Oct 16 Market Update
Weekly sales numbers courtesy of the VREB.
| Oct 2017 |
Oct
2016
|
||||
|---|---|---|---|---|---|
| Wk 1 | Wk 2 | Wk 3 | Wk 4 | ||
| Unconditional Sales | 146 | 289 | 735 | ||
| New Listings | 265 | 479 | 904 | ||
| Active Listings | 1990 | 1989 | 1938 | ||
| Sales to New Listings | 55% | 60% | 81% | ||
| Sales Projection | — | 565 | |||
| Months of Inventory | 2.6 | ||||
143 sales for the week which is about the same as the 146 in the first week. However the year over year drop has moderated significantly, now down 23% compared to this time last year. That sales rate puts us on track for about 565 sales for the month which would be exactly the 10 year average of 567 for October.
It seems like a good time to talk about the weekly numbers and what they actually represent. Monday morning the VREB releases the count of the sales and new listings from the previous week, along with current inventory. However because of delays in when sales get reported, those numbers aren’t simply the actual sales from the previous week.
For example: Right now if I run a search, it says that 133 properties sold last week (9th to 16th of October). So why does the VREB say there were 146? Well because there were 13 properties that actually sold before October 9th but were not reported in the first week’s numbers, so they get added to the current week. This is due to the delay between when a property actually sells (the conditions on the offer are lifted) and when it gets entered into the system.
So there are some unknown number of properties that sold last week that are not yet included in the numbers because the agent has not reported the sale yet. For instance, if a property sold on Sunday, but it was not entered into the system until later today, then it would not have been counted as part of last week’s sales in today’s numbers. It would be included in next week’s numbers.
So the weekly sales numbers are as follows:
Weekly reported sales = actual sales that happened last week + uncounted sales from previous dates – sales not yet reported
Hence the unknown factor is essentially agent promptness. Because the weekly numbers are reported at the same time every week, this factor is roughly constant, but to compare actual sales in any given week to another, the only way is to do it after sufficient time has passed that we can be sure every sale in that week has actually been reported. I now have access to the data feed which will allow me to do exactly this, so expect weekly stats to be more accurate sometime in the nearish future.
ASF: “Figured they could comment based on recent experience”
Commenters tend to move on to the next thread when Leo S. posts a new article.
Yes, I was asking for insight, not a direct measurement of demand. Aren’t there a lot of realtors that are on this blog? Figured they could comment based on recent experience
You can’t directly measure demand for different types of properties. You can infer that demand is stronger for the two properties based on the price they achieve.
Everything else being equal. (And it never is) a house with a suite will sell for a higher price than a house without a suite. And that is reasonable since a home owner has greater flexibility to rent or not to rent the suite. Home owners without suites don’t have that flexibility.
Since the house with a suite sells for a little bit more than a house without a suite one might conclude that demand is stronger for suited homes.
Question about SFH sales that are true SFHs (no suite, decent size) and completely updated (MCM), energy efficient. 5 bedroom , 2.5 bath, 2450 sq feet, good size lot, quiet street.
Insight on demand for this type of home? Is it same as other SFHs with suites, less, or more. It seems it may look like more demand, but I think that is due to limited supply of updated SFHs, at least that seemed to be the case when we were looking over the past 2 years.
How?
Thanks rush4life for the early head’s up on this.
New post: https://househuntvictoria.ca/2017/10/17/stress-test/
OSFI follows through with stress tests. This could be a biggie. No lining up a shadow lender if the borrower can’t qualify.
No workarounds anymore
OSFI is also closing a loophole that allowed federally regulated financial institutions to arrange additional financing with another lender in order to circumvent an institution’s maximum LTV ratio or other limits in its residential mortgage underwriting policy, or any requirements established by law.
https://www.zolo.ca/news/just-got-harder-get-mortgage-canada
Chinese Corruption costs Canadians the opportunity of affordable housing in major cities and all the resulting problems.
You’re not going to attract a lot of customers with a Honda Civic taxi company.
Re: Tesla Model S Maintenance Costs After 300,000 Miles, $10,492.
And the depreciation was?
Now add back the government purchase incentives, courtesy of your fellow taxpayers, and the avoidance of road taxes levied on gas, also courtesy of your fellow taxpayers, and what is the total cost per mile, versus, say, a Honda civic?
Bad times for active investment managers. 66 percent of large-cap active managers failed to beat the S&P 500 in 2016. 89.4 percent of mid-cap managers and 85.5 percent of small-cap managers did worse than the index.
Over 15 years, “92.2 percent of large-cap managers missed their marks, while the number was 95.4 percent for mid-caps and 93.2 percent for small-caps.”. https://www.cnbc.com/2017/04/12/bad-times-for-active-managers-almost-none-have-beaten-the-market-over-the-past-15-years.html
@CE
It’s not a sellers’ market if there are no buyers.
There are lots of expensive houses in the Uplands, way, way more expensive than the same houses would have been a couple of years ago. But as is the case where you live, there are few buyers. Very few. And most of the listings are now relistings, at lower prices.
If the unrealistically high prices folks are asking come down enough, the move-up crowd may start moving up again, which would create a lower priced new listings for every higher priced sale. Then everyone will say, hey prices are dropping like a stone, panic will set in and the market will collapse.
$10,492 Tesla Model S Maintenance Costs After 300,000 Miles
OK, it didn’t include tires, but still…
https://cleantechnica.com/2017/09/05/10492-tesla-model-s-maintenance-charging-costs-300000-miles/
False. All the non-sellers are just as responsible for inventory levels (which affect prices) as the sellers, so they’re in “the game” too, whether they’re aware of it or not.
I still don’t believe that this is possible. If houses are listed and sell immediately, then we can be sure there is an excess of demand. The natural response of sellers under those conditions is to list subsequent houses a little bit higher. Then they begin to sell a bit slower because of the higher price. Eventually DOM returns to more normal levels for the property type as sellers and buyers are balanced.
And Richard Florida aspires to resemble Herbert von Karajan. There’s just that little extra “je ne sais quoi” you only get with former Nazis.
Don’t mention the war.
But why would you eliminate the two million and up?
Surely there are places that are worth more than two million.
Okay, that’s it. In just a couple of comments I’ve called myself Frank and Shirley.
https://youtu.be/iRsmLcsP38A
And yet property values have not gone up in your neighborhood. A bit of a Catch-22. Houses in your neighborhood are selling fast but not for any more. That makes me think that at current prices, supply and demand are in equilibrium despite that homes are selling fast.
And let’s be frank, the days on market indicator can be played. It isn’t that good of an indicator as it only shows how many days the property has been listed on the Victoria Real Estate Board’s data system – not how long the property has been for sale. An agent may sell the home internally within his company before putting it on the system. Then when it’s put on the system the count would show that it was listed and sold on the same day. Up goes the sign, then the sold sticker. It would be nice if the counter showed the number of days under contract.
Some of the downtown core is pretty short of listings. Once you eliminate the two million and up it really starts to look thin on the ground. On the other hand there is still a reasonable number of listings in Oak Bay most of which are not at a reasonable price.
Most homes in my neighbourhood would sell for less than 1.5 M if they came to market. But currently (as of last night) there are no SFH under 1.5 M on MLS within 1 km of my house in any direction. That is remarkable to me. When we purchased there were dozens of houses listed at any one time in this area. This makes now a sellers market. If you wanted to live in this particular area you would have to jump on any home that came to market, not be picky, and probably pay top dollar.
Just saw this on redflagforum – looks like the new changes to B-20 might be announced officially tomorrow – then we will know when it takes effect.
https://article.wn.com/view/2017/10/16/Media_advisory/
But that’s just you. One cog in the wheel. There is a wide spectrum of houses and buyers that do match up. Hundreds of households do so each month.
And yes you would be selling your home for the highest amount in history. But so where home owners in 1982 and 1994.
But there are homes in your neighborhood that are worth under 1.5 million and there is a lot of them. They just are not up for sale. But then you can be choosy because you’re not buying. Nothing will be good enough for you, because you can hold out for perfection. Once you put yourself in the market and start actively searching your perception will change and after awhile you will start to make trade offs. But at this point you won’t sell unless you found the perfect house.
That’s why the only people that have an effect on prices are active sellers and active buyers. They are the only ones in the game. The rest of us arm chair athletes.
Five-minute clip of Richard Florida discussing the cities that have the best shot of winning Amazon’s HQ2 bid (spoiler: Vancouver isn’t one of them):
https://www.ctv.ca/YourMorning/Video/The-bidding-war-for-Amazons-new-headquarters–vid1232944
As an aside, Richard Florida is the silver fox that I aspire to resemble when I reach middle age.
Why is the market still hot? Inventory or lack thereof to be precise.
In practical terms if I wanted to sell my nice but not fancy Fairfield house I could sell it in a matter of days for more money than ever before in history (though conceivably a teensy bit less than earlier in the year). OTOH if I was just moving here and looking for a similar house closish to the water in a desirable core area there is practically no selection for any price, and approaching zero under 1.5 M.
If we’re at the 10 year average – can we stop calling it a “hot” market?
Nope. Even though we are at the 10 year average, it is still called a hot market.
WTF! It doesn’t really make sense does it. That’s because the ten year, five year or three year average has little meaning. We are not in the same market as we were in 2007, or 2010 or 2015. What is important is the market we are in today.
@Marko. Good point, one extra weekday this month compared to last year.
Thanks Leo!
Amazing, an agent who can predict the future. Pump much ?
Even then the sales will be down from a year ago which is all that matters. 10 year average is irrelevant with changing demographics,rates etc.
Two full weeks plus a Monday/Tuesday to end the month I think we will likely clear 600 on the basis of those two days ending the month.