May 15 Market Update

@Luke
What did you ever find out about 1849 Gonzales Ave? Like you mentioned it was priced reduced and then disappeard off the “Realtor” site round about May 11th or so. I happened to drive by on Sat 13 and the realtor was holding an Open House. I checked the site again still nothing. Drove by early the 17th and there was a SOLD sign up. And now I understand it sold above the original listing price? All seems odd to me.

It’s pretty common for Oak Bay / Victoria residents to stop visiting friends who move to the West Shore.

Pic related.

Although I should probably be protected from myself….

LeoM they we’re talking about the surveyor to come and pin locations for the excavation. So she would have had a survey of the lot. If she even knew what that drawing was for (by the sounds of it) its second hand so now I feel like it be of those changing stories is developing….

You need a legal survey done by a BCLS before ANY construction/destruction work is started. One of the main reasons is the surveyor will take ground elevation readings at over 20 locations throughout the property and heights for various parts of the existing house, including the roof peak, and the elevations at each corner of the house. All future maximum building heights will be measure relative to these ground elevations, as surveyed before any excavations begin. If the final excavated elevation is less than the original ground elevation, then the final maximum building height will be measured from the lower final excavated elevation.

Although my surveyor kinda sucked in the job they did pinning the house location

Shoot, I just finished redoing all my plans because the house designer put all the outside dimensions to the concrete.

Welcome to building a house, just getting started with the problems.

Survey of the lot and house plans is all you need for the building permit. No one forcing you to have a surveyor come out to the site and pin the excavation. How much you wanna bet they don’t pin the house…. I’m also willing to bet they have maxed out the envelope so need precision here. Although my surveyor kinda sucked in the job they did pinning the house location…. They almost used old plans even though when I emailed them to come out I had attached the latest and referenced to use them. So still no guarantees. Shoot, I just finished redoing all my plans because the house designer put all the outside dimensions to the concrete. You don’t strip forms with ICF so they should have been to the outside of the foam. So thus the foundation/footing drawings were actually wrong. House is now 5.5 inches smaller….

Wish someone would do an article exposing the owner-builder exam BS……introduction of an exam “to protect the public,” when the government has zero complaints on file.

This person is clearly in over their head but can obviously pass an exam. Which apparently should be on project management and not obscure code questions. An excavator on site for five weeks without direction and supervision!!!!

I been saying this for the last 10 months. Building a home is not about memorizing the building code.

Fyi, I ran into the same issue on my build. Excavated, hit rock, called a surveyor, he came out, I needed to blast or take a foot off the height. Instead of blasting and going 9′ – 9′ – 9′ I didn’t blasted (saved a ton) and went 8′ – 9′ – 9′ for ceiling heights and had 2 inches to spare on max height 🙂

Nothing to do with knowning building code or similar, just common sense stuff. Exams don’t teach common sense.

@ Leo

Quite the email. Wow. But not surprising.

I don’t believe the target of that particular FTHB program was ever about buyers.

Bingo, the house is in Gordon head. I am not allowed to disclose the address, nor is my friend. I believe there’s a clause in the contract with respect to that. The house has serious issues. That’s all I can tell you. Yes, definitely having a friend/family member view the home with you is a smart idea. Home inspectors only have so much time too.

I’m sorry, but having the experience of seeing my own family and friends suffer the consequences of buying in a rush and not having a home inspection is very sad for me. And seeing first hand how it can affect someone’s life is not something I wish on anyone. Like I said, cases in court involving house deficiencies do exist. And some couples go from civil court to divorce court because of the stress it’s caused. On top of that, a judge will tell you you had the option of a home inspection and you didn’t take it.

So I prefer not to follow the herd and be cautious. You can return a shirt that doesn’t fit easily and get your refund, not with a house that you decided to buy as is.

Thanks for the info on the spirit garden, Janney Claire Alexi. We’ll try to make it to the open house, since we don’t live far and also email you.

We’re just starting to learn about drought-tolerant plants (so we use less water in summer) so would be interesting to compare notes with what you’re doing. Also Luke, you mentioned being a horticulturist? That’s great! Perhaps we can exchange contact info via Janney.

“What do you call your magic triangle?”

Bermuda Triangle. Once you put your money in it’s gone forever. 🙂

Now it is seconds later and font is back to how it used to be so please ignore my last post.

Kalvin:

Not necessarily. Recently, a friend of mine put an offer on a home with inspection – yes, even in this market.

Ah, but where in town was it?

Seems like most of core you’ll get outbid by someone with an unconditional offer.

My house is well taken care of (new roof, gutters, drains in good shape, 200amp recently installed, no oil tanks, etc etc). If I had an unconditional offer within a few thousand of one with an inspection, I’d go with the no conditions. I don’t think I’d even bother to counter to bring them up the few thousand.

Why? A buyer can use some trifling detail on an inspection to back out if they get cold feet. Can you fight that? Maybe, but good luck. Someone backing out of a no conditions offer is a solid case.

JD — all joking aside it’s hot in that it seems to be an area that gets talked about a lot here. I tend to follow it a bit closer that other areas because it’s where we bought.

Aside from the occasional price slash that Hawk is quick to point out (1772 Kings being one of them), I agree with GWAC that it seems anything of quality will sell quickly.

Is this the hot zone right now?

Define what you mean by hot?

Number of sales, days to sell, highest prices, scantily clad women or men?

BCGEU has all of the liquor distribution and liquor stores in it, both of which are not in Victoria.

Is this the hot zone right now? Close to downtown, Uvic, and Red Barn.

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

Entomologist

Wow sorry to hear. That is a crazy price looks like it still needs a reno in the kitchen. These prices are shocking that people have posted the past 24 hours….I hope something comes up for you.

Anything near the university is commanding a fortune…It seems

@totoro
“Maybe there will be a better time to buy when inventory levels rise, not sure.”

Perhaps you can help out by selling your income property? 😉

@LeoS
In response to the original post, is there some way for people to see historical sale price/date for a particular home in the proposed private portal? Or is this still a can of worms? Public can only see the last 3 years on BC Assessment. I don’t want to buy a flipped house.

2016 Frederick Norris sold for $920k for Sept. 2016. It was listed early that year and took a while to sell after numerous price reductions. It needs extensive reno’s and they have done nothing to it! They are trying to make over $200k in just nine months? After what happened on Beechwood though, I wouldn’t be surprised if they get it. The house backs onto Cedar Hill X Rd (so noisy back yard).

I looked at 1860 Fairburn online and I thought, yeah a million plus one is a lot, but – it has a suite, big lot and quiet street. Somewhat fixed up, and here’s the big carrot in the sales description… It’s near UVic! (not a big deal to you and me, but… that’s a big deal for some)

re: Frederick Norris Rd. A guy in a car pulled up beside us last week after for directions to that house – he barely spoke English so it was hard to communicate – but we pointed & mimed our way through the directions & then he took off like a bat outta hell.

We looked online but it didn’t pop up into our PCS until yesterday – a full week later, and in the notes it says, “NO showing until further notice.”

Question: a different realtor told us she couldn’t show a home to anyone until it appeared in MLS.

Is that really the rule about showings? because the house seems to have been sold before it appeared in PCS. Makes us wonder if this is common here now.

It’s not all price slashes out there; 1839 Townley ended up going for 918k.

I posed the question in the last thread if anyone thought they’d get 900k as I thought that was the perfect combo of location/bedroom/bathroom/suite.

I don’t place as much value on paying for a “house inspection” as most people do. I know this will sound crazy but I’m quite serious. Of course I would inspect the house myself looking for the obvious. I also get an electrician to check it over as well. (Hired “House inspectors” are more often than not….NOT even qualified to open the electrical panel up “fully” and have a good look inside.)
The first thing they have you do is sign a waiver that absolves them of any responsibility for the inspection…making it meaningless anyway!!! But everyone “loves” them including the banks.
When you are paying $800,000.00 for an old bungalow you can expect an “old” bungalow with the likely hood that it will need work. It’s not rocket science.
If you can afford $800,000.00 for an old, out of date, broken down old house, you should be able to afford replacing the hot water tank if it needs it. Same with a roof. Big deal.
You are not paying $800,000.00 for the house….you are paying for the fact that the house is in a good neighbourhood and in a very desirable city.
Check the bones of the house. Sags in the structure, water stains, damp odours, perimeter drains, check the electrical by an electrician, flush toilets, run taps fully, flush toilets, roof tiles in general, attic – check for water stains on ceilings upstairs, check to see if water is flowing fast in sewer pipe.
Look at how well things have been maintained. It is quite obvious. Watch for the obvious “clean up” signs such as new gyproc on the basement wall where there is obviously soil behind the concrete wall. Look for water damage on the floors or baseboards in the basement.
Oh… and asbestos…..there isn’t an old house in Victoria that likely doesn’t have it.
Have the yard scanned for an oil tank if possible. They are being removed every day and it is not a big deal 99% of the time. (But…..Everyone tears their hair out by the roots over that one too:)

“Bingo: We need enough inventory so that buyers can add conditions to their offer. Bidding wars are bad enough, but buying without a proper inspection is awful.”

Not necessarily. Recently, a friend of mine put an offer on a home with inspection – yes, even in this market. It was the best decision she ever made. The home ended up having a long list of costly deficiencies that needed to be rectified. Being at the top of her budget, she would have had to borrow money to fix the problems. A couple of issues were too serious to even consider that.

Homeowners should not be weary or afraid of home inspections if they took great care of their homes. It really does not take that much longer in the process. Buying a home in any type of market without inspection, hot or not, is ridiculous and not being smart with one’s money.

Even though contracts are signed, I have seen scenarios like this end up in the court system and it is extremely costly for both buyer and seller. It puts a drain in one’s wallet and sometimes relationships.

So yes, don’t be afraid to add an inspection to an offer. It is not an extra expense, it’s part of the biggest purchase you’ll probably ever make in your life and spend many years to pay off.

@Newhomeowner
When we bought two years ago, we could have bought more, but didn’t. Both of us were making less money back then, so we bought half a duplex in the so-called core. Basically, a starter property. While it kind of sucks sharing a structure with someone else, there is something to be said for not being forced to eat lentils, ever (maybe we’d have to if one of us lost our job, but like you, we wouldn’t be homeless). For now, avocado toast is never in short supply in our half a house.

Since it isn’t our foreverhome™, we plan to sell this pile of glass, sticks, and plaster at some point, and buy a detached pile of glass, sticks, and plaster. Hopefully somewhere else.

So as LeoS said, good choice. It’s a compromise, you might have to commute, and those jerks that live in the city won’t visit, but at least you ain’t broke.

Also, are you really that much better off buying in the core in the long run? This blog is Oak Bay and Fairfield-centric. How do core areas like Esquimalt, View Royal, Burnside/Gorge, etc., compare to Colwood and Langford over time?

As well, it’s primarily BCGEU that are based in Victoria. Other people covered under other agreements(PEA and Nurses) are spread throughout the province. That said, many of the best paid are non union. If you look at sunshine list in 2014/15 there were 7500 people on it. So at that time around 30% of the public service made over $75k.

Was just going to make the same point. If there were 7500 core public service jobs in 2014/15 making 75000+ that probably translates to no more than 5000 in Victoria. Some of these are BCGEU, many are management or other non-union employees, some belong to other unions.

You will find a lot of other high paid public sector employees from the broader MUSH sector (munis, unis, schools, hospitals). Federal civil service of which there are also quite a few in Vic also pays better than the province.

One thing I have learned on here that you can take anywhere I think. Buying near a university is a good plan. Not sure about these levels but on a pull back.

I just looked up tomorrow’s Supreme Court cases in Vancouver and it seems they are full of foreclosures.

You mean the chambers applications?

https://justice.gov.bc.ca/cso/courtLists.do?listSelection=Vancouver_Law_Courts.pdf&courtType=SCCL

There are a number because they are only scheduled Mondays and Thursdays and have been since 2013. I don’t see an increase, nor would it make sense given the rates of appreciation in Vancouver?

Here’s a more recent quote from Andrew Bury dated November 2016

At the moment, mortgage default rates in B.C. are very low, Bury said. But looking back, he said, “in 2008, it didn’t take a huge decline in prices. In short order, there was double and then triple the number of defaults because of price declines.”

Wow Hawk you and your buddies getting desperate. Lol.

Original article from 8 years ago.

http://www.notapennydown.com/blog/hello-world/

It is a bit crazy that prices haven’t been slowed down by this, but I guess it is move up equity, downsize equity from other places like Vancouver, and cosigners and parent help keeping things going with a bit of foreign buyer money.

Some ftbs are learning that they can’t borrow as much as they though they could, then falling back on the new ftb loan to secure financing. I’ve heard of this happening a couple times now. Gotta love those pre-election policies.

Marko looks outdated.

1860 Fairburn for $1,001,000…..wow!

Yikes, bankruptcies heading up ? Is “The End” here ? Sure smells like it. 😉

@MortgageMark

This could be quite telling. I know Andrew, he’s probably the biggest foreclosure guy in town. If anyone sees the trenches, he does

https://twitter.com/MortgageMark/status/864854764428722176

I agree, RE markets aren’t magic. But trying to determine where the peaks and troughs are is virtually impossible, as your own and others’ prior posts demonstrate.

By that extremely narrow definition of buying ONLY at the peak or the trough then you can’t time the market. The market is only at those points briefly. And I have NEVER said that I was trying to time a peak or a trough. But you can time things so that you can buy when the market is in your favor as my posts have repeatedly shown. That is timing the market, the other is just being lucky.

@cadborosaurus & @Bingo

on an insured mortgage the rules are 42% of gross income on debt on normal high ratio mortgages and 44% when your credit score is above 750. And that includes the approval at 4.7% rather then whatever it is you’re signing. Was quoted the same rules at both the broker and my bank.

I have a similar but different experience though. 125k/yr household income with perfect credit, I was approved at 750k. All told that meant over half our net income would go to a house($3700-3900/mo on housing costs, take home biweekly at $3300(both union so dues and pension are in there)). We thought that was crazy, but we felt we needed to buy(because of reasons) so we bought a 4br/3ba SFD in Colwood (on a bus route/near the goose) for 500k.

It means all of our city friends will never visit us again and it takes me 20 min to get to work/1 hr to get home. But it also means if someone goes on mat leave we aren’t reduced to bread and water, and if one person loses their job, we won’t be made homeless.

No regrets on buying now. About $200k regrets for not buying 18 months ago.

totoro

but I guess it is move up equity, downsize equity from other places like Vancouver, and cosigners and parent help keeping things going with a bit of foreign buyer money.

Sounds like a reasonable explanation. We can’t blame it on 0 down 35/40 year mortgages.

Maybe there will be a better time to buy when inventory levels rise, not sure.

We need enough inventory so that buyers can add conditions to their offer. Bidding wars are bad enough, but buying without a proper inspection is awful.

At some point months of inventory will increase, but the question is when and what will cause it. My money is on increased interest rates being the catalyst.

Yes. Without the 20% down or co-signer the new rules impact what you can borrow by quite a bit for ftbs, and the interest rate risk is significant without a suite. It is a bit crazy that prices haven’t been slowed down by this, but I guess it is move up equity, downsize equity from other places like Vancouver, and cosigners and parent help keeping things going with a bit of foreign buyer money. Maybe there will be a better time to buy when inventory levels rise, not sure.

I don’t hear any pearls of wisdom being expressed on how they went about trying to time the market in the past and failed.

I certainly tried it once, in early 2016 when the US markets started their precipitous drop. Hung on for a few months, then thought it was going to keep going, and sold a bunch and went to cash. Then of course, it rocketed back up to new highs. Served me right, good lesson for me.

I agree, RE markets aren’t magic. But trying to determine where the peaks and troughs are is virtually impossible, as your own and others’ prior posts demonstrate. In my case, I choose not to participate, which will either be a great decision, or an awful one. 🙂

We bought our first house in the early 80’s for $92,000 which was a little more than two times our income. I vividly remember sleeplessly staring at the ceiling the first few nights staggered by the size of that amount and the upcoming 240 payments.

Unless your “starter home” customers have a household income of $300,000, they will (should?) be far more agitated than I was.

I can’t see how one could avoid personal and family anxiety while carrying that kind of commitment for decades.

Leo, not surprised. Watching the CTV news and now “affordable”housing downtown is $1500 for a one bedroom. Someone who is single making $20 to $25/hr will have to fork over a whole paycheck or more.

This city will soon implode when these landlords think they can all gouge like this. History will repeat like in 2012 where renters left town like the UVIC student is.

On Vancouver news last night.

New house in Vancouver listed for sale in Vancouver and Hong Kong for 2099 bitcoin owned by a numbered company of which the agent is a director.

When asked by the reporter if it was ok for him to be a director of a numbered company owning a house he is selling, he replied “you ask a lot of questions” and hung up the phone.

Nothing to see here folks.

Watch the 2016 Grant’s lecture: Cohodes at his best/worst.

Bingo- as a first time buyer I can speak from experience. Our family income is in the 100k range and we will have 5 – 10% down depending on the purchase price. We have good credit and no debt. We were approved for 620k from a local bank in Nov and up to 740k with a suite, both amounts absurd IMO. We likely would have been approved for higher from a 3rd party lender or if we took advantage of a Christy Clark loan of an additional 37k. We haven’t gone for a pre-approval since the new Fed rules took hold that require first time buyers to be able to withstand mortgage payments at current BoC rates of 4.7% so take 100k off our top end for a potential pre-qualify amount today.
We’re not going to buy at the high end of that range anytime soon, we are waiting for more inventory and eating popcorn on the sidelines waiting for the inevitable further government controls coming our way.
We have several friends our age and income bracket who will also be high-ratio mortgagers that are buying right now, 2 placed offers this week on places. They’re buying at the top of their approval range. Scary times

“How did this bubble grow so gigantic?

“The Canadian housing market is a money laundering-induced market. They have sought Chinese money to keep the housing market propped up. But it won’t last. Especially Vancouver is a place for the criminal element to come into Canada and hide money”

Local,

Good post. Cohodes knows where there’s one Home Capital there are many more to come. There is never just one, only a total idiot would think that. The OSC just did their job and now they know the patterns of how these frauds lent out the money to those who shouldn’t have.

Just a matter of time til the books are scrutinized and more is uncovered. The Big Short Canadian Style coming up, just like the Trump and crew going down in a ball of flames.

Totoro mentioned that ~$650k is about the price of a starter home in the core. Here are a couple recent sales that I think are decent deals (assuming there is nothing horribly wrong with either them) and fall into this category:

281 Rudyard in View Royal
2734 Roseberry in beloved Oaklands

If I just had to buy into this market, and wanted an SFD, this is what I would be going for. A non updated, but otherwise solid 50s shit-box with suite potential. Since most people are not handy (or think they aren’t), the competition isn’t so fierce. And if you are handy, you can build some equity.

Thoughts, would be first time buyers?

wolf

Curious, who’s handing out 1.3 million mortgages to $175K incomes? How did you come up with 1.3 million?

Lots of different Canadian calculators out there. Here’s one: https://www.ratehub.ca/mortgage-affordability-calculator

Looks like no matter how much down you have the most it’ll say you can afford is ~1.25 million + your DP.

Will a lender actually loan that much to a family making 175K? No clue. In my experience a bank will lend as much as it’s allowed regardless of whether it’s a good idea. When we bought our house the bank was willing to lend a lot more than we thought it prudent to spend. I don’t remember how much, but it was >100K more than we were willing to spend (so they thought we could handle at least $600/month more at those rates).

I wonder how much people make that are buying houses in the 750-850K range (seems to be the SFH sweetspot). Are families making 90K actually stretching themselves that far? Looks like if you have 20% down you can “afford” it. Yikes.

Anything less than 20% with 90K income and you can only borrow 460K + your DP (according to the calc). To afford a lot of these places on median or near median family income you need 20% down and a 30 year amortisation.

LF

I stopped along time ago trying to figure out timing. Could happen tomorrow or in 10 years. Instead I just try to keep some cash for the down times. Things always go back up just need to be able to ride out the bad times. 🙂

“We had other investments first that we cashed out to buy – I’m still repaying the HBP. We then invested again when we could afford it.”

I’d consider this all-in on a home. Sounds like you cashed out all your investments to buy.

Curious, who’s handing out 1.3 million mortgages to $175K incomes? How did you come up with 1.3 million?

Gwac,

Oh, I have a doomer article for that too. 😀

http://www.bnn.ca/wake-up-call-canadian-unemployment-conditions-worsening-per-survey-1.754290#_gus&_gucid=&_gup=Facebook&_gsc=SNkYNdc

Rate hikes or unemployment spikes are definitely catalysts to trigger defaults and a downward slide. You’ll notice that right now, arrears rates are very low. It suggests that Canadians are handling the debt well. Doesn’t it? Well…

Exorbitant house prices and excessive leverage go hand in hand – and in the hottest markets where you have both, you see few defaults. Does that mean we can afford the prices? Not necessarily. In a hot enough market, how would people writ large end up defaulting? If you can’t make the payment – so what? Put it in the market and it sells almost immediately, very possibly for more than you paid for it. Walk away feeling like you’re a financial genius.

The problem is when sentiment sours, and real estate goes back to being its traditionally illiquid self. Then it’s not so easy to get out from under the debt. Arrears start to rise, and the rest…well I’ll leave that up to imagination.

Finally something I sort of disagree with you on. It is not an either or scenario. Everything counts imo and 400 dollars a month extra on food adds up if you are just starting out and trying to save a down payment.

You are not just starting though. You’ve been in for a while and maybe the who cares attitude on food is worth it for your quality of life vs long term return.

Taken a bit out of context; I did the small stuff too when I had time and it was relevant to my financial standing. I remember when I use to walk into Subway 10-15 years ago and people would order a Veggie ($3.49) when Subway has a special of the day 7 days a week for $2.99…..even in my teens I was like how stupid can you possibly be. Just order the special of the day and ask for the meatballs/tuna/etc., to be left off, and poooof you have a Veggie for $2.99. I must have seen at least 50 people order a Veggie at $3.49 over the years. My friends were always embarrassed for me when I employed the please leave the meat off trick 🙂 Not to mention it once made for an awkward date when she ordered a Veggie and I was like….”no no, she will have the meatball…..”

I don’t go to Subway anymore but I see this type of thing every day….like people getting ICBC deductibles for $300 or $500…..I am always shaking my head as it makes no sense.

My point is I am not going to line up at Costco for 10 minutes to save $3 on gas when I can do 10 minutes of research on selling a house, do a mere posting, and save $10,000.

At some point your time becomes more valuable than saving a few dollars here and there. When a crap house in the core is $1,000,000 saving on food is not going to get you there. You need to set it up a bit in terms of savviness and decision making…..actually I take that back. Just employ common sense, I don’t see a lot of it around.

Marc Cohodes is one of the most feared short-sellers on Wall Street. Right now, he’s on the hunt in Canada where he spots a monster bubble in the housing market.

Excerpt from Interview:

What’s going wrong in Canada?

“The Canadian housing market is essentially the US housing market during the second half of the last decade but on steroids and LSD. People are leveraged to a scope I’ve never seen. In Toronto and Vancouver, which are the most moneymaking areas, the average income of a family is only about 80,000 to 100,000 Canadian dollars. But house prices are 8 to 10 times that. People live way beyond their means and in order to keep up they are borrowing more and more and more. The problem is that the people who are lending you money expect to be paid back. So when things change they are going to change drastically and people are not going to know what hit them. It’s going to be horrific.”

How did this bubble grow so gigantic?

“The Canadian housing market is a money laundering-induced market. They have sought Chinese money to keep the housing market propped up. But it won’t last. Especially Vancouver is a place for the criminal element to come into Canada and hide money. You walk around places at busy hours and there’s no one there. People own on multiple units and they’re just taking money from totalitarian areas and putting it into real estate, pushing up prices and crowding out people who really need to live there. The same is true for Toronto. It’s the financial capital of a banana republic. That’s what’s going on in Canada and they really need to start paying attention. They admit that they have a housing bubble and that they need to be doing something about it. But all they do is talk.”

How do you short the Canadian housing market?

“I think the five big Canadian banks are okay. But everything around the periphery is going to collapse. The regulators have been sleeping at the switch. To me, the struggling mortgage lender Home Capital Group is like the vulture in the Canadian housing coal mine. It’s Ground Zero for everything that’s wrong: you have mortgage origination fraud and you have laundered money. I have been talking about it in the media for two and a half years and I have exposed them for what they are. But regrettably, everybody is of the point of view to shoot the messenger and not listen to the message. What started off as a company which was telling stories and missing numbers in a booming housing market turned into mortgage origination fraud, then turned into disclosure fraud and will probably turn into insider trading. It will turn out that the numbers really aren’t the numbers.”

https://www.fuw.ch/article/i-focus-on-the-crappiest-companies-i-can-find/

So it seems that you’re agreeing with me that house prices cannot be sustained by income levels.

Your comments always assume all-in on real estate, totoro. Not everyone works that way. Some of us take other routes that get to the same place. Perhaps it’s more risky, like you say, but it’s still math-based. Otherwise someone like me wouldn’t take that route. I would perhaps debate the opposite in that real estate can be more risky, especially if leveraged. What worked for one generation doesn’t necessarily work for the next.

“Depends on how good you are at hustling.”

For more than 20 years I would find myself in Singapore for a few days. I would always visit the same food court and the same vendor near the Carlton hotel. What with work and jet lag I could be in the court at any time of day from eight in the morning until two in the morning. No matter what time of day it was I was always served by the same two women and one man. Every day, every night, every morning without exception for two decades. These are people who will get ahead in Singapore and they will get ahead if they emigrate to Canada – much to the consternation of the native Canadians on their block who have a markedly different view of work.

Canada (to it’s great benefit) has immigrants like this (tip of the hat to the Juras family) but it produces almost no home-grown versions. It’s a big problem.

The Economist publishes a list of the world’s most competitive economies from time to time and one of the more recent ones rated Canada. In first place on the negative side of our nation’s balance sheet was the comment “over-expectant work force.”

Thanks for the link caveat. Very interesting.

“I am shocked how many millennials go for mutual funds if they have a bit of cash left over”

That’s because baby boomer and Gen X financial advisors at the banks (note spelling is not ‘advisers”) tell them that’s what they should do. It’s a bad choice IMO but that’s what they’re taught. Last time I checked Marko, you were in fact a millennial yourself. Don’t put yourself above your brethren, you’re not.

It’s not about the Avocado or filling up at Costco on gas to save $3.

It’s the big picture stuff where the millennials get screwed…..just ask a millennial to list three differences between TSFAs and RRSPs? I am shocked how many millennials go for mutual funds if they have a bit of cash left over. If you are paying 2% MERS your chances of getting into a house based on hustling and hard work are zero to none. Common sense is required too.

I blow a lot of cash on food. I honestly don’t pay attention and I just buy whatever I want. Who cares as I make up on a ton of other stuff by taking a few minutes to educate myself? On one really simple thing such as managing my own RRSPs and TSFAs in a TD Waterhouse account I save more than $4-$5k per year versus having someone “manage” it. And there is literally an extremely long list of where you can make up savings over the average person. For example, just do $1,000 deductibles with ICBC; one simple calculation and you save $200 or so per year.

The fruit is way higher when you are talking about entering at close to a million. It has nothing to do with just working harder or hustling. It’s out of reach with only those two options. You need prior equity, rich parents, two very high paying jobs and little debt, lottery winnings or criminal income.

Depends on how good you are at hustling. You also have people out there that are mentally and physically capable of working 80 hours per week without vacations, I did it for prolonged stretches in 2009-2011(working+doing my masters) and 2013-2014 (just working) to get the ball rolling financially.

I agree that those who spend frivolously might want to reconsider complaining about house prices but the down payment isn’t the only thing to consider. Why save for a down payment if your income doesn’t qualify you for a sufficient mortgage? I’m not sure what percentage of Victoria works for the government (I’d think it’s a fair share, and those jobs appear to be sought after so there are likely many who make less) but upper level positions there with advanced degrees and 20+ years of experience aren’t 6 figures. A high end salary for government might be $85K – so maybe a household income of $170K for a couple. Depending on their down payment these folks can afford about a $800K mortgage, meaning they work for 20 years to afford a home far from the core. Sure, people in upper positions may have bought decades ago when it was more affordable, but when a city’s (relative) high income population can only afford the low/moderate priced homes, we have a problem IMO.

Public sector salaries can be looked up in the online database.
http://www.vancouversun.com/business/public-sector-salaries/INDEX.HTML

@ CE

” Thinking back to my first house that seemed expensive at the time (and wasn’t really that long ago) the price paid was so cheap it seems like a joke by today’s standards.”

I think for most people, there is not much perceptual difference between “expensive” and “ridiculously expensive.” Above a threshold (for me about twenty bucks), everything seems ridiculously expensive. Thus, when we bought a house for less than 2 times annual income, it seemed like a Heck of lot, and it was painful to have to borrow ten thousand dollars from the bank that we paid off in six months. Today, faced with the prospect of buying a house for eight or ten times annual income, many may feel no more daunted than we did so long ago, even though mathematically, the situation they are dealing with is truly far more of a challenge.

The fruit is way higher when you are talking about entering at close to a million. It has nothing to do with just working harder or hustling. It’s out of reach with only those two options. You need prior equity, rich parents, two very high paying jobs and little debt, lottery winnings or criminal income.

Exactly. Its pretty simple yet a lot of people seem to resist the concept that it REALLY is harder now. Thinking back to my first house that seemed expensive at the time (and wasn’t really that long ago) the price paid was so cheap it seems like a joke by today’s standards. A cruel joke if you’re trying to get into the market for the first time.

I’m gen x and it was not easy for us to buy a first home.

Nope, never has been unless you’re rich. But it was a lot easier than now.

If boomers had it easier, good for them. As far as I can tell their lives had a lot less flexibility and choice compared to my generation.

Boomers and Gen-X’ers (that’s me) should collectively be thankful for their luck instead of dissing the lazy wasteful avocado munching millennials.

The power of compound interest over time is pretty amazing and it will work for you today over the long-term, as it has in the past imo.

Gen X and the boomers have had some amazing tailwinds on our investments. Continuously falling interest rates means bonds have done spectacularly. Ridiculously low starting valuations in the early 80’s means stocks have done spectacularly. The trend in interest rates also boosted house prices and stock prices and meant that every mortgage renewal has brought lower interest rates.

As you like saying there is only the “deal of the day”, but it is objectively a pretty crappy time to be entering the housing market in many major Canadian markets. As it becomes increasingly likely that we repeat the US housing experience avocado on toast may well look like a wise spending choice* compared to 5% down in one of the frothier markets of Canada.

*Not seriously. I’m actually in complete agreement with you that saving and living frugal when you are young is a great habit. Or if you are going to spend frivolously go travelling and enjoy bargain-priced avocado on toast in its native Guatemalan habitat.

That’s like a climate model or a mutual fund promotion, it should come with the warning that past performance is no indicator of future results.

Yes, although 67 years of data for Victoria and more for the stock market is enough for me to forgo some current spending for future return. YMMV.

http://www.mrmoneymustache.com/2011/05/18/how-to-make-money-in-the-stock-market/

Furthermore, we should be grateful to those who are poor because they eat out, since if we all saved as much as we could, the economy would be in permanent depression.

If people who were not financially independent spent less on discretionary items our economy would change. All at once and it would cause a depression, but that is not a realistic scenario and other ways of spending would arise.

http://www.mrmoneymustache.com/2012/04/09/what-if-everyone-became-frugal/

And it is not poor people eating out usually. The low income cut-off is 18k for a single person and 23k for a couple assuming they don’t have free rent. People at these income levels have little to no discretionary income to spend in most cases.

It is most of people who have discretionary income doing this now – in the US people on average spend more on eating out than groceries now.

I have zero problem with people eating out if they want to.

I have a math issue with people claiming they can’t afford something they want while continuing to spend on things like this. It actually does add up and makes a difference over time and whether the current spending is worth it to remains a choice.

https://qz.com/706550/no-one-cooks-anymore/?utm_source=nextdraft&utm_medium=email

“Lots of properties in the Uplands with not many sales.”

Absolutely — I was being tongue in cheek about the opportunity to turn an almost instant profit beyond the dreams of avarice, although in this crazy market one cannot tell what could happen next. Perhaps we’re at the beginning of the next leg up!

CS:

You might be right about the resale price but personally I would be cautious. Lots of properties in the Uplands with not many sales.

And the word for today is…

self-aggrandizement

The act or practice of enhancing or exaggerating one’s own importance, power, or reputation.

See also
Boastful, braggart, bragging, braggy, crowing

It seems to be a variety of listing agents so I dont think it is Mr Microsoft.

My recollection is that at the beginning of this year we had four listings in Uplands and we are now looking at fifteen. There has also been very few sales in Uplands this spring. How many months of inventory does this represent for this area considering the slow pace of sales.

If there is a general feeling that the market has plateaued we might start to see a lot of spec houses coming on the market where people try to get out while the getting is good. How is that for bad grammer. Some areas like Fairfield and Rockland still dont seem to have a lot of inventory but others like Uplands and James Bay seem to have had a large spike of houses come on the market.

For sale sign is down on 2657 Forbes. Being a private sale, is there any way to find out the sale price?

As a baby boomer I don’t eat out as much as I used to, because I find the costs exorbitant. I suspect many other baby boomers feel the same way. When you grew up accustomed to meals under $10 (if not in the $5-$6 range) it’s hard to make the transition to today’s prices.

From our own experience walking around Estevan and Lansdowne Slope, and meeting people there, there’ve been a mix of families and some retirees that bought in the last 2-3 years, and we’ve seen mostly renos. For sure there are some new builds, but the majority are renos. Even some that sold for $920k-$1.1M are now being reno’d. There are some that were already reno’d & sold for around $1M to $1.3M.

Maybe there are more new builds within 2 blocks of the ocean? – because that’s targeted at the “luxury market” & the older basements are wetter around there? A bit farther from the ocean, renos are very popular because the older houses already have large rooms & good-size basements. Both DIY & contracted renos are being done.

“What would you like to see on HouseHuntVictoria?” Fewer dick swinging contests and personal attacks on each other by your regular commenters. But that wasn’t an option on your vote. Pity.

Impeccable logic, but really, when a person has to decide, never to eat out again or take another holiday for the sake of a duplex in Langford, the reaction is likely to be: “Oh F*** It.”

It is not never, it is two years. I don’t understand why this is a big deal myself. We did this for five years. Kids were small and lots of local free stuff and eating at home was easier anyway.

Seems like a a very small thing to give up to potentially turn one invested dollar into 20 over 15 years. We left skiing and vacations away until after we had owned for a few years and could afford them and never spent that much anyway due to combing work travel with vacations.

Some, totoro, some. I agree that some millennials spend freely but many others do not. Comparing what millennials spend eating out vs. what baby boomers spent eating out when they were the same age, adjusted for inflation, is the proper comparison.

Yes, not all. That was the average. I don’t think that is the right comparison at all. I think it should be a savings comparison among those who have saved for a first time down payment. But, really, the question is one of savings rate overall and use of discretionary income and strategic thinking. The article was just faulty in its premises, comparisons and logic imo.

It’s all Local’s fault talking about the “New Paradigm” again while Toronto listing go through the fricking roof. Only a matter of time til contagion hits and “WTF” is the most commonly used expression on this blog. 😉

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

$4,832 annually on vacation? That seems very high, or perhaps I’m just a squirrel.

Guessing you don’t have kids or enjoy skiing?

Re: Avocado toast

“How about putting the whole amount of both categories into savings for a 5% down payment.”

” assuming you are a couple, you’ll have almost 30k after tax saved in two years in a fairly painless way. ”

“420k Canadian buys you a condo in many areas of downtown or a duplex in Langford.”

Impeccable logic, but really, when a person has to decide, never to eat out again or take another holiday for the sake of a duplex in Langford, the reaction is likely to be: “Oh F*** It.”

even if millennials assumed the eating-out habits of baby boomers

What a totally bogus comparison. I wasn’t spending like a boomer when saving for a down payment because I didn’t earn as much and was saving for a down payment and the boomer already did that step. And millennials are now spending more than boomers who already own a home on eating out and travel!

New Study Finds Millennials Spend 44 Percent Of Food Dollars On Eating Out
https://www.forbes.com/sites/alexandratalty/2016/10/17/millennials-spend-44-percent-of-food-dollars-on-eating-out-says-food-institute/#4fd800ac3ff6

millennials spent $305 more than people from 55 to 64 — a group that encompasses some baby boomers — and $89 more than the overall average, including spending among people ages 35 to 54.

According to the Food Institute, which analyzed Bureau of Labor Statistics expenditure data from 2015, people from 25 to 34 spent, on average, $3,097 on eating out.
…
Millennials spent $4,832 per year on vacation

How about putting the whole amount of both categories into savings for a 5% down payment. Forget 112 years, assuming you are a couple, you’ll have almost 30k after tax saved in two years in a fairly painless way. Cut all discretionary spending and it will add up faster. Move back home if it is an option and you’ll be done in a year.

assuming a 20 percent down payment

Why is that again? The math doesn’t seem to favour it for ft buyers.

And look at that median price: $315,000 in March 2017. Those poor poverty-stricken Americans, they wouldn’t be able to buy a house ever, here in chilly Victoria.

420k Canadian buys you a condo in many areas of downtown or a duplex in Langford.

Fixing them up? They’re flipping them. Trying to.

:faceplam:

Fixing up / pride of ownership = investor / wannabe flipper
Can’t argue with this logic.

There has been pushback on the claim that Millenials prefer avocado toast to owning a home. Fact checkers have determined that:

even if millennials assumed the eating-out habits of baby boomers, it would take around 113 years before they could afford a down payment on a home (assuming a 20 percent down payment on the median price for a home in the United States, $315,000 in March 2017, and a one percent yearly yield rate).

And look at that median price: $315,000 in March 2017. Those poor poverty-stricken Americans, they wouldn’t be able to buy a house ever, here in chilly Victoria.

“The lower end is disappearing altogether.”

That’s what happened just before the 1980’s Toronto crash. You could see that many of the houses for sale were owned by people who could not possibly have bought them at the prevailing market price.

Not me gwac but I guess you have to stalk Garth as well. Kinda sick. BTW, you shouldn’t get so upset in parking lots either. Not good for your arteries. 😉

Portal
2617 Cadboro Bay Rd V8R 5J3
OB Estevan-Oak Bay

It is on the East side of Cadboro Bay Rd, that’s Estevan.

Both Musgrave are far from a “tear-downs or something”. Families live there. I always feel very disrespectful to call people home a tear down, no matter how old and outdated.

This nicely reno house in Estevan is only $900k.

That’s not Estevan!!! That’s Cadboro Bay Road, for goodness sake. To see what you get for $1.1 mil in Estevan, take a look on Musgrave.

what did I hit check news with?

Marko just hit Chek news….

The only guy…..old guy.

Thanks Marko.

Gwac, Hawk is not VREU. I don’t know why but I perceive the latter as female. Go figure. They virtually never respond to rebuttals either, unlike your friend below.

Yes, Hawk. I said it. I have no idea what “chart” you’re talking about. Can you show me? 😀

Fight on the roadways of Victoria

https://www.facebook.com/vibrantvictoria/videos/10155268438924362/

Okay, seriously, do you know if there was anything done to the home or was it a straight flip?

2004 build so not much to do.

A home on Ravensview just sold for $915k and purchased in 2014 for $596k.

Rational. It seems a house really is an effortless path to riches. New paradigm!

Okay, seriously, do you know if there was anything done to the home or was it a straight flip?

@ Hawk:

“Canada’s private debt to GDP is highest level ever recorded by any major OECD economy.”

Hah! At least we’re world-beaters at something.

Although, with interest rates at all time lows and with little room to go lower unless we enter the realm of total monetary depravity (i.e., what’s pretty certain to happen next), we may have reached the end of a secular cycle both in interest rates and property prices. In which case, young folk will be able to enjoy avocado toast and declining RE prices too.

“As per sq ft, Uplands lots are bargain…….”

But it’s not the square footage people are chiefly looking for. It’s access to the infrastructure and amenities of the district (mostly created by generations past, not present). That’s why a 6000-square-foot lot is worth much more more than one quarter of the value of a 24,000-square-foot lot.

Currently, minimum lot-size tear-downs or something like are offered in the Estevan area for $1.1 mil, which is not much less than my property would fetch, although mine is almost twice the size but not sub-dividable.

Just had an avocado on a toasted whole wheat bun – <$3

But was it an organic avocado?

And was it ‘smashed’?

We need more information.

What happened to 1849 Gonzales Ave in Victoria? It’s just disappeared off my PCS account. Why do some places that sell just disappear? (I’ll probably ask my agent this as well).

Now – off to Costco quickly before the ‘crawl’ starts…

That said about Metro Van – it does have the dividing line between ‘East and West’ which is Main St. If you are on the Westside apparently you are the ‘creme de la creme’. But the Eastside – things are supposedly not so good. I also encountered this joke living there… ‘how do you get from India to China?’… ‘cross the Alex Fraser bridge’…

Times fly by so fast, isn’t it? Y2k is about 20 years ago!!

Avocado toast is just figure of speech, it is about discipline on how to spend money wisely.

What’s avocado toast?

I can kind of see the point of foregoing the avocado toast when you are trying to save to buy a first home.

One dollar invested in housing in Victoria in 2003 at 5% down bought about $20 worth of house. Today that one dollar would have turned into at least $60 tax-free, as prices have tripled.

And the $500/month you could save by being really frugal ends up being $6,000 a year, which would have turned into over $300,000 today if part of your 5% down and my math is correct.

Avocado toast isn’t that tasty.

@Barrister. The cheapest Uplands I found in 2014/15 is 1M. Cannot even found a decent lot in Estevan for 600k back then. So, the prices are “only” doubled in 3 years, not tripled.

As per sq ft, Uplands lots are bargain…….

gwac: Three years ago the tear down were selling for between 600k and 800k. I know because I looked at two or three with the thought of building. Even in this boom I dont understnad why the prices would have tripled in three years.

“So avocados will not only condemn you to a lifetime of renting, but they will also endanger your physical wellbeing”

Yes, sensible people wanting to own their own home make do with a Zuccini, much safer than an avocado and you can grow your own, even in Victoria’s semi-Arctic climate.

But the reason the market’s about to crash is because of those greedy millenials:

Millionaire tells millennials: If you stopped buying avocado toast, you could afford a home

I guess avocado toast is only for property moguls.

Anyone know what happened to 1849 GONZALES AVE? Price was ‘slashed’ twice, then it sold for above the original asking.

Wow, see the rush to cash out of the Uplands: Seven listings so far this month, average price a shade over $5 mil.

I think most of those are re-listings. Maybe someone with access can confirm? Pretty sure I’ve seen most of those come on the market at least a couple of times now.

Wow, see the rush to cash out of the Uplands: Seven listings so far this month, average price a shade over $5 mil. Prices are, as Barrister says, outrageous, or amazing anyhow. Bring on those Asian suckers, I mean money launderers, I mean investors, they’re urgently needed now.

Looks like a lot of tech companies in the Van Isle tech park out by Camosun Interurban. I would say they have a good chunk of employees. Also out in Keating (Schneider) and Redlen Technologies in Saanichton.

The price of rents downtown could have a large effect on smaller tech companies and start ups which work out of basements and garages.

http://vitp.ca/current-companies/

“Just so we can have some discussion based on facts does anybody actual know exactly how many jobs there are right downtown? It is not like Toronto where there are lots of thirty or even fifty floor office towers. I dont have any idea of the actual stats does anyone here know the numbers?”

What a beautiful question Barrister. And I think you will find that no one has a clue. Anecdotally I can say that almost all my affluent friends in the under-35 crowd either work in tech or are some sort of professional with a graduate degrees(often both). And most of their jobs are downtown. But no matter how I searched I really couldn’t find any stats to where those purported ‘22000 tech jobs’ are actually located. Although I did find those tech sector size estimates were from 2014. There’ve been no updates since.

While researching that I came to another interesting fact: Victoria is currently at full employment.
In the last year the employment rate has dropped to almost nothing (April 2016 6.4%, April 2017 3.6%).

Those people have to live somewhere.

http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/lfss04l-eng.htm

“I was told by a senior member of the CRD that the major job growth in the past five years is not in the City of Victoria. ”

Isn’t about 70% of the economy attributed to consumption spending? If that’s the applicable number for greater Victoria, one would expect that when people move to the West shore they take a chunk of economic demand with them, thereby driving economic growth outside Victoria’s core. Moreover, if they commute to work in the core, they will shrink the economy of the core, since their Victoria-earned salary is now being largely spent elsewhere.

Who knows, but one day houses in Langford may be more expensive than in Gordon Head.

Haha. Nice one Leo. Wish you were sooner. I hate swallowing vomit….

Would be nice to not have to see the rabid pumpers putting out incomplete calculations while telling everyone to get in now before they are shut out for life. In the meantime I’ll just scan past them as usual. Anyone buying based on listening to those shysters deserve to get burnt.

Past performance price is never a guaranteed future price, especially with a bubble about explode.

I just dont understand the various attacks on different neighbourhoods. Maybe because I grew up in Toronto I really dont find the West Shore a long commute. Iit is about half the commute in either time or distance that I did for thirty years.

There are a lot of nice places to live in Greater Victoria in every municipality so I am never going to diss someone for their choice of municipality. At the same time you could make legitimate criticisms of every municipality. Victoria – high tax, Langford – lousy urban planning, Oak Bay – resistant to change, etc. etc. The West shore definitely has some attractions that the core doesn’t and vice versa.

Actually, a second question:– Is UVic even in Victoria or is it in Saanach?

Saanich and OB

Whew! My mental picture of you remains intact.

I’m not sure I get your point Dasmo but it sounds very much like a personal attack based on a judgment rather than a complete set of facts. Hopefully I’m incorrect on that.

I would definitely help a kid buy a place with a matching down payment, as I’ve stated here before. Looking back, the Janion would have been ideal for this back when it was less than 200k because of the ability to rent it out like Marko proposed – but the numbers no longer work. And what I can or cannot afford personally is irrelevant to the statement “most parents can afford “100- 200k for a down payment” isn’t it? If you do the math on what a down payment match on a first home might actually be in Victoria you might get to a more accurate calculation.

But you are right, I’m not working as hard as I could to buy as much as I can.

There is a pub in Oak Bay which has Fat Tug on tap. I have never seen the tap run dry. This makes Oak Bay an earthly paradise.

QED