out and buying here).

You betcha. And the general premise of Van affecting Vic isn’t new and the spread of the mania here is no different. Lately, as Vancouverites say “The Chinese are coming”, Victorians are saying “The Vancouverites are coming”. The degree to which that is true isn’t important, only that people believe it is. Mania ensues locally, and due to the small size of the market, it doesn’t take much.

I doubt anyone is taking out mortgages of this size [1000k].

The amount of the population employing extreme indebtedness in our major urban centers (<450%) has been growing very rapidly with Victoria very near the top. Levels of debt that high aren’t good for an economy, as it diverts monies into unproductive uses and forces people to stay home or not take that vacation. Countering that can be the “wealth effect”, but sooner or later that effect will be constrained by simple mathematics.

I’m going to have a drink. They finally had some Crown Rye in stock, but I was too cheap to get it. Just settled for the plain old.

AG
AG
March 22, 2017 7:26 pm

Does Mike Grace still read the blog? Mike, if you read this, please tell us how common $850,000 mortgages are, in your experience. Or even any mortgages above $600,000.

My mortgage is significantly higher than that. Why wouldn’t you get a mortgage when interest rates are so low? Expected returns on stocks are so much higher than mortgage rates.

In my experience, most people with a 7 figure mortgage would be able to liquidate a part of their portfolio and pay off the mortgage instantly, if they had to. Large mortgages are more common than you think, whether people need them or not.

Introvert
Introvert
March 22, 2017 7:16 pm

1641 Tampico Pl
List price: $799,000
Sale price: $930,000 ($131,000 over)
DOM: 6

God, if only we could find out who most of these buyers are, and what kind of mortgages they’re taking out, if any.

Leo, you’re on the inside now. Put that $4,000 you spent to good use!

Introvert
Introvert
March 22, 2017 7:08 pm

HAM is an fickle externality, not a fundamental – as Vancouver is discovering.

Try to placate those renters priced-out of Vancouver by saying, “Don’t worry, all this HAM is just a fickle externality.”

Low interest rates can go a distance to explain the room buyers have to leverage, which can make prices rise.

Everyone in Canada had/has access to the same low interest rates, and Saskatoon’s houses aren’t in the $700,000s, so there’s something else going on here.

I have previously commented on the predilection of some people on this board in thinking that Vancouver is the standard by which other markets can or should be judged. Vancouver is one of the worst, if not the worst, housing bubble on Earth.

Like it or not, Vancouver is affecting parts of Victoria in terms of Vancouverites cashing out and buying here, and even in terms of the perception that this may be happening.

When the foreign buyers scare tactic is taken out of the equation this panic buying spree will collapse and the people who are stuck with those million dollar mortgages are going to face a tough reality check.

Again, I doubt anyone is taking out mortgages of this size.

And I’ve read the once-x-happens-everything-will-fall-apart statement so many times over the years on this blog that it now brings an involuntary smile to my face.

Hawk
Hawk
March 22, 2017 5:43 pm

Well said strangertimes. FOMO are gullible to swallow the agent bullshit. If financial advisors spewed those lines they would lose their license. The coming pain will last a lifetime for newbies and the max leveraged like AG and Mike.

Richard Haysom
Richard Haysom
March 22, 2017 5:39 pm

TallGuy;
Flippers are going to get a rude awakening if they think they qualify for Capital Gains Tax exemption or even Principal Residence exemption.
With the new reporting requirements starting with the 2016 tax return all real estate transactions have to be reported. If RCA deems that you are deliberately flipping to make a profit as opposed to a long term investment it will be deemed as a business profit and taxed accordingly.

totoro
totoro
March 22, 2017 5:14 pm

I believe it is quite possible for home prices to separate from income-based affordability long-term. Just look at Vancouver. Or Australia, New Zealand, Hong Kong, Hawaii, Los Angeles, and much of Europe.

Or at what has been happening in Victoria over the last 67 years. Whether you attribute it to densification/gentrification or other factors when comparing apples to apples, ie. same neighbourhoods over time, they have become less affordable over the years.

I also agree bubbles can pop and interest rates can rise and there is risk. My advice, as always, is buy when you are ready and believe you will be able to hold at least seven years.

As far as the fundamentals of stocks and comparing price to earnings vs income to house prices, I think it is not an equivalent. I’ll post later some time when I’m not travelling.

strangertimes
strangertimes
March 22, 2017 4:14 pm

If I was selling I would do it before the election because if the Liberals are booted out in May and a foreign buyers tax slapped on here prices and sales could drop dramatically. Foreign buyers might not be a huge factor here but it is constantly used as a scare tactic by many realtors which creates a panic to buy and overbid keeping this cycle going. The last open house I went to people were asking why the home is priced so high and the realtor just kept repeating that the Chinese are coming and prices are only going higher. To me he sounded like a delirious used car salesman but alot of people buy this stuff. Everyone who sells now thinks there might be a magical foreigner somewhere who will pay a million even for a shack . When the foreign buyers scare tactic is taken out of the equation this panic buying spree will collapse and the people who are stuck with those million dollar mortgages are going to face a tough reality check.

db
db
March 22, 2017 4:06 pm

Younger generation wages.

Here is an example outside of BC – so that you have no biases…

(I happen to know one on V.I. in his early 30’s that earns estimate $180,000 with overtime in B.C. and just bought a house and expecting)

http://www.cbc.ca/news/canada/manitoba/manitoba-hydro-salaries-pallister-debt-1.3874447

db
db
March 22, 2017 3:46 pm

Dasmo

You made a comment that is significant in its simplicity.
There are millennials who wouldn’t question paying less than $4 for a Starbucks coffee or $900 for a Canada Goose.
They don’t know $0.10 comics, candy bars, transit fares, coffee. Nor will they ever 😉
Each generation is born into a decade with many changes.
Every older generation faces sticker shock every decade as well in disbelief at what the next generation earns.

(And we aren’t even talking about countries like Venezuela or Argentina.)

I also want to throw in this thought…paper money isn’t earning a decent return in the bank thanks to QE.

TallGuy
TallGuy
March 22, 2017 3:36 pm

Richard:

Well, thanks to no change to the Capital Gains Tax, I for one will be putting a revenue property up for sale. I wonder how many others were doing the same thing and waiting to see? Had there been a change to the tax structure it would have been a hard sell to convince myself to sell and kiss goodbye possibly tens of thousands of additional tax. The government in my opinion has made the right decision. This should encourage more listings and that’s good for the market. It will help albeit the frenzy and I won’t complain of the extra dollars I get to spend helping out the economy.

The flip side is that maybe if people weren’t buying to speculate or flip because of capital gains tax, there would be fewer buyers and therefore, more supply.

Local Fool
Local Fool
March 22, 2017 3:13 pm

Fundamentals can change. See: Vancouver.

You’re begging the question. Fundamentals in a RE market are income, demographics, and migration. You might be able to make an Alberta argument in there re migration, but I don’t think that explains the nature of the Van market. HAM is an fickle externality, not a fundamental – as Vancouver is discovering. Low interest rates can go a distance to explain the room buyers have to leverage, which can make prices rise.

Fundamentals do not explain houses roaring parabolically to 1.8 million dollars over several years, and if you’re suggesting it does, it defiles credibility IMO. I have previously commented on the predilection of some people on this board in thinking that Vancouver is the standard by which other markets can or should be judged. Vancouver is one of the worst, if not the worst, housing bubble on Earth. Personally, I think people who think that that market is sitting on a strong footing are in for a bit of a rude surprise.

3.74% real average annual gain over many decades seems pretty perpetual to me. I bet it’s also one of the best long-term appreciation rates of any city in Canada.

I feel like your argument is essentially a “different here, different this time” one. Yes, it’s probably one of the better ones. Victoria will always be expensive, IMO. Overvalued is another matter, however.

3.74% is a high appreciation, and that I would say would eventually have to adjust – quickly or slowly over time. However, this market in the last few years are entirely different, and if you’re thinking this city has suddenly uncovered a new dawn with 70K /year households all in homes worth millions from here on in…well, we’ll have to disagree. 🙂

John Dollar
John Dollar
March 22, 2017 3:03 pm

For all of you commenters that believe that money is the only measure of desirability here are the top ten neighborhoods of Victoria for the first quarter of 2017.

Map Area Sale Price, Median
Vi Rockland $1,295,000
Vi James Bay $1,087,500
Vi Central Park $1,002,200
Vi Fairfield West $938,000
Vi Fairfield East $910,000
Vi Fernwood $776,500
Vi Oaklands $759,000
Vi Jubilee $686,000
Vi Mayfair $650,000
Vi Burnside $546,000
Other $522,500

And this was the ranking back in 2011

Map Area Sale Price, Median
Vi Rockland $825,625
Vi Fairfield West $690,000
Vi James Bay $660,750
Vi Fairfield East $645,500
Vi Jubilee $534,000
Vi Fernwood $529,500
Vi Central Park $482,500
Vi Mayfair $480,000
Vi Oaklands $477,500
Vi Hillside $457,000
Other $455,600

John Dollar
John Dollar
March 22, 2017 2:59 pm

Thought I would take a look at Oak Bay to see what is or is not happening.

23 new listings this month compared to 10 sales. 2.3:1 ratio

Months of Inventory projected to be 3.5 this March

Average days to sell are now 37

2 out of 3 of those indicators illustrate a balanced market and one shows a sellers market.

This had the following effect on prices:
Three month average price stable to increasing from the fourth quarter 2016 at 1.46 million to 1.65 million so far this month
Median price stable to increasing from 1.11 in the last quarter million to 1.35 million so far this quarter.

Oak Bay may be an interesting market to watch if the months of inventory, rate of new listings and days to sell continue to increase as they have this month. As the market may be transitioning into a soft or bear market. That might be advantageous in the months to come for those wanting to exit the Gordon Head neighborhood were prices are extreme and inventory is short.

Dasmo
March 22, 2017 2:50 pm

Problem is that the adjustment to the fundamentals will most likely be hyper inflation…. Then twenty years from now this 40%/year increase will look like 4%…..

Introvert
Introvert
March 22, 2017 2:37 pm

Any asset class ultimately performs in accordance with its fundamentals, whatever they are.

Fundamentals can change. See: Vancouver.

Does Victoria have the necessary fundamentals to pull off perpetual gains or grow to truly enormous prices relative to fundamentals and stay there? No, and no.

3.74% real average annual gain over many decades seems pretty perpetual to me. I bet it’s also one of the best long-term appreciation rates of any city in Canada.

Richard Haysom
Richard Haysom
March 22, 2017 2:32 pm

Well, thanks to no change to the Capital Gains Tax, I for one will be putting a revenue property up for sale. I wonder how many others were doing the same thing and waiting to see? Had there been a change to the tax structure it would have been a hard sell to convince myself to sell and kiss goodbye possibly tens of thousands of additional tax. The government in my opinion has made the right decision. This should encourage more listings and that’s good for the market. It will help albeit the frenzy and I won’t complain of the extra dollars I get to spend helping out the economy.

Local Fool
Local Fool
March 22, 2017 1:58 pm

There are cities in the world whose prices grew to extraordinary levels and didn’t come down. They don’t all fall. This saying comforts priced-out renters, but that’s all it does.

It probably comforts some renters, but I don’t think that’s the purpose of the statement. Shuffling off the argument with a vague breath of elitism doesn’t really make your counterpoint more credible. The “only comforts” claim is arbitrarily dismissive and simplistic, and I suspect you’re smart enough to know it.

Any asset class ultimately performs in accordance with its fundamentals, whatever they are. Does Victoria have the necessary fundamentals to pull off perpetual gains or grow to truly enormous prices relative to fundamentals and stay there?

No, and no.

I would caution against the “it’s different here, different this time” mentality. Will prices grow more? Oh, probably. The mania is still here. Do price points reached by mania represent a new floor in market pricing? No. Could it stay there for a while? Yes, the market can hold out as an equity based one, for a time. Sooner or later, it must be fed from the bottom via new entries.

There is no new paradigm here, just madness.

Introvert
Introvert
March 22, 2017 1:39 pm

Does Mike Grace still read the blog? Mike, if you read this, please tell us how common $850,000 mortgages are, in your experience. Or even any mortgages above $600,000.

gwac
gwac
March 22, 2017 1:35 pm

Alcohol only tax change. Transit tax benefit gone.

Dasmo
March 22, 2017 1:33 pm

Effect is a noun, affect is a verb 🙂 ish….

Introvert
Introvert
March 22, 2017 1:32 pm

Despite you not believing it, this has never happened before in Victoria for an extended period of time.

Doesn’t mean this couldn’t be the first time.

No one buys a house thinking of what it will be worth in 35-40 years.

We bought our house considering what it probably would be worth in 20 years.

For any newcomers to the blog, it’s important to know this context when reading Hawk’s doom-laden posts.

Yes. A few of us will continue to highlight that context from time to time, as it is important.

IMO, he’s actually quite right in concept – nothing will go up forever, and the harder it goes up the harder it must fall.

There are cities in the world whose prices grew to extraordinary levels and didn’t come down. They don’t all fall. This saying comforts priced-out renters, but that’s all it does.

Ya wanna know what kind of rate increase would kill an $850,000 mortgage?

It doesn’t matter because almost no one is taking out $850,000 mortgages. Hard as it is for you to believe, I bet most buyers of $900,000 homes take out a mortgage for less than half that amount, or pay cash.

John Dollar
John Dollar
March 22, 2017 1:26 pm

Asquith was a reasonable purchase. Assessed at $640,000 and sold at $691,000. The young purchasers researched the market for 8 months before buying and had a good understanding of values in the neighborhood and knew not to get caught up in a bidding frenzy. They bought with knowledge not with emotion.

A better location in Oaklands being just far enough away from Alexander park so that they won’t get the homeless and hard drug users passed out on their street. You should try to never buy a home within one kilometer of the downtown core. Being more than 2 kilometers from the core would be better.

Barrister
Barrister
March 22, 2017 1:25 pm

Actually, I am retired and, furthermore, never practiced real estate law. So I can’t help you with the amount of teachers buying spec houses.

What I am noticing is that houses over two million seem to not be selling. I dont have any stats on that rather it is just an impression.

AG
AG
March 22, 2017 1:24 pm

especially if it effects his bottom line

affects

Halibut
Halibut
March 22, 2017 1:22 pm

That Asquith price is a bit more of a WTF to me than Derby is, only because when we were looking two years ago that place would have been above our PCS price range. It’s also smaller, on a smaller lot, and without the suite that our place has, and that’s saying nothing about the condition.

There’s 14 SFHs under our old price limit, two of which are houseboats, while most of the rest are on streets like Cook, Quadra, Bay, and Shelbourne.

I thought we’d look back at the summer or 2015 as the top but Im sure glad we bought when we did.

Local Fool
Local Fool
March 22, 2017 1:16 pm

doesn’t seem to have been in the bizz long enough to get that rising rates blow up bubbles and cause extreme financial pain. Lack of experience makes one immune to what a real bear market is like but will find out soon.

This is a big reason why these cycles do their thing, over and over and over. Reminds me of the saying that says something like,

“By the time a child finally realizes their parent was right, they’ve already got their own child who’s convinced they’re wrong”.

Hawk
Hawk
March 22, 2017 1:09 pm

“Longer story short, I watched the market very closely and bought another brand new home for more than 50% off the price. Developers were offering cars with their new builds. Such was the fear at the time.

If you don’t follow the trend you end up like that frog in the boiling water. A 10% rate increase killed me on a $85,000. mortgage. Ya wanna know what kind of rate increase would kill an $850,000 mortgage?”

Agreed oops, AG doesn’t seem to have been in the bizz long enough to get that rising rates blow up bubbles and cause extreme financial pain. Lack of experience makes one immune to what a real bear market is like but will find out soon.

A point or two will do it just as 13% to 19% did. Same effect on income and qualifying for mortgages. Max leverage like AG has with the margin debt bomb will be nuclear.

Hawk
Hawk
March 22, 2017 1:05 pm

It’s important to know AG claims he lives in his Uplands digs playing agent stalking all the open houses while claiming he used to be in the banking business but is worth multi-millions all on non-insider info and no silver spoon. Bank tellers don’t make big dough without being in the know.

Still waiting to see an intelligent post out him, it’s all slags when evidence of the bubble popping is presented, especially if it effects his bottom line. The thought of losing millions doesn’t sit well I guess.

oopswediditagain
oopswediditagain
March 22, 2017 1:02 pm

Hey Hawk, I mistimed that 80’s market, somewhat.

In 1979 I bought my first house for $48,000. A small (1000 sq.ft.) rancher, alcan siding, no carport or garage. Lol. Within a year and a half the price on that home climbed to $108,000. Being an incredibly bright “bull”, I sold and upsized to a brand new split level home with all the bells and whistles.

Now, mortgages were just starting to climb (11%) and my realtor thought it would be smarter to take out a one year mortgage with the builder until rates came down.

Yada Yada Yada …….. I kissed the buyer of my new home because he left me with $10,000.

Longer story short, I watched the market very closely and bought another brand new home for more than 50% off the price. Developers were offering cars with their new builds. Such was the fear at the time.

If you don’t follow the trend you end up like that frog in the boiling water. A 10% rate increase killed me on a $85,000. mortgage. Ya wanna know what kind of rate increase would kill an $850,000 mortgage?

http://www.cbc.ca/news/business/transunion-debt-interest-rates-1.3759844

The US Fed will be increasing rates further this year which will push our bond yields here up higher and mortgage rates will climb.

Buy smart and well within your means.

TallGuy
TallGuy
March 22, 2017 12:58 pm

Just trying to wrap my head around 962k for 1498 Derby. Assessed at 741. Yikes

No exhaust fan over the stove…better get that inspected…

Richard Haysom
Richard Haysom
March 22, 2017 12:57 pm

Barrister,
How many teachers have you closed for lately?!! We could use a heads up!

Local Fool
Local Fool
March 22, 2017 12:32 pm

He might have timed the market well back in the 80s, but his most recent effort at market timing has been a disaster.

Ok, I get what you mean. And you didn’t even need to use crayons. And I just started two sentences with “and”.

Timing is a dangerous game, which I have done myself occasionally. In a bull market though, it’s so easy to point the finger at others who cashed out – everyone who stayed in is a genius, to paraphrase.

If this board were around back in the early 80’s, his cash-out move would probably make you a great deal more interested in his subsequent forecasts. In a market that seems unstoppable though, people just laugh. Ahh, humans. Gotta love them.

I don’t think his overall premise is without merit. IMO, he’s actually quite right in concept – nothing will go up forever, and the harder it goes up the harder it must fall. I suspect you know that, too.

It’s just a question of when. If only I knew – but one thing I can say, I am far too risk averse to play in this market, regardless of how much I might make. Foolish? Perhaps. But I’m pretty comfortable with my choice. 🙂

Ash
Ash
March 22, 2017 12:27 pm

Just trying to wrap my head around 962k for 1498 Derby. Assessed at 741. Yikes

Ash
Ash
March 22, 2017 12:24 pm

Asquith went for 691k. That’s proving to be the range for a home in that area bordering on tear down status or needing substantial work.

AG
AG
March 22, 2017 12:16 pm

So what am I missing here?

Hawk sold his house a few years ago because he thought the market was going to crash. He might have timed the market well back in the 80s, but his most recent effort at market timing has been a disaster.

For any newcomers to the blog, it’s important to know this context when reading Hawk’s doom-laden posts.

Local Fool
Local Fool
March 22, 2017 12:00 pm

Was there a timeline on that chart? I didn’t spot one.

I don’t see how that makes a difference, really. He claims to have sold back in ’81 at the peak. Objectively, that was a good time to sell. You are claiming he would have sold years before that, which would not be.

The market cycle has gone though a few iterations since that time. So what am I missing here?

Iggy_12
Iggy_12
March 22, 2017 11:59 am

Anybody know what 2649 Asquith sold for?

AG
AG
March 22, 2017 11:47 am

That doesn’t even make sense. If he sold at the peak in ’81, then that was a different cycle than now. Good for him for getting out when he did.

Was there a timeline on that chart? I didn’t spot one.

AG
AG
March 22, 2017 11:46 am

@ Barrister

Rather like Joe Kennedy’s tip from before 1929:
“You know it’s time to sell when shoeshine boys give you stock tips. This bull market is over.”

Local Fool
Local Fool
March 22, 2017 11:45 am

Thanks Hawk. I updated that chart for you.

That doesn’t even make sense. If he sold at the peak in ’81, then that was a different cycle than now. Good for him for getting out when he did.

Conversely if you bought property within the last year or two and plan on holding it for a few years, my guess is you won’t do as well. Longer term, who knows. No one buys a house thinking of what it will be worth in 35-40 years.

James Soper
James Soper
March 22, 2017 11:42 am

@db vegas didn’t go bust because they kept re-inventing themselves. Detroit on the other hand.

Barrister
Barrister
March 22, 2017 11:40 am

My father used to say that when the real estate agents start to buy spec houses you really need to worry and when the teachers get into the market it is really time to get out fast.

AG
AG
March 22, 2017 11:35 am

Thanks Hawk. I updated that chart for you.

http://imgur.com/a/Ke70P

Richard Haysom
Richard Haysom
March 22, 2017 11:30 am

Hawk, just to be clear, are you predicting home prices to fall 40% in Victoria? Perhaps to be more accurate, prices to fall back to which market level, say mid 2015, early 2014?

Hawk
Hawk
March 22, 2017 10:49 am

AG, it’s great to hear first hand from someone who got sucked in at the top. It’s a long way back down to the mean. Like 40%. That will be a major OUCH for you. 😉

http://2.bp.blogspot.com/-ZWsQNhB12M4/Tf161ZP8iFI/AAAAAAAAAu4/iEFXxNao1KU/s1600/800px-Stages_of_a_bubble.png

AG
AG
March 22, 2017 10:26 am

Until you’ve sold Intorovert you’ve made nothing, draw a 40% drop on your chart like 1981 and you’ll soil your yourself.

Hawk – if prices dropped 40%, would your house be back to the price that you sold it for?

John Dollar
John Dollar
March 22, 2017 10:11 am

The third day into Spring Break and we have 85 new listings versus 103 sales in the last 3 days.

Are you more likely to buy a house or list your home for sale during spring break?

Local Fool
Local Fool
March 22, 2017 9:33 am

Lets hope Justin taxes the shit out of the speculators, long overdue.

Ontario did that in the 1970’s, and it apparently worked like hellfire. It was later rescinded. Personally, I think they should bring it back and keep it on the books.

We’ll see when the federal budget is released.

Hawk
Hawk
March 22, 2017 9:28 am

Local Fool,

Isn’t it funny how the local rags can never write an article on how speculation markets can be dangerous, and throw some caution to the wind ? Nope, it will upset advertisers and sponsors so they will leave it to the bloggers. At least the Province and Sun has some balls to write the reality.

Lets hope Justin taxes the shit out of the speculators, long overdue.

Hawk
Hawk
March 22, 2017 9:23 am

“Underestimate Victoria real estate at your peril. Hawk is living, annoying proof of that.”

Until you’ve sold Intorovert you’ve made nothing, draw a 40% drop on your chart like 1981 and you’ll soil your yourself.

Fools and their money is always soon parted at market tops and arrogance knows no bounds.

Dasmo, the market is margined to the hilt beyond 2000 tech bubble. Did you miss the credit chart I’ve posted ? This is a keg of dynamite about to blow when you least expect it.

http://realinvestmentadvice.com/wp-content/uploads/2017/03/Margin-Net-Credit-Debt-031717.png

Local Fool
Local Fool
March 22, 2017 9:15 am

A new Globe and Mail article. I think this has a lot of parallels with what we’re seeing here on the west coast.

Speculators super-heating the Toronto real estate market

Investors could be responsible for a chunk as large as 25 to 30 per cent of all sales in the GTA, according to the special report by Realosophy Realty Inc.

People began moving from the time-honoured principles of real estate investing – that the cash flow from renting out the property should cover the expenses – to the assumption that it was okay to lose money every month because bigger gains would come from the sale of the property later on. “This is one of the big red flags that economists point to in terms of housing bubbles.”

…the biggest surge in the zeal for rental properties was found in Durham Region, where demand has increased more than 400 per cent in about four years in such areas as Whitby, Ajax and Oshawa.

The number crunching also reveals that approximately 95 per cent of investment properties purchased in 2016 are losing money every month, which suggests that the buyers are counting on price appreciation to produce a profit.

Many foreign buyers are paying cash for all or most of the purchase. Many domestic investors, by contrast, are using debt. Many borrow against the equity on the principal residence to come up with the down payment for their investment properties.

…this intense investor behaviour is typical of an expanding bubble. It not only prices out regular buyers…but sets up the potential for a correction that will affect all property owners.

http://www.theglobeandmail.com/real-estate/toronto/investors-super-heating-the-toronto-market/article34380897/

Dasmo
March 22, 2017 8:38 am

But yes db, we should be alarmed that this market is boiling over. Perfect analogy!

Dasmo
March 22, 2017 8:35 am

Yes Leo, the stock market now doesn’t look like 2000. Price over earnings is high but not crazy outside the norm.
As for exponential growth, let’s consider wages as the food source. What happens whith exponential growth when the food source is limited? Anyone? Anyone?

AG
AG
March 22, 2017 8:34 am

Leo, I believe you when you say that affordability is within the long term range. But is that just for an average dwelling, or is it for land? The larger number of condos these days might be distorting the numbers.

Give the greater (and increasing) pressures on land availability, I would expect the affordability band to trend upwards over time, at least in relation to land values.

Richard Haysom
Richard Haysom
March 22, 2017 7:04 am

db
Your boiling water analogy is a good one. I’ll add a couple of additional thoughts.
I think the financial crisis of 2008 kiboshed a lot of people’s plans, ie retirement planning and now there is this sudden onslaught of catching up which started approx. 2015 and now is fever bent, your 4:30 reference. Add to that current strong economic conditions in Victoria, low unemployment etc. Finally I think the “value” of our money is eroding again similiar to your boiling water. The Canadian Dollar is going the way of the Lire. Things that used to be priced in tens of dollars are now in the hundreds and sometimes into the thousands. In 1972 a brand new Plymouth Duster (considered a hotrod) was$3,200. Minimum wages in 1965 for all provinces was less than $1/hour. Imagine earning $5-$8 for a day’s work.

db
db
March 22, 2017 5:56 am

I’ll explain the madness…It appears madness for the same reason Dr. Bartlett explains it if you delve into what is happening..

Let me give a very simple example..

If you turn on the kettle for a morning cup of coffee or tea (boil water). You are applying a constant amount of heat (after initial startup, ie. compounding effect) to a fixed volume (ie, land). If you stand there and watch it, you will see constant growth eventually heat up the pot of water in 5 minutes. Boring and slow. You may as well leave the room and go watch TV. But if your wife walks into the kitchen at 4 minutes and 30 seconds, she is going to be alarmed because the water is boiling over. It’s perceptions.

Same thing happens to a pond owner that plants a lily. the first 10 years every doubling effect is gradual. the 14th year, the pond is half full. when is it going to be full?
Now that seems self evident.

But the same thing happens to any gradual compounding effect…it eventually goes hockey stick.

As far as real estate is concerned, due to our lifespan, we are the wife walking in at 4:30 .
If you look at Vancouver Real Estate and consider the price of a square foot of land. It continues to increase because the buildup is VERTICAL. Hi-rises raise the ROI per square foot as density takes its toll.
If you look at the US, since 1776, the 13 states have certainly grown in price. I don’t think the Indians are going to accept a string of beads for Manhattan anymore 😉
If you look at Dubai or China since 1999, you will get the same effect.

If you look at Leo’s graph, you will see what appears to be big swings, yet when you look at the actual nominal price chart it appears like the water boiling in the kitchen.

Maybe the last 2 years just caught back up with the long-term trend.
Something to think about.

The CRD projected 1% population growth back in 2000. Like the application of heat on water, there is an expanding effect.

I had plenty of reasons to think Las Vegas would go bust; Atlantic City, legalized gambling, Indian Casinos, Water shortages, On-Line gambling, Macau….and yet?

Lurkess
Lurkess
March 22, 2017 1:27 am

@Rook, in same boat as you…

totoro
totoro
March 21, 2017 11:10 pm

The counterpoint which was already made last time is that this obviously cannot continue forever.

Except it has continued for at least 57 years. That is some track record. People base expected stock market returns on long-term data so I’m not sure why houses would perform differently long-term. I do agree there is madness in the market right now.

I had opportunities to buy decent homes in my price range in 2015 and not a day goes by without me regretting not buying before this big boom. Back then MOI was sky high and prices seemed still a little high to me.

Sorry to hear this. I remember 2015, it did not seem like a good time to buy. Most thought prices would fall.

Vicbot
Vicbot
March 21, 2017 11:05 pm

Further to the discussion on how the math works …
$1,170,000 is 170% of $684,600, or $1,170,000 is 70% higher than $684,600.

Similarly:
$888,000 is 141% of $630,000, or $888,000 is 41% higher than $630,000.

Dasmo
March 21, 2017 10:08 pm

I would never recommend selling with the intent to make money and buy back in later. That is also speculation and just like shorting stocks it has an infinite downside.
But I can’t think of a worse time to buy. But as my dad used to say, Opportunity knocks once many times.

Ash
Ash
March 21, 2017 10:07 pm

$258,000 in less than two years? Hello!

This is why I think the market can keep going just a little longer than one would expect. Owners wake up to realize they’ve been gifted the easiest money they’ll ever see, so some move up the ladder and effectively buy even more real estate. Like the sellers of 2820 Scott who made ~$250 in 18 months. They can now justify to themselves paying a million for a very average place in Fairfield/OB.

At some point this comes to an end, but there’s still some legs to this market.

Vicbot
Vicbot
March 21, 2017 10:01 pm

“Vicbot if you want to believe that prices have gone up by 170 percent in two years ”

John, re-read it – I didn’t say that. I said “sell price over 2016 assessed is 170%” (for 1 house)

Try to read my words, not your own alternative thoughts.

Local Fool
Local Fool
March 21, 2017 9:33 pm

Approx 3.7% real annual appreciation. The counterpoint which was already made last time is that this obviously cannot continue forever.

House prices will generally track inflation and wage growth and where they don’t, they will eventually snap back. In recent times, that tendency has been disturbed by interest rates that are among the lowest in recorded history, and so people have substituted the wage component with the acquisition of debt. Huge amounts of it, in fact.

I don’t see an inherent issue with using leverage to acquire wealth, but IMO what is happening now is people are using that leverage to speculate – and in the Canadian RE context, I think that’s unsustainable and possibly even dangerous.

db
db
March 21, 2017 8:44 pm

https://www.youtube.com/watch?v=LqcHG7QUK9k

I hope you enjoy Dr Bartlett’s 10 minute growth lecture.

(it explains why people have a hard time adjusting)

db
db
March 21, 2017 8:26 pm

Leo

Thanks for the link.

I see that it also projected in the near 800,000 range for 2017?

And I believe you are using an inflation adjusted return? How does that work going forward if inflation rises? (and what CPI is realistic?)

Conundrum…

Gwac
Gwac
March 21, 2017 8:25 pm

I think the big correction in 1980 is inflation adjusted. If you adjust for the huge inflation back than the correction looks deep.

Introvert
Introvert
March 21, 2017 7:36 pm

That is false. Victoria had a major correction in the early 1980’s, which took many years to recover from – and a mild correction/stagnation in the late 2000s.

Those “corrections” don’t look very scary on the graph I posted.

db
db
March 21, 2017 7:30 pm

Since Introvert was kind enough to plot that Average R.E. chart , please take a gander and consider my numbers again…You cannot refute a straight line methodology (logarithmic for % returns)

Start at 1977 and use a 7% compounding factor…to make it simple for you; the rule of 72 says it doubles every 10 years…it has been 40 years.

So ask yourselves where it puts you on a trendline.

Have we just caught up with the 7% ROI ? (I seem to recall that being the expected rate of return on R.E from my younger years).

If that is the case…what is the basis of anyone’s BUBBLE thoughts?
I recall a friend insisting in 2000 that R.E. was overvalued in Victoria because rents did not support the valuations and the elderly will downsize…..that didn’t work out so well, did it? and so it goes…

I am simply pointing out one factor…and do remember, it’s the land value that is the critical component of R.E. Valuation (particularly land-locked land).

Local Fool
Local Fool
March 21, 2017 7:08 pm

But it’s not the first time insanity has visited Victoria real estate, and prices never corrected in the wake of those other insane times.

That is false. Victoria had a major correction in the early 1980’s, which took many years to recover from – and a mild correction/stagnation in the late 2000s. There may be others, but those are the two that immediately come to mind.

Introvert
Introvert
March 21, 2017 6:59 pm

What would it be today if you bought the same place with the same down payment? That drives home the insanity for me.

Leo, I agree that it’s insane. But it’s not the first time insanity has visited Victoria real estate, and prices never corrected in the wake of those other insane times.

Introvert
Introvert
March 21, 2017 6:52 pm

Underestimate Victoria real estate at your peril. Hawk is living, annoying proof of that.

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

Dasmo
March 21, 2017 6:40 pm

That one would be way to obvious to start up on…. plus I admit to having a c- in grammar….

VicRenter
VicRenter
March 21, 2017 6:38 pm

What’s up with houses on Blenkinsop Rd this year? 3708 Blenkinsop: assessed at $677,000, asking $775,000, sold for $912,000. This is the 3rd sale in a month or so on that (busy) street that I’ve been surprised by.

Introvert
Introvert
March 21, 2017 6:25 pm

Year over year price increases for houses in the core are:
2015 $630,000
2016 $751,000 a 19.2% increase
2017 $888,000 an 18.2% increase 3 months of 2017

2015 to 2016: up $121,000
2016 to 2017: up an additional $137,000

$258,000 in less than two years? Hello!

Oh my god don’t start the grammar discussion again.

I’m not touching it. Irregardless has chastened me somewhat.

Hawk
Hawk
March 21, 2017 6:19 pm

Rook, it’s always darkest before the crash. The last guy who bought your next rental will be stuck for the next 10 years.

Any market where tenants have to fear it going up for sale at any time is a speculation market that always blows up.

Dasmo
March 21, 2017 5:56 pm

John, it’s just the start of 2017. Aren’t you’re numbers for the year?
Even if you just consider that we are up 18% just in the first three months of the year! It’s crazy….

Gwac
Gwac
March 21, 2017 5:51 pm

John don’t worry you can tell us Thursday the new listings to sales has surged from tues and wed.

John Dollar
John Dollar
March 21, 2017 5:42 pm

Chill-lax

Look what just a few hours today have done when Marko said this in the morning.

45 pending sales in last 24 hours and only 25 new listings…..what da.

and now this afternoon it is 42 pending sales and 35 new listings in the last 24 hours. Things can change quickly.

John Dollar
John Dollar
March 21, 2017 5:25 pm

Vicbot if you want to believe that prices have gone up by 170 percent in two years and Dasmo wants to believe that they have gone up 40 percent in one year then both of you go right ahead.

But I am telling you they have not.

Primary Year Sale Price, Median house in the core districts
2014 $582,000
2015 $630,000
2016 $751,000
2017 $888,000

Gwac
Gwac
March 21, 2017 5:18 pm

55% in the core, 57% pen, 32% west shore priced over a 1m

Rook
Rook
March 21, 2017 5:06 pm

Dasmo ‘Every buyer out there list to me. R….E….L….A….X….. just stop. Don’t buy anything.’

I am currently a ‘don’t buyer’, though it pains me. Everyone around me sends me links to complete disasters of homes, insisting that it important that I just get in. This market is just to insane for me though. With all the instability that is going on in the world markets, subprime rampant in Canada, and weekly a new economist from a big bank or some other smart dude/et with wide eyes and growing pockets calling the housing market red, I feel to risk adverse. My downpayment has taken me my life to save and I can’t for the life of me buy a complete shit box with it.
I had opportunities to buy decent homes in my price range in 2015 and not a day goes by without me regretting not buying before this big boom. Back then MOI was sky high and prices seemed still a little high to me.
I really don’t see the craziness in the market lasting a ton longer and a correction of some sort seems due in the future. My daily anxiety is that I’m wrong. A lot of factors could keep this thing going (of which I believe our elected officials have a duty to squash), and a lot could end it tomorrow.
In the meantime, I’m off to pack up my things and haul my family into yet another rental house. I’m guessing only to being evicted yet again within the year.
What is all your least favourite things? The dentist? Tax season? Mine: Moving.

But you are right Dasmo, I can just go camping and relax on a beach. We are pretty blessed to be living where we do. Although it’s expensive and some of us have to move lots, we are not moving our families into refugee camps as we flee from government bombing and a vast amount of other scenarios people live out everyday.

Dasmo
March 21, 2017 4:50 pm

@ John Dollar, you are also disguising the brutality. We are at the start of 2017. $630,000 is the end of 2015 to $888,000 which is at the start of 2017. This is a whopping 40% increase in just over a year!!!!

Vicbot
Vicbot
March 21, 2017 4:44 pm

OK for Gawd’s sake John, why do you find it necessary to exaggerate and misrepresent what I said?!

I was not “embellishing” or being “enthusiastic” about this inflated market – gimme a break. No wonder db said it was antagonistic around here.

I used basic math to compare the last 2 property assessments and the sales price, nothing more, nothing less. I also mentioned GH & Blenkinsop, not Langford. Quit misrepresenting my posts.

You have to be realistic about what’s happening out there – that’s exactly why CMHC & TD are raising alarm bells.

The simple fact of the matter is that property assessments went up between 25-40% in the core as of Jan 2017 (reflecting July 2016 date), then house prices have reflected those increased assessments in 2017, and then sold prices are often still above those, especially GH.

John Dollar
John Dollar
March 21, 2017 4:24 pm

Prices have increased Vicbot but why do you find it necessary to embellish the numbers.

Year over year price increases for houses in the core are:

2015 $630,000
2016 $751,000 a 19.2% increase
2017 $888,000 an 18.2% increase 3 months of 2017

I understand your enthusiasm but your post is alluding to a 170 percent increase in two years. And it most certainly isn’t the same for everywhere in the Capital area.

Year over year increase for Langford and Colwood

2015 $489,500
2016 $549,900 12.3%
2017 $628,650 14.3%

It’s important to understand that the market increases in prices are NOT uniform for all properties and all areas. Your posts is looking at one of the hottest neighborhoods in the capital area and extrapolating that the same is true everywhere. And it isn’t.

The actual price increases over the last two years are very impressive. It isn’t necessary to embellish them.

Dasmo
March 21, 2017 4:03 pm

Fairfield I get more than the Mount Tolmie area. Fairfield has nice streets with mature trees, sidewalks and a green buffer between the sidewalk and all those cars. Nice character houses
houses built in the era of quality bones everywhere. Walk to beacon hill park, the beach, downtown, the village. The fact it’s half students in basement suites helps it from being too stuffy. There has been million dollar homes there for a long time. That tear downs in GH are suddenly fetching a million is a bad sign…. It wouldn’t be so bad if your typical hard working dual income family was making over $200k a year. but it’s more like $100k….

Vicbot
Vicbot
March 21, 2017 3:54 pm

Rather than focusing on disagreement, I’d rather find some common ground, John. I think we both agree that prices have increased exponentially in both 2016 & 2017, and that this market is at least partly driven by speculation. This is happening throughout all neighbourhoods as far away from town as Gordon Head & Blenkinsop.

On the changes to that house, we’re just disagreeing on the cost. The main kitchen is original. The renos were more like $15k for the basement kitchen (refurbished mismatched cabinets, new appliances) & main bath countertop. Paint and staging is maybe $6-8k if they hired painters. If they enclosed the back deck in the 90s, that would have already been taken care of in earlier assessments.

Barrister
Barrister
March 21, 2017 3:39 pm

I always did dream of living on a neighborhood of million dollars homes; just near thought it would be Fairfield. Seems every second house has a basement suite which sort of accounts for all the cars parked in the street.

John Dollar
John Dollar
March 21, 2017 3:08 pm

And my point Vicbot is that the example you gave is not common. At least a hundred grand more in price due to the renovations and the time frame is more like 3 years than 2.

Vicbot
Vicbot
March 21, 2017 1:36 pm

The PDF describes a pretty typical cost of ownership over the entire life of the home. The upstairs kitchen is still from the 1940s. Most homes built in 40s/50s have a basement bathroom, bedroom, added insulation, and a gas furnace. The only thing that looks relatively new is the basement kitchen.

The point is the acceleration of prices over 2 years that is common around Greater Victoria right now.

gwac
gwac
March 21, 2017 1:31 pm

Not posting the star article because I believe or think it can be justified. Just fun to watch the balloon be pumped with an air compressor.

I do not believe Victoria is in the same boat as Toronto from a speculative frenzy.

https://www.thestar.com/business/2017/03/21/toronto-house-prices-may-jump-25-this-year-report.html

John Dollar
John Dollar
March 21, 2017 1:19 pm
John Dollar
John Dollar
March 21, 2017 1:16 pm

Is it even possible for “people in general” to pay over market value? If “people in general” are willing to pay a certain price then that looks a lot like the market value.

But they are not paying over market value. They are paying over asking price. The asking price being set well below the market value to elicit multiple bids.

caveat emptor
caveat emptor
March 21, 2017 1:05 pm

In general people are paying over the asking price but they are not paying over market value.

Is it even possible for “people in general” to pay over market value? If “people in general” are willing to pay a certain price then that looks a lot like the market value. Individual sales over market value happen when you have a highly motivated buyer, or an uninformed, unlucky, or stupid buyer.

Vicbot
Vicbot
March 21, 2017 1:03 pm

The owner of 224 Robertson staged the home, painted, bought new appliances, and a new bathroom countertop. They might have added some new vinyl to the basement, but it was cosmetic and relatively inexpensive.

John Dollar
John Dollar
March 21, 2017 1:00 pm

Although Hawk, the “Vancouver” buyers are not falling for the BS like they did before. There are some irrational prices being paid but most of the buyers are not going crazy in their bids.

And I think it’s likely because these out of town buyers are not the rich elite but the poor ones that have been priced out of cities like Vancouver and Toronto. They are just as tapped out on funds as most of the locals.

Hawk
Hawk
March 21, 2017 12:55 pm

“I think by now most of us understand that if the agent can create an auction by underpricing the property they can elicit multiple offers in a short time period that could mislead someone into over paying for a property.”

Exactly John, it’s a matter of how much can they sucker out of the Vancouver buyers pockets before the bottom falls out. A buyers strike as Dasmo suggested makes the most sense but the sheep have no willpower.

John Dollar
John Dollar
March 21, 2017 12:54 pm

2016 assessed $684,600. 2017 assessed $947k. 2017 ask $998k. 2017 sold $1,170k.
Sell price over 2017 assessed 123%, but sell price over 2016 assessed is 170%

Let’s get some of those dates more accurate. The 2016 assessed value is at July 1, 2015. The 2017 is at July 1, 2016. The sale price is the current date of March 2017

And most importantly the owner remodeled the home and judging by the low value that BC Assessment has on the improvements it doesn’t seem the assessed values included the renovations. That makes the current price one for a remodeled home but the assessed values are that of a 1940’s house.

Hawk
Hawk
March 21, 2017 12:46 pm

“I was at the open house on Sunday, which was very busy, and the Realtor exclaimed for the hordes to hear: “the silver tsunami has arrived! Vancouver people are here and they all want to live in Oak Bay or Fairfield!””

Ring the bell, another market top sign when they have to single out the Vancouver buyers to hype the bid. More agents with no ethics.

John Dollar
John Dollar
March 21, 2017 12:40 pm

What would a 6,000 sq.ft. flat, clear, quiet location lot in East Fairfield be worth in this market?

That’s a hypothetical question as there are no vacant 6,000 square foot lots in East Fairfield.

You would have to buy an improved property and demolish the home. Since you are now going to compete with builders and people wanting a home to live in you will pay a premium price for the property. A price that might not be fully recoverable if you built a home and had to sell immediately.

That seems to be fine for most people that plan on never selling. However, properties eventually sell through death or infirmity.

There is a difference between what a property is worth and what you will have to pay when it comes to infill housing lots in East Fairfield. For infill housing the land is worth what a builder would sell a hypothetically completed home for today less the cost of constructing that home allowing for a reasonable profit.

There are a couple properties with older houses listed for sale but that’s not going to help since they are being auctioned. The list price therefore has no relevance.

So instead let’s look at what new houses have sold for in the area less a cost to construct of $250 a square foot.

1456 Hamely sold at $2,026,500 for a 3,074 square foot new home. That would make the residual value for the lot $1,258,000 for a 7,542 square foot lot. Sounds a little high to you?

931 Bank Street sold for $1,450,000 less estimated construction cost and normal profit at $806,000 leaves a lot value of $644,000 for a 5,200 square foot lot.

The cheapest improved property sale was at 1903 Brighton for a 100 year old home that sold at $775,000. for a 4,200 square foot lot. A remodeled home that is very livable.

If you want to buy land, build a home and then sell it for a reasonable profit you are looking at $650,000. If you want to buy a property, build a home and live in it tell you die then you’re looking at paying over $750,000.

Of course there is always the Hamley sale, but I doubt that anyone seriously believes paying $1.3 million for a lot is reasonable.

Local Fool
Local Fool
March 21, 2017 12:07 pm

What this indicates is an extreme market, not driven by local fundamentals

What this indicates is a bubble, not driven by any fundamentals – local or otherwise.

A healthy, sustainable RE market doesn’t go up by this much in such a short period of time, folks. It’s that simple. It’s not “different here” or “different this time”. And the harder she goes up…

Grab the popcorn, ladies and gents. This is going to be an interesting show. Speaking of popcorn, has anyone ever had the Jalapeno Jack popcorn from Kernel’s? I can go through a party bucket of that in almost one sitting. 😀

Reasonfirst
Reasonfirst
March 21, 2017 11:44 am

Between 1891 and 1911 Vancouver’s population grew by over 600%. It was different that time! 🙂

Vicbot
Vicbot
March 21, 2017 11:43 am

What’s interesting is how sales-to-assessed has jumped since 2016 assessments, and it’s only March 2017.

eg., 224 Robertson St,
2016 assessed $684,600. 2017 assessed $947k. 2017 ask $998k. 2017 sold $1,170k.
Sell price over 2017 assessed 123%, but sell price over 2016 assessed is 170%.

This seems to be a “trend” in all areas. Even though assessed values went up sharply 25-30-40% , prices are still increasing.

What this indicates is an extreme market, not driven by local fundamentals, as CMHC & TD have stated in Rook’s & Hawk’s links below (or as Richard, Dasmo, & others pointed out, the start of an inflationary period).

Also, given the low inventories, demand is outstripping supply for more reasons that just population growth. As Rook said, let’s wake up and see the speculation in the market – local, national, & international.

Richard Haysom
Richard Haysom
March 21, 2017 11:40 am

What would a 6,000 sq.ft. flat, clear, quiet location lot in East Fairfield be worth in this market?

John Dollar
John Dollar
March 21, 2017 11:05 am

Luke you might be surprised to know how many properties sell at or below asking price too.

I think by now most of us understand that if the agent can create an auction by underpricing the property they can elicit multiple offers in a short time period that could mislead someone into over paying for a property.

How much over market value is important not how much over asking price. So we should be able to compare the sale price/list price ratio to the sale price/assessment ratio to see how effective these auctions are or are not for houses in Saanich East, Victoria and Oak Bay.

Month Sale Price to Original Price Ratio Sale Price to Assessed Value Ratio
Jan 102.4% 127.1%
Feb 102.2% 125.7%
Mar 102.8% 123.8%

Agents are getting about the same over asking price for the last three months. However, the sale to assessment ratio has declined. And that may be one of the reasons why the median price for houses has declined despite the mania people have of reporting over asking prices. In general people are paying over the asking price but they are not paying over market value.

Marko Juras
March 21, 2017 10:52 am

45 pending sales in last 24 hours and only 25 new listings…..what da.

Luke
Luke
March 21, 2017 10:34 am

224 Robertson St in Fairfield East. Listed at $998k went for $1,170k.

I was at the open house on Sunday, which was very busy, and the Realtor exclaimed for the hordes to hear: “the silver tsunami has arrived! Vancouver people are here and they all want to live in Oak Bay or Fairfield!”

Thought that was a bit strange for him to say, but I guess it worked with the house selling over asking just a few days on market.

The house was in a great location just a short walk to Gonzales Beach, but it was not a great house at all – chopped up floor plan, original kitchen cabinets from 1940, ugly small dated bathrooms, low ceilings in the basement, and zero privacy.

Michael
Michael
March 21, 2017 10:30 am

However, the prewar boom was not to last. Between 1913 and 1915…

I highly doubt we’ll see another World War ~10 years from now.

Irregardless
Irregardless
March 21, 2017 10:17 am

Michael, what do you call what happened next?

The beginning of the previous inflationary cycle was perhaps even more interesting.
By 1893, a lot in the same area sold for $1,100, and, by 1900, an adjoining lot went for roughly $4,250. Incredibly, by 1912, – at a time when wages were roughly 50 cents an hour, and a tailored suit cost less than $40 – a lot in the very same area was worth $725,000.
http://thedependent.ca/featured/land-destiny-history-vancouver/
Now that’s what you call hot out of the gates.

However, the prewar boom was not to last. Between 1913 and 1915, following the U.S. stock market collapse, and resultant worldwide depression, Vancouver’s real estate bubble burst for the first (and possibly only) time; suddenly, commercial rents declined by 50%, and ordinary working people, no longer able to meet their obligations, defaulted on their loans. The city of South Vancouver went into receivership. The market was decimated. In fact, there is one recorded instance of a corner lot on Cambie and Broadway being listed for $90,000, and eventually selling for less than $8,000.

John Dollar
John Dollar
March 21, 2017 10:03 am

What should we expect as a typical increase in sale volumes for detached houses in Saanich East, Victoria and Oak Bay and how might that effect median prices?

Back in 2012, sale volumes between February and March increased by 6.7%. And as follows for the next four years. And what I have projected based on the average sales and new listing per day so far this March.

2012 6.7%
2013 23.5%
2014 6.4%
2015 37.8%
2016 39.9%
2017 projected at 32.3%.
The projected increase for house sales in the Victoria, Saanich East and Oak Bay will be above the five year average of 22.9%

New listings increased at these rates
2012 10.8%
2013 17.7%
2014 24.7%
2015 12.8%
2016 42%
2017 projected at 46.8%.
More impressively is that the projected increase in new listings will above the five year average of 21.6%. And will be a five year high increase in new listings from February to March.
This is consistent with economic theory that as prices increase more people will choose to sell and supply will increase.
As the difference in sales and new listings increases the less stable prices become and will either increase or decrease. In 2015 sales increased by 39.9% while listings lagged at 12.8%. That led to an increase in the median price of 6.7% between these two months.

This year new listings at 46.8% are projected to outpace sales at 32.3%. That should lead to a decrease in the median price. Last month the median price for houses in these three areas was $925,000. As of today the median price is $912,000.

Hawk
Hawk
March 21, 2017 9:59 am

Well Mikey, keep living on Fantasy Island looking for da plane, but many will be in tough when rates go up just one point, let alone the coming 3 points.

Almost a million Canadians couldn’t handle a 1-point interest rate rise, TransUnion says

Almost a million Canadians wouldn’t be able to handle even a one percentage point increase in the interest rate they pay on their debts, new research says.

According to a report from credit-monitoring firm TransUnion, 26 million Canadians have some form of debt, including mortgages, lines of credit, and credit-card debt. The average debtor, the company says, has 3.7 different credit products.

Average Canadian owes $21,348, Statistics Canada says
Company research released Tuesday says that roughly 718,000 of those people wouldn’t be able to keep their financial heads above water if their interest rate went up by as little as 0.25 percentage points.

And another 253,000 on top of that would go under if the rate they must pay on their debt increased by a slightly larger amount — a full percentage point.

“It is unfortunate almost a million Canadians would struggle if mortgage interest rates increased even a small amount,” said Jeffrey Schwartz, executive director of Consolidated Credit Counseling Services of Canada.

http://www.cbc.ca/news/business/transunion-debt-interest-rates-1.3759844

db
db
March 21, 2017 9:15 am

Have you ever played a home poker game where the total chips represent a max pot (say $100), but to keep the losers in the game, they are given extra chips to keep playing?

That pretty well sums up economics today…

You could be Phil Iverson, but you aren’t going home with anything more than $100. 😉

Michael
Michael
March 21, 2017 8:53 am

The beginning of the previous inflationary cycle was perhaps even more interesting.

By 1893, a lot in the same area sold for $1,100, and, by 1900, an adjoining lot went for roughly $4,250. Incredibly, by 1912, – at a time when wages were roughly 50 cents an hour, and a tailored suit cost less than $40 – a lot in the very same area was worth $725,000.
http://thedependent.ca/featured/land-destiny-history-vancouver/

Now that’s what you call hot out of the gates.

Michael
Michael
March 21, 2017 8:49 am

This is just the beginning of this inflation cycle.

Indeed, and the funniest thing people forget is that prices rise about ten-fold more in the ‘inflationary ascent’ over the next 30 years than they did over the last 30 years.

For example a $1k house bought in the 1940s became a $100k+ house by 1981, ten-fold more than the gains over the last 30 years.

http://i.imgur.com/fMnVkWQ.png

db
db
March 21, 2017 8:20 am

Out of curiosity, has anyone seen any Rent to Own situations surface in Greater Victoria?

Last one I noticed was on Quadra Street 4 or 5 years ago.

(Sounds like what the earlier advertiser was seeking with an Angel Investor).

Local Fool
Local Fool
March 21, 2017 8:03 am

I’ll change the front page. “HouseHuntVictoria: No. Just don’t.”

Perfect. 😀

Dasmo
March 21, 2017 7:56 am

I hear you Hawk. But… I’m not as negatively optimistic as you. This spring will be more stupidly without a doubt.

Hawk
Hawk
March 21, 2017 7:55 am

“Hi there Irregardless!
I think you thought I was implying that house prices didn’t drop precipitously in 1982 in Calgary? Not so, yes the average house price drop was about 40%. My point was, that CMHC held back all their foreclosures off the market which prevented the market from being significantly worse. ”

WTF is worse than 40% ??? These agents can’t truly help themselves as they spew more double talk. The market tanked, just as this one will due to mass speculation. That’s all you need to know.

CMHC wasn’t even a game changer back then as few went to them unless you were someone with disaster credit and limited funds. This time they will be with over $600 Billion in houses to carry. Its a nightmare in the making that they started telling you about last fall. So many slow learners.

CMHC issues ‘red’ warning for Canada’s housing market

“We now see strong evidence of problematic conditions overall nationally,” CMHC chief economist Bob Dugan said in a statement. “This is fuelled by overvaluation — meaning house prices remain higher than the level of personal disposable income, population growth and other fundamentals would support.”

http://globalnews.ca/news/3026944/cmhc-issues-red-warning-for-canadas-housing-market/

Dasmo
March 21, 2017 7:49 am

Um. Stock market and houses double. Personally I call that inflation. CPI long ago substituted cheddar with ezcheese. They will run out of such mechanisms soon. Eventually it catches up because employees need to revolt in order to make a living wage. OR companies need to pay more to get people to come here. Wage inflation is what will trickle the inflation into everything. This is what will pressure interest rates. So eventually they will creep up along side rising wages. This is just the beginning of this inflation cycle. It starts with crappy houses selling in run down neighbourhoods costing a million dollars. I hope this leads to official inflation otherwise it’s time to work on the bunker plans….

Hawk
Hawk
March 21, 2017 7:47 am

Dasmo, in a perfect world most people would come to their senses but this is total full out FOMO mass speculation which thousands are about to be burnt in spades. The shyster lenders are out in full force just like at the dot com bubble and the US housing bubble. Speculation markets all end badly, as this one will too.

As per the Toronto real estate show which I’m sure the Victoria one had the same message of risk free guarantees to rope in the sheep.

“Nowhere in any of this was there ever a mention of risk, the dangers of leverage, how terrible negative equity can be, how that can trap you, etc.

The amount of shadow leverage in this system is crazy. The terms on these second lien loans is 1yr. What happens when all of these loans are called? Even lenders with first positions will see clients sell when these loans become due and there is no money to pay them.

This is going to blow sky high.”

db
db
March 21, 2017 7:27 am

Fact Check – Double Check

Economic Gurus does not mean Economists 😉

On a side note 😉 ECONO – MIST like in a fog 🙂

Introvert
Introvert
March 21, 2017 7:20 am

When the States embarked on their “Quantitative Easing” all the economic gurus warned it would lead to serious inflation.

Fact check: “all” economists did not warn this. And the ones who did have been proved wrong.

Dasmo
March 21, 2017 7:10 am

Sorry Rook, it wasn’t really what you said. It just feels disgusting out there right now… if it goes another round this spring except more government intervention. I’m sure in weird and wonderful ways….

Richard Haysom
Richard Haysom
March 20, 2017 11:34 pm

Hi there Irregardless!
I think you thought I was implying that house prices didn’t drop precipitously in 1982 in Calgary? Not so, yes the average house price drop was about 40%. My point was, that CMHC held back all their foreclosures off the market which prevented the market from being significantly worse. My inference was that if the same situation arises in Victoria/Vancouver they likely would use the same strategy to prevent a major collapse of the market. Approx. half of the forclosures sat empty and half were rented out.

Rook
Rook
March 20, 2017 11:04 pm

Dasmo
Well I didn’t say “foreigners”. I guess I can see how you would make the mistake of reading a right wing nationalistic tone. But it’s simply not what I said.

Dasmo
March 20, 2017 10:59 pm

So now it’s a sort of national duty to outbid the foreigners? Scary times we live in. Scary times….

Rook
Rook
March 20, 2017 10:54 pm

Dasmo,
Ok, now say that to foreign speculative buyers. That’s where it starts, despite the reported numbers from what people write for their address on the contract.

Rook
Rook
March 20, 2017 10:48 pm

Interesting read from TD economics (do we still trust these guys?). Skip to graph 9 and 10 if you don’t feel like reading at all. Quite the correlation in foreign money and house prices.
https://www.td.com/document/PDF/economics/special/GTAHousing_Mar2017.pdf

A year from now a similar graph will show the correlation in Victoria and everyone will look at it and say, “Well would you look at that, I didn’t see that coming.”

Irregardless
Irregardless
March 20, 2017 10:32 pm

OK Richard,

That’s three of us calling bullshit on your Calgary story; any reply?

Dasmo
March 20, 2017 10:25 pm

I think the ad is an artful protest.
Every buyer out there list to me. R….E….L….A….X….. just stop. Don’t buy anything. Let’s make it the don’t buy anything year. Stay where you are, find a place to rent. Enjoy life, Go camping, go to Seattle, hang out at the beach, learn to sail. Take a year off. The bonus is, if you just all act together you can stop this. You can do it.

Local Fool
Local Fool
March 20, 2017 10:19 pm

@Vicbot,

Funny you say that; I had reported the ad as a scam about an hour ago…

Vicbot
Vicbot
March 20, 2017 10:17 pm

The regularity with which houses are selling for $150-$250k over-asking in Gordon Head, and the way the ad is focused on GH (no seriously desperate family would have to specify a neighbourhood) are also huge red flags. Something to ponder.

Richard Haysom
Richard Haysom
March 20, 2017 10:14 pm

With all these incredulous price increases and that excellent chart from the previous post showing the unbelievable price increases in Ontario, there’s been no mention of inflation.
When the States embarked on their “Quantitative Easing” all the economic gurus warned it would lead to serious inflation. Could this be the beginning of it?
With the Fed seemingly aggressive to raise interest rates and Canada likely to lag behind, the Canadian $ may well sag into the sixty cent range, attracting all the more foreign real estate investors.

Vicbot
Vicbot
March 20, 2017 10:05 pm

That ad smells fishy, similar to the wholesalers that were operating in Vancouver. They collected $ from “angel investors” and then used the cash to buy & flip homes, often with sob stories for the original home owners.

http://www.theprovince.com/business/former+wholesaler+lifts+dark+side+vancouver+real+estate+market/11771306/story.html

“Unlicensed wholesaling is an illicit and predatory business … ”

“I work with some non-licensed flippers,” one said. “They walk on to the lawn of an older house, see the owner and yell, ‘We’re not realtors!’ The owner invites them in, thinks they’re saving a commission — which they are — and loses big-time on the actual sale. I’ve seen it first-hand.”

After the offer is accepted, the wholesaler assigns the purchase contract to the investor for a 10-per-cent markup, Amanda said. But some wholesalers aren’t content with making $100,000 or more per sale.

“Amanda said some wholesale deals involve only unlicensed brokers and pools of offshore cash organized informally, and some appear to involve realtors and brokerages hiding behind unlicensed wholesalers.”

“People were going in and offering, for example, an 80-year-old widow, she bought the house for $70,000 and it is now worth $800,000 and they were offering her $200,000,” Amanda said. “So they are making $300,000 or $400,000 (after assigning the contract).”

Introvert
Introvert
March 20, 2017 10:00 pm

Oh, Gordon Head. $175,000 over asking:

1891 Hillcrest Ave
List price: $949,900
Sale price: $1,125,000

I wonder if this person reads HHV. I bet they do.

Oops. Make that “I bet he does.”

Introvert
Introvert
March 20, 2017 9:49 pm

http://www.usedvictoria.com/classified-ad/Angel-Investor_29082004

This ad is bonkers. I guess this is why every second sale in Gordon Head is $100-200k over asking.

I wonder if this person reads HHV. I bet they do.

AG
AG
March 20, 2017 9:48 pm

From that ad:
“I am one half of the hardest working couple you will ever meet, an incredibly kind person who has dedicated his life to helping others and giving everything we have away to needy folk”

If you want to give your money and time away, that’s great. But don’t expect someone to come bail you out when you don’t have any money left…

freedom_2008
freedom_2008
March 20, 2017 9:47 pm

Or they could possibly go for a townhome (even with a suite to help with the mortgage) in Gordon Head:

https://www.realtor.ca/Residential/Single-Family/17760746/13-1705-Feltham-Rd-Victoria-British-Columbia-V8N2A4

(did send the listing to them too, hopefully helps a bit)

Local Fool
Local Fool
March 20, 2017 9:36 pm

So what would be your advice for them?

I think Penguin already implied the answer – allowing these people with apparently questionable financial acumen huge sums of money they cannot truly afford would be harmful, especially in the longer term as rates rise. What they are saying they want is incongruent with the resources they have, and I suspect there’s a “buy now or never” mentality floating around somewhere.

There’s no question that being evicted multiple times is stressful and with kids, that dynamic is magnified. I doubt they’re alone in having this experience.

In my view they can either choose to wait it out and hope they can stay in their place longer term, or if they are truly desperate to own now, buy a condo.

Dasmo
March 20, 2017 9:28 pm

Uhg… so harsh.

Marko Juras
March 20, 2017 8:52 pm

This is the kind of behaviour that agents get disciplined for. You can’t prefer your own client because of the commission.

Limited dual agency in a multiple offer situation. Impossible for that to go well.

What I find interesting is the agents in Victoria that have been fined in the last year for decreasing their commission to a non-represented buyer in multiple offers and not making everyone aware.

For example, if as the listing agent you want to reduce the gross commission from $27,000 to $13,500 for the buyer without representation you have to make all other agents writing an offer aware of the discount so they have an opportunity to amend the offer. I have a large double-end discount in my listing contracts so double-ending just ends up being a ton of additional headache.

I am actually looking forward to the day dual agency is no longer. Buyers working without an agent can be great, but can also be incredibly flaky. During the course of a year it is extremely rare for a buyer I am working with not to show up to a showing. However, when a buyer (without an agent) contacts me about viewing one of my listings they don’t show up about 20% of the time….no call, no text, nothing.

It is also annoying as buyers without an agent typically don’t have a PCS account setup so they wouldn’t be aware of strata bylaws, for example. You show up to a showing and they are like….”what do you mean dogs aren’t allowed.” 🙂

Sidekick Spliff
Sidekick Spliff
March 20, 2017 8:52 pm

I had a letter through my mail slot from a private person looking to buy in the neighbourhood. Similar sounding to the ad.

Hawk
Hawk
March 20, 2017 8:24 pm

The increased posts of Bearkilla is in perfect tandem with the bubble popping fear meter. He must be losing sleep over as his Langford slumshacks get price whacked. When houses trade like penny stocks you know the time is nigh.

“This Is Going To Blow Sky High” – Observations On Canada’s Housing Market

The first real segment of the expo was a panel of Canadian developers and real estate agents giving their views on the market. It actually started off a touch bearish, which surprised me. Two of the panelists were saying that prices are exceptionally high and no market goes up forever. With that slight bit of caution thrown out there, it became a real estate FOMO-building talk.

The second important factor in real estate is financing. Not everyone has money, so what can they do? The answers were shocking. Be ‘creative’ was the first response. Pool your money, borrow from friends and family, own just 5% of a house, get the money however you can and just do it – remember, it only goes up. Other financing suggestions were get cozy with a lender and they will ‘bend the rules’ for you! The fact that the biggest condo developer in Canada (Brad Lamb) said lenders will bend (but not break, apparently) rules to get you financing in front of 15k people with most people smiling and nodding was shocking

http://www.zerohedge.com/news/2017-03-20/i-attended-top-canadian-housing-market-so-you-dont-have

Penguin
Penguin
March 20, 2017 8:14 pm

The guy who wrote that ad is beyond desperate. It really sums up how the general public in vic is feeling about real estate right now. They think if they don’t get in now they never will. They will do whatever it takes and sink all of their money into even the shittiest house. He thinks it will bring stability and ??what into their lives. Reality is it will sink them so far in the hole. Even if their house does increase in value over a few years they will still be paying a crap load unless they find an angel to pay most of it. Goodbye happy marriage, goodbye to little Sally’s dance class etc once interest rates increase. A house is going to do the opposite of what he wants… So sad and I feel really sorry for all the people out there in this situation. I really wish there wasn’t so much focus on buying a house and people thinking they need to own a house to have a happy life.

Local Fool
Local Fool
March 20, 2017 7:53 pm

Just saw this post below, looks like they are desperate to buy in Gordon Head, sadly without enough down payment or can’t get enough mortgage or neither …

Sad and ridiculous at the same time. Really tries to tug the heartstrings by playing up the kid angle. Who would be willing to loan a stranger tens, or potentially hundreds, of thousands of dollars to buy into a speculative, overvalued market? Would they be as inclined to pay you back if the bottom of the market falls out on them, eating the value of the loan? “Please don’t enforce the loan, I won’t be able to feed my kids.”

Even if, why would I loan to you to cover your previous failure to plan, and help you into one of the bubbliest areas of town? I think, “they can’t be serious”, and yet they probably are. Try Habitat for Humanity, and maybe they’ll feel sorry for you.

Mike
Mike
March 20, 2017 7:43 pm

I find it very amusing reading all the articles about the sales data for the last month or so with no one really taking into account that people were having a hard enough time picking up the kids and getting home from work through all the snow storms from Dec to mid March let alone go looking for houses to buy. It was book to Buy snow tires and get Supplies during the weekends. Then compare to last year when those same months were some of the mildest months in history. Theres my 2 bits.

oceantrader
oceantrader
March 20, 2017 7:39 pm

Freedom – not sure how to react to that ad, so much going on. Sad for them, impressed with their ingenuity. Don’t think they should be chasing down a home in a frothy market, but then again they have been watching it get away from them for awhile now. Frustrating rental experiences probably the last straw. Hope it works out for them.

freedom_2008
freedom_2008
March 20, 2017 7:24 pm

Just saw this post below, looks like they are desperate to buy in Gordon Head, sadly without enough down payment or can’t get enough mortgage or neither …

http://www.usedvictoria.com/classified-ad/Angel-Investor_29082004

Hawk
Hawk
March 20, 2017 6:56 pm

The bears cash accounts are building by the month. Cash is king when the bottom soon falls out. Only an idiot thinks idiots paying $200K over for a POS is going to last.

Sales look to be on track for a 40% ass whuppin, just how Van looked a year ago. The Fool Pool is drying up fast.

Bearkilla
Bearkilla
March 20, 2017 6:40 pm

3710 Gordon Head is a real beaut. Man I think bears are starting look around to see if there’s a househuntnanaimo or househuntduncan to troll.

freedom_2008
freedom_2008
March 20, 2017 6:40 pm

Actually my friends bought a house in 2016 without buyer agent, so the selling agent acted as a dual agent for him. There were multiple offers, and the selling agent said, if you can match the top offer ($xxxK), the house is be yours. That was what happened; my friends got the house, the sellers got their price, and the agent got his double commission. Was it fair to other buyers, may be not …

freedom_2008
freedom_2008
March 20, 2017 5:58 pm

3710 Gordon Head (not in Gordon Head , but in Mt Tolmie neighborhood), on noisy street, built in 1964 with some upgrades (kitchen and bathrooms), no suite but suiteable, asking $890K, sold for $1.1M in less than 4 days with no condition. Wow …

Bizznitch
Bizznitch
March 20, 2017 5:50 pm

Local Fool: Probably partially greed. I know a few people who are holding on to places with the expectation that they’ll be worth a heck of a lot more in a few years.

Local Fool
Local Fool
March 20, 2017 5:18 pm

What do you think is the largest reason sellers are not listing?

Nowhere to move to?
Waiting on more gains?
Cannot afford to move?
Allergic to real estate agents?