October 15 Market Update and the Vancouver Ratio
It’s often said that real estate is local, and that is partially true. Local factors do tend to dominate, however it is worth considering that even between markets, one house can be substituted for another. The further the other market is away, the less perfect that substitute, but there is always some connection between markets. You might think of real estate markets in different cities as connected by elastic bands. If one goes up it pulls those next to it up, while at the same time it is pulled down by those neighbouring markets. The further away the market is, the weaker that vertical pull is.
We saw that pull happen in 2015 and 2016 when Vancouver exploded and pulled us up (the mechanism being Vancouver buyers coming over) while we pulled them down (by those same buyers adding supply to their market and new buyers choosing the much cheaper Victoria market). To compare the house price ratio between the two markets, we can look at how values have changed over time. It’s not easy to get reliable long run price data for Vancouver, and the MLS HPI benchmark only goes back to 2005. However I’ve used the MLS HPI benchmark to anchor the Teranet index and thus compare prices back to 1990. Thus we can compare the value of a Victoria single family house to a Vancouver one and see how that ratio has changed over time.
What’s interesting is that at the last price peak our prices were very high relative to Vancouver (and other markets like Toronto) while this time our prices are quite low relative to Vancouver (70% then vs 50% now).
Now as Vancouver’s decline becomes clear, the question is whether Victoria at half price of Vancouver is the new normal, or will we go back up, relatively speaking?
Also the weekly sales numbers courtesy of the VREB.
| October 2018 |
Oct
2017
|
||||
|---|---|---|---|---|---|
| Wk 1 | Wk 2 | Wk 3 | Wk 4 | ||
| Unconditional Sales | 151 | 276 | 664 | ||
| New Listings | 232 | 444 | 979 | ||
| Active Listings | 2551 | 2556 | 1905 | ||
| Sales to New Listings | 65% | 62% | 68% | ||
| Sales Projection | — | 650 | |||
| Months of Inventory | 2.9 | ||||
Based on reported sales, we are up some 2% from last year’s sales rate however as it was last week this is to do with how the weeks fell within the month than a real increase. That same change means we have an extra business day this month so that will add a few sales again at the end. Looking at actual pending sales for the first two weeks of the month, condo sales are about even with last year while single family is down 20%. There are 29% more properties on the market than this time last year.
Some readers were interested in months of inventory between high end and lower end regions. We know that the high end has been the slowest, and it’s interesting in September in Oak Bay only 10 single family properties sold, compared to 23 the same month last year despite there being more on the market. Clearly the high end is hurting, but Langford saw a similar drop in sales that month, with both municipalities jumping up to 9 months of inventory for single family.
If they were a bird lover ithey would have called it Bushtit Avenue. Definitely hated the deer eating his garden….
Not entirely. Interest, inflation and the fed impact what investors are willing to pay for what type of yield.
Home builders stocks in the US aren’t on sale even though they’re down 50% right now.
Patrick, I am no supporter of the vacancy tax. However, what would you have proposed Weaver do? Bring down the govt over one tax? I find myself agreeing with you on many things you post, but using the referendum to punish a party you don’t like seems misplaced. Vote in the referendum the way that makes sense to you, not because of some vendetta.
Oh, and if you want to quote someone, just use a greater-than sign “>” like in old email replies.
Dasmo, I can understand many people in Victoria having misgivings about deer! However, just in case it wasn’t entirely in jest:
https://en.wikipedia.org/wiki/Killdeer
If you have cash, buy. Stocks or land, depending on your fancy. People are completely confused that a stock market downturn is a bad thing. Actually, it means everything is on sale. Only fools go on a buying spree at the top of a market.
The only exception is if you need a house and are going to live in it long term. Then buy what you can (actually) afford and ignore the market for the next 10 years.
I guess the original developer really didn’t like deer….
That table of average prices reminds me of way back in Dec 2017. One month of low numbers. Enough to convince the bears that their lovingly awaited crash was here.
Oops
Yup. $1.462M
Seems like an OK amount for 12 acres and 2 houses + outbuildings.
Still love that move. Everyone likes ALR as long as it’s only used to raise some free range grass and some particularly well behaved varieties of pumpkins. As soon as it’s a real productive farm people quickly decide they’d rather have a development after all.
Yeah $1M is just another number, but it still sticks out when you look at it.
If they both crashed simultaneously, the economy would enter recession and, depending on the severity, interest rates would be slashed anywhere from a little to a lot (i.e., back to near zero).
Meanwhile, savvy investors would take advantage of the situation by buying key stocks and real estate properties low, holding them for a few years, then selling high.
Greens blew it, and allowed the spec tax to go ahead.
Resort communities like Kelowna expect to be hurt economically by this silly tax. “West Kelowna mayor Doug Findlater, who has led the charge against the tax, expressed dismay at the changes, saying they will do little to address concerns from mayors that the speculation tax will harm development and economic investment in communities.”
Next step for voters opposed to this “tax the rich so they go away” NDP/Greens plan is the upcoming referendum on proportional representation. When that fails, the Greens future is bleak, they will panic, and their coalition with the NDP will likely collapse.
)) hawk: Very scary chart, looks like the abyss ahead
There are scarier looking “abysses” (that never happened) looking back in time on that chart.
Normally buy gold.
I’m curious about what investors do in times of recessions when the real estate markets worldwide decline at the same time as the stock markets crash. I’ve never been an investor, so I honestly have no understanding of what will happens if both the real estate market and the stock market crash simultaneously. Do investors hold and pray, do they sell for a loss, do they simply liquidate all assets and start over? Does anyone know?
Give it time, Victoria is always late to the game. Praying for it to all be over ASAP is not a recipe for survival, but may make you sleep better… for now.
Very scary chart, looks like the abyss ahead. We all live in a Yellow Submarine.
:large
zillow.com has a few properties listed for Victoria now. They don’t have price history data though which is a shame, not even the past 3 years from BC Assessment.
realtor.ca just updated their UI but I don’t see any new features.
The real price drop eras I’ve lived through didn’t demand supply. It got down to folks fearful to buy (will I go underwater in a year?), investor money chasing other markets, and then those who had to sell took lowball offers.
“No, You’re the puppet.”
Back to real estate did Killdeer sell? Those realtor pictures were straight out of a horror movie and more importantly did they make a deal on the sheep?
Thanks for the inter-blog graphs Leo! A few other houses in mid level fixer upper range (750-1.2) went pending this week. Still can’t wrap my head around some of the millski’s being dropped for projects as the stock market tanks.
The biggest problem with the price dropping is we need more supply and realtors are going to be kicking themselves again by saying “don’t list to the spring” despite all the sales that will happen between now and then.
Strike 3 Weaver you are out…A vote for the greens means 0. NDP puppet.
LNG
BC hydro
Spec tax
B.C. Greens and NDP government strike deal on speculation tax
Finance Minister Carole James and Green Leader Andrew Weaver announced the deal at the legislature on Thursday, ending any possibility the Greens and Opposition Liberals could join to change or defeat the speculation tax.
Weaver had demanded the government agree to allow communities to opt-out of the tax, which was the position of mayors at the Union of B.C. Municipalities meeting in September.
But on Thursday he dropped that requirement and instead announced mayors could meet with James every year to express their concerns.
https://vancouversun.com/business/real-estate/b-c-greens-and-ndp-government-strike-deal-on-speculation-tax
There is a lot more land that could be developed if only some common sense existed. For example, 50% of the Agricultural Land Reserve properties have Classification 4-7 soils that are not viable for farming, however, these undeveloped privately owned properties are popular with municipalities because they reduce the need for municipalities to own green space. Let me provide a couple of examples of a municipality trying to curtail development on privately owned land because it’s supposedly arable:
Vandekerkhove Farms cleared 25 acres of forest land behind Victoria Genera Hospital after Saanich refused to consider it for a sewage treatment facility. Saanich Council’s rationale for refusing to consider developing it was that it was precious/holy farmland – but then after the land was cleared to plant hay Saanich Councillor Vic Derman was quoted as saying “I’m very disappointed that this significant area of forest will be taken down.” Given Derman’s strong support for ALR land retention in private hands one would think he’d be happy that Vanderkerkove’s land clearing efforts allow him to graze couple head of cattle.
I note that there’s a piggery in the cards for Sooke…
That’s a remarkable stat.
I’d tell you that I’m shocked that prices haven’t tanked hard, and fast. But I’m not.
I like your graph that shows historic benchmark prices for Greater Victoria relative to Vancouver. I think a similar phenomenon would present itself if you compared historic benchmark values in Victoria versus mid-Island communities. When people aren’t bound to a location for employment or other reasons they have an opportunity to take advantage of large market price differentials. It seems to me that the underlying factors would result in upward movement on prices in the lower priced communities – but that could occur gradually and if it does it will likely be tied to baby-boomer demographics. Being able to retire five years early or significantly increase your retirement savings simply by selling your home in Community A and moving nearby to Community B holds appeal for a lot of people.
While Barrister doesn’t understand why ppl will pay $1M+ for a skybox, this buyer doesn’t understand why we pay $1M+ for stampsize lands.
5951 Killdeer Rd ,MLS 397207 – $1.4M for 13 Acres of land!
only 30 mins drive away from DT, airports, ferry, hospitals (x3), Costco.
Lands are still very cheap here in GVR.
I wouldn’t say I didn’t bat an eye at the cliff on the graph. That was the part I found alarming. If there’s a reporting difference, it shouldn’t be that hard to track down. There was an HMDA reporting difference which came into effect Jan1st 2018, but that’s a US agency. Better Dwelling and a handful of other news outlets seem to have been “taken in” by that data as well. So who can track down the reporting difference?
It might change in the spring but so far I am not seeing a lot in the way of real price drops. Most of the reductions are only a few percent and seem pretty typical for this season.
Again it’s the opposite. CoV has the highest percent of low income people. Back to my brother, he has no money and can’t afford a car or property, so he rents downtown and walks/buses. Transportation and time costs weight heavy for suburban living, it’s a luxury for people who want more space.
https://censusmapper.ca/maps/844?index=1#9/48.4009/-123.3792
About 85 per cent of first-time buyers reported spending the most they could afford on their property. I bet this went up quite a bit since the stress test. Max you can afford has a lot more buffer now than it had in previous years.
https://www.cbc.ca/news/business/cmhc-budgets-homebuyers-1.4868418
Has been an uptick in over ask sales in the detached market. 12% in the last 30 days. Up from merely 5% in the previous 30 day period.v Over asks mostly in the lower end of detached ($600,000 range)
This is part of it, but I would hazard a guess that most people do not have the means to make this decision. A lot of people live further out because that’s what they can afford.
No, the data feed of offers that have collapsed (between going unconditional and closing) is not available to realtors. There may be some way to reverse engineer that (by monitoring properties that are pending but don’t transition to sold status) but this isn’t trivial.
It isn’t strictly our “middle” by numbers. The price range would be narrower if we were to split the sales into three equal parts. That said, average price in the core has been just over $1M every month in 2018.
Now that’s a straw man. No one is arguing to create cities out of neighbourhoods, cities that have never exsted. My reduction-to-absurdity point is that a city isn’t defined as the area that contains all the amenities anyone ever uses. That’s essentially a metropolitan area, which can exist just fine with multiple government entities. With Dasmo’s logic, Duncan then is not a legitimate entity because its residents have to go to YYJ or YCD to catch a flight…
Barrister, I’d love to have you join us, I really would. But I worry that the Fairfield/Rockland super-city would be just a bit too big for one local government to manage. 🙂
I’m just marveling that this is our “middle.”
Of the various properties I’ve been watching, I see a number of them are now pending at over ask even with 10-12 or more DOM. Seems odd to me that if the house didn’t have a contract after the first couple days on market, that it would end up with a contract over ask a week or two later.
Caveat: Actually Rockland has a higher percentage of renters than Fairfield. The majority of the old houses are either rental apartments or condos most of which are rented.
Rockland has a patina of the past but it is no longer a prestigious address. Maybe Fairfield and Rockland can separate together.
Is there any way of seeing collapsed offers over the last 3 months? It would be interesting to see how many people are still unrealistic regarding how much they think they are able to pay for a home and the reality of today’s available credit.
The sign at YYZ doesn’t say “Welcome to Mississauga” either, because it serves the entire metro area which informally goes by “Toronto”.
Yes there’s advantages and disadvantages for each model, but living in Ontario I can speak from experience amalgamation of cities, burbs, towns, townships results in a dysfunctional mess with little benefit. Ignore Ontario’s mistakes at your peril.
It’s funny, amalgamated City of Toronto recently voted to keep its elevated highway in the downtown core at huge expense, because it saves something like 3 minutes of driving time for the suburban voters in formerly separate Etobicoke, Scarborough, etc. Amalgamation can actually be quite costly because of these conflicting priorities.
And that bridge should have a toll 🙂
Free Fairfield! Why are we not a separate city? More populous than View Royal! Better looking than Langford!
Why should our destiny be chained to the dreary skyscrapers of downtown or the snooty aristocracy of Rockland.
Plenty of room to develop our own airstrip, hospital and Costco in that large undeveloped area (Beacon Hill Park).
Disamalgamation Now!
It is absurd that we are a bunch of separate cities….
The real irony is the sign at the airport doesn’t say WELCOME TO NORTH SAANICH….
Their are benefits to being divided without doubt but there are disadvantages. One advantage is the tiny city of Victoria is footing the bill for the White Elephant that really serves the cities of ESQ and the others in the WestShore….
It was reductio ad absurdum, thank you very much! Always a pleasure.
Nice strawman…. The city of ESQ does have the Canadian pacific naval base though….
Ah but there’s no IKEA on the island, so I guess we’re really part of Vancouver. Oh but wait, there’s not even a Canadian Army base in BC?! How will we protect ourselves from an American invasion by land? We can’t exist without the rest of Canada, I guess the whole country is really just one big city, huh. Hmm… doesn’t “Canada” come from the Iroquois word for “village”? Ah it all makes sense now!
Lucky for me my city has a hospital. But not an airport unfortunately….
None of these places can exist on their own so it’s ridiculous to think of each as it’s own city. Victoria doesn’t even have a hospital for instance….
It’s the other way around: people choose where to live based on their priorities and trade-offs. Living in the CoV is a conscious choice to be close to everything – the short commute is no accident. For example, my brother doesn’t own a car, so he chose to live in the CoV so he could walk to work and amenities.
This is the least bad option if amalgamation happens. It’s silly to pretend the southern tip of Vancouver Island is actually one big city, all the way from the Town of Sidney to Sooke, glued together by farmland, forests, and sprawl.
What happens to all those cars that go into town and don’t come out? 🙂
Now that I live on the other side I can tell you without doubt there is more traffic going into town then out. I feel lucky I just hit the tail of the crawl because I see it go on as far as the eye can see!
A lot of traffic is simply school drops and pickups. There is a huge drop in traffic in the summer. I suspect UVic being in summer mode also affects this.
I have asked this before but does anyone know how many jobs are actually in the downtown core? If I had to guess I would wager less than the TD Center towers in Toronto.
I dont get the impression that anyone really has a good handle on who is travelling, why and where to. Some mornings there seems to be almost as much traffic heading out of the core as there is heading into it.
I am sure everyone has an opinion, but I figure there should be a “core” a “westshore” and a “rural Saanich”. Central Saanich, North Saanich, Highlands, and rural View Royal could go with “rural Saanich”. The Urban containment boundary makes a good cutoff.
https://www.crd.bc.ca/docs/default-source/crd-document-library/maps/census/regional-urban-containment-and-servicing-policy-area-(rucspa)(amended-feb-2009)-.pdf?sfvrsn=2
I think this section limits the total credit for one property:
It is strange, though. If you and your spouse own two vacant 400k condos, you can exempt them both (2k credit each). Reading this section seems to say that one vacant 800k house owned jointly will only get half exempted.
Don’t we have an example in this thread with VicTRenter? Place required upgrades which pushed the overall cost too high and s/he bailed. If those costs were significantly lower, that deal gets done.
I’m sure most buyers of places that need work will budget the required remediation as part of the purchase price – so when construction is expensive, it most likely pushes down the prices of the crappier places and increases the prices of the new/no work required places.
The value of tear-downs and bare land is probably not too far off something like (land + construction costs = rough overall value)…ignoring lot desirability.
The effect may not be significant, but I just can’t see how one could argue that it has zero effect.
I can’t quite wrap my head around the wording for the $2k BC credit. Can two owners (Joint Tenants) both apply their $2k credit toward the same property?
Edit, found a definition: 8 (2) (a) owners who are joint tenants are considered to have equal interests in the residential property;
You are right. I was mistaken and was just trying to read that same site.
That exemption is for “strata accomodation properties” which is a specific class of strata properties: https://info.bcassessment.ca/Services-products/property-classes-and-exemptions/classifying-strata-accommodation
Middle price range ($750k-$1.25M) has been the most active all year up until September when it seems to have caught up with the lower end.
Actual Bill posted here:
https://www.leg.bc.ca/parliamentary-business/legislation-debates-proceedings/41st-parliament/3rd-session/bills/first-reading/gov45-1
Seems like a bit of an enforcement mess to me. Looks like strata properties are all exempt for 2018 and 2019? Weird.
Edit: This is not correct, see Leo S comment above.
As Dasmo mentioned, I suspect this is more about where people are commuting to than their attitude. If you live in Langford and work downtown it’s a lot harder to ride a bike than if you live in Victoria and work downtown.
You’re probably right that amalgamation isn’t required for transit, but it sure would be easier if there were only 3 or 4 munis rather than 9.
Transportation is intimately linked to affordability and is thus on topic!
Depends. If market value is below construction costs then yes, places just won’t get built. If market value is significantly above construction costs there is little impact. Raised costs lowers profit, but it won’t sell for more unless market value goes up.
This kind of behavior seems more common for high end properties too. They’ll often be for sale near continuously for years on end. You’d think that would get quite annoying accommodating showings for that long.
What about a few of the really silly munis amalgamate first? Central Saanich and North Saanich for example.
View royal should merge into Saanich. Same with highlands. Let’s start with the easier ones.
Gonna see a lot more failed sales (expired listings) if it keeps slowing down. Already a spike this fall but in a really slow market we would see twice as many.
Ok, so Sannich and Victoria Amalgamate first 😉
Kitchener is 200,000 people. Victoria is 85,000 people. If we amalgamate we simply become the city we actually are which is a city of 380,000
No, I’ve given you examples where amalgamation has hindered your vision instead of helping it. I also gave an example I’d prefer Greater Victoria to follow: Kitchener & Waterloo, the two most urban parts of Waterloo Region (which contains other cities, townships, etc.), coordinated together to build LRT running between their cities. Without a doubt its LRT project would never have been approved if the region was amalgamated (rest of it is very anti-transit, including the other big “city” which itself is 3 former towns amalgamated!). CoV and Saanich for example could build LRT from Downtown to Uptown and the University, which would look very similar to the LRT in KW.
At risk of annoying Leo for continuing off-topic on this tangent, I’ll stop now.
You can walk downtown from anywhere within Victoria’s borders…. Victoria doesn’t need a tram, the CRD needs a tram. You are further rendering my point that we need to Amalgamate to coordinate.
How does an uncooperative region prevent sprawl?
My point is this “coordinated vision” becomes sprawl. There’s a diversity of urban/suburban/rural forms and lifestyles, but car-dependent sprawl outnumbers the rest.
Hamilton could get an LRT for free (100% funded by province) but it might be rejected by suburban and rural voters next week. London rejected LRT almost immediately with possibility of same funding arrangement. Look at the boundaries of these “cities” and it’s insane who gets a say in how the downtowns are planned.
No, they still need to get to work and thus have a “commute” even if it’s short. CoV has twice as many people taking transit to work compared to Langford per capita (14% vs 7%).
You need it so we create a coordinated vision for the CRD. But more importantly a city of 380,000 is more eligible for more funding.
If we could achieve this without amalgamation great but so far we haven’t….
Victoria has the least amount of commuters because, well, they are already in Victoria….
CoV is the only municipality where the majority don’t commute by car, only 44% do. Saanich is 68%, Langford is 79%, and some others are higher. (2016 census)
Amalgamation creates a majority of suburban/rural voters who live car-dependent lifestyles. Look to Toronto and Hamilton at what happens: They block transit projects.
You don’t need amalgamation for a BC Transit bus to run between Downtown and the West Shore, so why do you need amalgamation for a train? The SkyTrain didn’t require amalgamation. Kitchener and Waterloo didn’t need amalgamation for LRT.
you are taking logics… people dont believe in logics … you have my vote if you run for mayor
Doubt it. I believe affordability here is going to be improving. Just that, it won’t be because of the actions of local government.
Oh it feels so weird when this happens: I agree with you.
There is not a single thing Victoria Council can do.
The only real solution is near impossible….
Amalgamate and build a Tram link from the West Hills to Downtown and Zone all the vacant land along it for mixed use, row houses, public space, commercial and rental low rises.
This is only the West Hills vacant land. There is also Adams Storage and the Fort Victoria while not vacant are large areas that could be redeveloped in to amazing family friendly, high density neighbourhoods with a short tram ride to downtown Langford and Victoria.
IMO, regardless of who the contenders are or their platform on housing, not one of them will have have an even marginal effect on housing affordability…
Not any more than a builder will voluntarily take a loss on a spec build. But the builder’s lenders won’t wait for prices to go up. And these are the transactions that set prices.
And after prices go down, builders either work for less or they don’t work. Not theory, that’s what happens every downturn.
Grant and Owen have overindulged in the 10/17 legalization festivities.
Great example Patriotz, which is why there is 28 slashes in the past 24 hours and is much higher than I’ve seen in awhile. Which is also why the Canucks had to cut prices for most games. When everyone loves a winner they will pay up, when the glow wears off, they don’t.
Boo.
pfft. I’d like to hear where that number came from.
The brainiacs behind the owner-builder exam.
Not sure if this was posted: https://globalnews.ca/news/4551553/victoria-mayoral-candidates-housing-public-consultations/
The question of: “1) According to the Victoria Real Estate Board the average price of a detached home in Victoria has gone up from $553,900 in October 2014 to $883,700 in September 2018. What do you plan on doing to address sky-rocketing home prices in the region?”
Michael Geoghegan: “By rescinding the Step Code and having more timely decision making we can reduce the cost of constructing new housing by $150,000 per unit. We need to make it easier for people to build garden suites and have other forms of legal secondary suites, not only to increase the volume of rental units, but to assist people in qualifying for mortgages.”
Stephen Hammond: “I will give certainty to neighbourhoods and developers by sticking to zoning in neighbourhood plans. I will ensure the city shares in the building boom by requiring developers to give Community Amenity Contributions, which can go towards affordable housing. When Catherine Holt, CEO of the Victoria Chamber of Commerce, said we have to separate the housing “market” from affordable housing, that’s a sign even the business community knows government has to help with affordable housing, making it easier to work with the province, the federal government & non-profit agencies to continue finding solutions to our affordable housing crisis.”
Lisa Helps: “We have no tools to deal with price escalation of single detached homes, especially in a built-out city like Victoria. To make home ownership more accessible I would:
• Continue to encourage partnerships between BC Housing and private developers to offer below market condos for purchase.
• Create opportunities for gentle density – such as strata fourplexes – in appropriate areas. In exchange for density, require one out of four units to remain affordable in perpetuity.
• Create a Community Land Trust (CLT) where willing homeowners could put their property into the CLT and create “speculation free zones” in perpetuity.”
Grant, fundamentals are about the best way to determine whether a market is affordable, but it’s also fair to say it’s not the sole actor of prices. So, never mind fundamentals for a moment. Owen is marketing. It’s designed to foster confidence and construct a justification for prices in a presently failing market, and it’s probably a good idea for him to do exactly that right now. But even with fundamentals disregarded, his assurance isn’t really very convincing.
Vancouver has been expensive for a long time – in fact detached homes have typically run about 60% of the average earners income, when averaged between 1986 to today. High levels of renting have in part, permitted that to continue. But only several years ago (no where near 20 years) that went all to hell, and in a violent hurry. Here, have a look:
You see from around 2007 forward the systemic change begins, aided by a sharp change in fundamentals (interest rates), but the lift is so broad and continuous that we might surmise that another force had entered the market. IMO, it is that force that Owen is asserting as now being essentially permanent. But we can see – it hasn’t been there, to the point where virtually nothing is affordable, for very long at all.
If we presume this was from global hot money, I don’t think I’d bet the farm on that continuing ad infinitum. By definition and as we’re now seeing, that’s a fickle source of money. Vancouver is probably going to always be expensive, but I do believe it will eventually go back to its longer term levels of affordability. And that, is a long way down from where it is now. And, if we went by fundamentals only, it’s far longer still. And with respect to fundamentals, I wouldn’t care if God himself said so: a city cannot have all of its home prices at 120% of gross income in perpetuity. Mathematically and economically, it’s impossible.
So how far will this go? Let’s find out, and I’m sure at least some folks will be surprised whether it be because the fall was more, or less, than they expected or hoped.
The problem is, those “some” people are, statistically, almost everyone that lives in the Vancouver area.
So you really think it has zero effect on prices? Isn’t there a poster below who didn’t make a deal on a house because the upgrades would be too expensive? You think someone is going to voluntarily take a big loss on a house they upgraded (when they’re not under duress to sell)?
Sure, if everyone stopped buying building materials then prices would come down, but that isn’t the reality today.
August 2017 prices for a Wayerhauser TJI 560 joist: $4.82/ft
Todays price: $6.29/ft
Interfor Corp. plans to cut production by about 20 per cent across its sawmills in the B.C. Interior as it faces declining lumber prices and higher log costs.
The pullback comes as lumber prices for Western softwood have plunged from over US$650 per thousand board feet in June to under US$400 as concerns mount about the U.S. housing market.
The drop in lumber prices has sent industry stock prices lower for a variety of Canadian players since the June high. Canfor Corp. is down 38 per cent, West Fraser Timber Co. Ltd. is down 34 per cent, and Interfor is down 39 per cent.
https://www.bnnbloomberg.ca/interfor-cutting-back-b-c-interior-production-as-lumber-prices-plunge-1.1151873
This is really going to knock around the wasps’ nest:
…
…
Latest from Owen Bigland
https://www.youtube.com/watch?v=3snymc4CFuc
I’d believe a sharp increase in the volume of reverse mortgages, not a quantum leap.
Are NHL tickets expensive because of high players’ salaries, or are players’ salaries high because fans are willing to buy expensive tickets?
Yeah big under ask sales are quite rare. Usually it is the sellers that slowly decrease price or relist lower until they hit market value rather than accepting a lot under ask.
This is perfectly logical too. Unless you are in a desperate rush to sell or the market is crashing it doesn’t make sense to take a lowball. Many buyers don’t submit lowballs so you are likely better off relisting a bit lower with the hope of attracting more offers just a couple percent lower than ask.
Can someone explain the market psychology of unmotivated sellers? People talk about motivated sellers as if they are the rarer breed, but it seems counter-intuitive to me.
Apart from investors, I assume people list because they want a new living arrangement. Why do they let their house languish for months without lowering the price – aren’t they motivated to change their living arrangement? Are they all waiting to sell before buying?
Sidekick.
Kind of like gas prices, isn’t it. When the trading price of oil goes up, vendor prices rise immediately. When trading prices go down…takes a bit longer!
Interesting story of if you spend the money you can build a house to withstand almost anything. Very impressive. Most people probable thought he was nuts.
https://weather.com/news/news/2018-10-16-mexico-beach-home-survives-hurricane-michael
I mean prices of lumber are still way up at the lumber yards. You better believe that construction costs have some effect on overall home price though.
Houses sell for what buyers are willing to pay for them, not what it costs to build them.
Can’t wait for those cheaper lumber prices to make it to us consumers. Prices still up at least 25-40% over 2016/7.
More reverse prospecting inquiries from agents of motivated sellers. This one called the newest price drop “crazy” because it was below even assessed value. The notion!
And in an another important indicator for housing, have a look at the precipitous drop in lumber prices:
Lumber prices on the whole, rise with demand, ie when people need to build things out of wood – like houses. Interesting graph, isn’t it? Looks like people got awfully excited about something rather quickly…and now, not so much. People who tell you RE is on the cusp of re-inflating – this, in part, shows you the fraud that that claim really is. Anyone recall Newton’s 3rd law of motion? 😛
For anyone interested in the “bigger picture”, you may be noting that alongside real estate beginning to fall globally, the auto sales market is also beginning to crumble across North America, Australia, China and Europe. While different media outlets will assign this reason and that reason to it, the common thread to them all is the slow choking off of credit, and rising rates.
Typically, one of the most visible manifestations of the “wealth effect” of rising home prices is new vehicle purchases and other larger ticket items or services (including renovations). IMO, auto sales are an interesting indicator as to how consumers are feeling about their finances and the economy in general. Like RE in Canada, this slowdown in the auto sector hasn’t suddenly fallen off everywhere without warning; it’s been bleeding in a lot of jurisdictions for some time, to varying degrees. It’s just getting systemic enough that Joe Public is starting to notice.
Seniors the first to crack as rising rates crank up debt stress
The storyline that debt levels in Canada are big but manageable is starting to unravel.
Oddly, it’s seniors who are showing the first signs of serious debt stress. In the second-quarter edition of its National Consumer Credit Trends Report, the credit-monitoring company Equifax reported yet another year-over-year decline in the percentage of people falling behind on their debts. The one group to buck the trend was seniors.
“We actually think that’s the start of some of the impact of higher interest rates,” said Bill Johnston, vice-president of data and analytics at Equifax Canada.
https://www.theglobeandmail.com/investing/personal-finance/article-seniors-the-first-to-crack-as-rising-rates-crank-up-debt-stress
Leo S: “What do they think happened, every senior rolled over in bed a year ago and decided to take out a reverse mortgage?
Obviously something changed in the data and the two periods are not comparable. That should be common sense.”
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it's probably exactly what happened Leo. The B20 test was looming and seniors wanted to help their offspring into the market beforehand.
https://www.theglobeandmail.com/globe-investor/personal-finance/a-better-way-to-tap-home-equity/article4179814/
"Retirees will find it harder to qualify for home-equity credit lines than reverse mortgages, said Mr. McLister, who is editor of the Canadian Mortgage Trends blog. "With a line of credit, a bank will review your credit history, your income and whatnot – it's like a full mortgage application. A reverse mortgage application is: Do you have a heartbeat and do you have [home] equity?"
))) rip: You may hear back from that seller if more time passes and the home hasn’t sold. It takes time for an involved seller to realize that they may have passed up their best option for a sale.
Very true. As fall/winter/slowdown sets in, that seller may ‘soften’ his position.
You may hear back from that seller if more time passes and the home hasn’t sold. It takes time for an involved seller to realize that they may have passed up their best option for a sale.
It’s a news site. All that maters is eyes…. For Betterdwelling a graph like this is the equivalent to a picture of a celebrity with a droopy, dimpled ass in a bikini
Vancouver continues its relentless deterioration. Condos have moved out of a sellers market for the first time in years and are rapidly approaching a buyers market. Inventory is up over 92% – my my, has sentiment ever changed.
https://betterdwelling.com/city/vancouver/its-official-vancouver-condos-are-no-longer-a-sellers-market-as-inventory-soars/
agree .. see more listing back on market due to financing
Yeah, this blog (especially certain narratives within) can lead one askew, as happened here.
Many readers saw a graph they liked and didn’t question it.
Kind of surprised Josh was taken in by the graph, to be honest.
I don’t know if most people would think of this, since they would’t really expect the situation to be as bad as it is. I don’t have kids, but I do wonder who can take all that time off work to spend the hours it takes to get their kids seen at a clinic. No doubt some parents have to make the call as to whether the trip is really needed, and this could have bad consequences for the child. It has gotten quite a bit worse in the past few years, and it looks like the problem will get even worse before it gets better.
There is a discrepancy in that a GP’s salary is limited by their per visit billing rate to the government; tech salaries are determined more by market conditions and the need for certain skill sets. So, whereas doctors used to earn more than tech workers, that seems to be changing.
I mentioned this before, but people should be letting politicians know if they are being adversely affected by the shortage of GPs. It takes longer to train a doctor than it does to build new housing, so changes have to be made stat (to use the medical term).
What’s truly alarming is that the people at Better Dwelling took a look at this graph:
And did not bat an eye at the idea that the rate of increase of reverse mortgages went from 22% to 46% in one month. What do they think happened, every senior rolled over in bed a year ago and decided to take out a reverse mortgage?
Obviously something changed in the data and the two periods are not comparable. That should be common sense.
Welll, another tough negotiating seller, despite us moving significantly they wouldn’t move much off their new ask. Cost of putting in a suite and new hvac would have pushed us into among the highest prices ever paid for a home in the neighbourhood.
One more house to visit, and if it doesn’t work maybe try an offer on a slightly worse neighbourhood, but a home that needs less work but also less long term potential. Guess it’s like the title of the blog!
On the low ball offer i’ll think twice about psychological price points. Might have been too aggressive despite some of the signals the seller gave. Goodnight Victoria!
@ Patrick
I’ve spent many years living in and visiting various parts of Van and have seen the effects on neighborhoods first hand; not to mention watching the effect this has had on family and friends; please, don’t even get me started on the Richmond council; not going to engage with you any further on this because you just don’t get it unfortunately.
))) Andy7: Take a visit to Richmond and look around; same story in West Van. Same story all over Van. Empty neighborhoods, it’s awful.
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I can’t imagine how you would have counted empty homes on your drive through Richmond. Or counted how many people are living in vans/cars. You don’t live in Richmond, so you should let Richmond decide what is and isn’t “awful”. Richmond city council did decide, and voted AGAINST an empty homes tax. Richmond city council believes it is only a small percentage of houses.
“(Richmond city spokesman) Townsend added that there are no firm numbers on empty homes in Richmond but most estimates show they represent a small percentage of residences.”
https://globalnews.ca/news/4322199/richmond-ghost-house-neighbour/
Vancouver has data on this, because they have an empty homes tax. Keep in mind that these “empty homes” are often second homes occupied less than 6 months – those count as empty. Anyway, Vancouver has found rates of 3-8% in various neighborhoods, with average 6% “empty” (occupied less than 6 months).
https://globalnews.ca/news/4068194/vancouver-empty-homes-tax/
You’ve concluded that it’s “awful” to walk through these empty neighborhoods. The highest rate of “empty” homes in Vancouver is the West End (8%). Have you found it awful to walk through the West End in Vancouver?
Yup, and I declare my rental income. I also claim the tax deductions for any expenses related to my rental suite including the mortgage interest.
@ Patrick
Patrick, what the heck are you talking about. You’ve completely missed the point. It’s common sense to not want to erode neighborhoods and communities with empty homes and all that comes along with that. If you can’t see that, then you need to spend more time living in neighborhoods and communities directly affected by this dynamic.
Very unwise. If caught an audit will be a nightmare on top of criminal charges.
I know people who don’t claim and others planning on not claiming and if caught think nothing will happen, they will just jack the rent up overnight to cover or kick them out. The lack of awareness and thinking they can do what they want to their tenant is mind boggling.
A balanced market doesn’t go up 6%. More salesman bullshit as behind the scenes they are scared shitless with fights over deals and financings not completing.
No mention of the hundreds of slashes the past few months either. Let’s not mention the reality just the spin as Vancouver falls off the cliff.
Anyone with a suite should report the income, even if it is a loss. There is a legal obligation to report all income. Failing to report income that carries a tax obligation can even be a criminal offence. Who doesn’t report this? Unwise.
The fact that most people don’t have reverse mortgages isn’t going to help the people who do.
Josh: https://betterdwelling.com/reverse-mortgage-debt-on-canadian-real-estate-rises-over-45/
Truly alarming.
=====m======
Canadians have $3 trillion of equity in their homes..that’s $3,000 billion, and you find it “truly alarming” that seniors have taken out a total of $3 billion In reverse mortgages? You do know what an “un-alarming” fraction 3/3000 is don’t you?
Andy7: Take a visit to Richmond and look around; same story in West Van. Same story all over Van. Empty neighborhoods, it’s awful. People living in their cars/vans because they can’t find a reasonably priced place to live while house after house sits vacant and overpriced.
====n======
I’m not clear. When you looked around those beautiful rich Vancouver neighborhoods, and then saw people living in their cars/vans, were you moved by the noble idea that the people living in the cars/vans deserved to be inside one of those rich houses, or was it by the self-serving idea that YOU deserved to be living inside one of those houses, and something needs to be done by the gov’t to force the owners out?
What is business income, patriotz?
I mean you don’t understand what business income is.
You mean that money going into my chequing account every month is a figment of my imagination? You mean my tenant doesn’t pay rent?
CRA is a lot more concerned with going after capital gains than likely non-existent suite income. Big tax haul on a single transaction. And owner-occupiers now have to declare sale of their residence. Another household filing at the same address? Aha, a suite!
I know! Does CRA do a lot of tax fraud investigations in Victoria, or does it just turn a blind eye?
How are you supposed to cover it up when the renters of the suite are filing their taxes with the suite as the address?
If one is not declaring suite income to CRA, is one more inclined not to reveal the existence of the suite to StatsCan?
In other words, to what degree are the StatsCan duplex figures reflective of reality?
@ Patrick
It’s not a jealousy/envy tax. It’s a “holy crap, the bull is out of it’s pen and is wrecking havoc in the neighborhood and we need to catch it” type of reaction.
Take a visit to Richmond and look around; same story in West Van. Same story all over Van. Empty neighborhoods, it’s awful. People living in their cars/vans because they can’t find a reasonably priced place to live while house after house sits vacant and overpriced. And it’s spread to other areas as well.
Whether we like it or not, the market needs some help, and this may cause some temporary pain; if the Libs had not been so corrupt and had actually done their job, we likely wouldn’t have to be subject to these measures now being put into play.
Do I agree with all the NDP is doing? Absolutely not. But can I see the greater good at play with many of their policies? Yes.
@ Local Fool
What else is he going to say? The market is tanking? Unlikely that they’re going to be honest about the real state of affairs – this is their bread and butter we’re talking about.
https://www.cheknews.ca/victorias-third-quarter-aggregate-house-price-up-6-8-per-cent-year-over-year-royal-lepage-survey-499064/
The aggregate and median prices of homes in Victoria have gone up by more than six per cent year-over-year, according to the latest Royal LePage House Price Survey.
The report released Tuesday morning says the aggregate price of a Victoria home increased 6.8 per cent in the third quarter of 2018 to $680,113.
The median price of a two-storey detached house has gone up 7.1 per cent compared to the same time last year to $921,760, a bungalow has climbed by 6.2 per cent to $744,804 and the median cost of a condominium is $491,932, an increase of 7.1 per cent.
CRA collects this data via the census. Suites are classified as duplexes
))) Spec tax legislation tabled: https://vancouversun.com/news/politics/government-tables-legislation-on-speculation-tax.
You gotta love government budgeting practices. They announce the tax, and the estimates to raise $201 million tax revenue, based on 32k homes subject to the tax as of now. But the estimates are based on no one actually doing what the tax is supposed to encourage (renting or selling your second home).
Liberal leader Wilkinson has a better name for the tax ….”jealousy and envy tax”
Unless the Greens actually vote against this silly Jealousy&envy asset tax, those opposed to this NDP/Greens creation can express their opposition by voting against the proportional representation option in the upcoming referendum. Feel free to say “goodbye Greens” as you vote NO.
Vancouver housing market still ‘taking a breather’ but runaway home prices could return
It’s a “soft landing,” according to Royal LePage CEO Phil Soper, who says their latest house price survey shows the effects of government measures to cool things down.
“But it won’t stay this way for long. Household formation in Canada… is going to grow rapidly,” he predicts.
Soper points to people coming to the region from out-of-country and out-of-province, as well as the large number of millennial wanting to buy. “You take those three drivers of household formation and this quiet time, where house prices are going up by low single-digits, it won’t last.”
https://www.citynews1130.com/2018/10/16/housing-market-runaway-prices/
No need to wonder Andy, it is. The pumpers inside the bubble can’t see out. The massive HELOC debtors will bring down this house of cards.
Tapped HELOCs Owe An Average Of Over $97,000
BC has the highest average tapped balance at $123,797 in Q1 2018.
https://betterdwelling.com/canadian-real-estate-owners-that-tapped-a-heloc-owe-an-average-of-over-97k/
https://betterdwelling.com/reverse-mortgage-debt-on-canadian-real-estate-rises-over-45/
Truly alarming.
Mr Weaver lives in Gordon Head.
According to the latest MLA disclosure Weaver owns 4 properties:
– personal residence in Victoria (that’s a postal address, not necessarily CoV)
– recreational property in Parksville (outside spec tax area)
– two investment properties in Victoria (presumably rented out)
So it doesn’t look like a personal interest. Perhaps he thinks there’s a political upside for the Green Party to stand up for the empty house crowd.
https://thetyee.ca/Documents/2018/01/22/PDS_WEAVER2017.pdf
@ Leo S
The odd thing about Weaver was he was against LNG but let it roll through; meanwhile, he chooses this battle to fight — I wonder if he has a vested interest in this issue.
@ CharlieDontSurf
1.9 M for a duplex — sometimes I wonder if our real estate market is one big Ponzi scheme.
Most owners of suites in properties bought recently don’t get any taxable income from them after expenses anyway, so it doesn’t matter much to the stats whether or not they declare.
And with the VREB’s wonky and unhelpful “anything over 3 months” definition of a “local buyer” we have no hope in hell of figuring out how many out-of-towners are really buying here.
I was a local buyer from Calgary! In the last year, I’ve met local buyers from Surrey, Vancouver, and Ottawa. Everyone’s a local buyer! Except of course for those who plunk down money super fast—yup, they’re the only out-of-towners who show up in the stats.
This is important because, if we accept that out-of-towners buying in Victoria are likely generally of disproportionately higher means, then it really hampers our market analyses when we can’t determine how many people fall into the true out-of-towner category.
Another difficulty in figuring out whether prices are supported, in my view, is that we tend only to look at incomes and never at wealth. When somebody with median income and a large down payment buys a house, looking at the stats, it appears as though this person may have bitten off more than they can chew. But in fact they did not.
Also, there are suites. Most people don’t declare suite income so, looking at the official published stats, it appears as though people with x income really can’t afford y prices, but in reality it’s x income + suite income.
And we don’t really know how many suites exist, because they’re mostly illegal everywhere in Greater Victoria…
Spec tax legislation tabled: https://vancouversun.com/news/politics/government-tables-legislation-on-speculation-tax
This could still fall flat depending on the greens. Weaver has been against it recently
Ha!ha! sorry – I misunderstood your statement 🙂
That’s what I said. What are you disagreeing with?
No because the salaries are higher in those cheaper locations. Salaries for tech here are paltry.
Isn’t that agreeing about the salaries?
Detroit was the automotive mecca in it’s day. With the headquarters of the big 3 – Ford, GM & Chrysler in Detroit, it’s no surprise that streets & boulevards became most important. It was all about driving.
While I agree that the RE here somewhat hobbles the economy, I disagree about the salaries. I do a search every now and then to compare salaries in my field in technology. I find that a programmer could do much better in places like Ohio for salary and the houses are significantly cheaper.
If they want to attract more talent to the island, they need show that this is an exciting area to be in for a tech worker. Vibrant, growing, learning community with lots of opportunities at exciting companies. People will move even if housing is iffy for the right opportunities. Look at Silicon Valley – it’s been overpriced for decades and yet tech workers are drawn there for the opportunities to grow in their field with exciting companies.
I noticed one thing left out of the article and I wonder if perhaps it’s an issue. For anyone with a family, moving here is taking a gamble as there are no GPs accepting patients. All medical care comes via walk-in. For a young, single person they might not mind but for someone with young children, that is a real concern.
VictHunter: Hopefully, we can get a deal done in a range that still gives us enough money to go on Vacation and live the good life without ever using a Heloc.
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Sounds like a plan! Good luck with the hunt.
)) LeoS: you said that the rise since 2005 means that our bubble is smaller and thus any possible price decline will also be smaller. That is the part I’m objecting to.
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Well I didn’t say that nor do I believe that.
Completely agree, there are two reasons why it’s bogus:
Not impossible just requires custom programming. Not feasible to do with simple data exports to excel.
@Leif Nope Lotus was never in the cards for the family. To much house and landscaping work to make them family friendly and then I don’t think it is the best area. Our goal is a good school catchment within 20 mins commute to Saanich Uptown/Mackenzie area and big lot/house 5bd/3th close to nature without a ton of work to do. Fortunately, all most everything is close to nature and my dream of walking to the water might be replaced with a school field since it isn’t about me for the next 15 years. Hopefully, we can get a deal done in a range that still gives us enough money to go on Vacation and live the good life without ever using a Heloc. For all the doomsdayers posts on here, he has actually tempered my enthusiasm for spending our max budget.
Not irrelevant but you said that the rise since 2005 means that our bubble is smaller and thus any possible price decline will also be smaller. That is the part I’m objecting to.
For example, I could also say that since June 2016 the MLS HPI index has not changed in Vancouver while Victoria is up 20%. Therefore Victoria is in a bigger bubble than Vancouver and any possible decline will be larger here. Would you be ok with that argument?
As for the Vancouver ratio, the reason I mentioned it is due to the effect neighbouring markets have on each other.
LeoS: The only thing that matters in determining whether something is a bubble is prices and if they can be supported.
==v=m===
Well apparently the “Vancouver ratio” (the title of your main article above) is also important for you to track and tell us about, but we are only supposed to talk about absolute prices and if they can be supported?
I point out that our % rise (104%) in prices is less than Canada average % (114%) rise since 2005, and you declare this irrelevant. How about I call mine the “Canada ratio”, and then it’s as least as important as your “Vancouver ratio” topic post above.
Prices are important in spotting a bubble, but they are not the only thing. Rate of rise is also important as stated in this Barron’s how to spot a bubble definition as the “steepness and persistence of any price ascent as doubters and naysayers are swept away in a tidal wave of bullish froth,” https://www.barrons.com/articles/hot-to-spot-a-bubble-1513397223
I’ve found the charts you’ve posted relating to affordability really useful. (How affordability has changed over time, which takes into account interest rates, prices, and wages I think.)
Sometimes I check the Market Summary page & have feedback on that:
The MOI seem off or not useful. 4.5 doesn’t match the chart you posted. Maybe it should be broken down by type or region?
I like the median price breakdown into detached/town/condo but I’m also interested in breakdown by geography.
Automated summary is bogus, I don’t think anyone here is expecting large price gains: “If current market conditions prevail, you should expect the median single family home price to increase at a rate of about $101,000 (13%) annually.”
That seems to be their urban planning philosophy. Just saw this jaw-dropping before/after comparison of a downtown Detroit neighbourhood: https://twitter.com/DetroitStreetVu/status/1051486216837898241
Thankfully sanity prevailed and Victoria didn’t go down this path:
“Ah, lets make it easy to do the math. Take off an even million. And that way, we can keep the 8s.”
6012 Chancellor Boulevard, Vancouver
May 7:$2,888,000
Oct 15: $1,888,000
Change: – 1000000.00 -35%
July 2017 Assess. 2.75M
Most of these firms are subject to national or global competition. They cannot pay more than another employer where RE prices are 1/2 as high and remain competitive. Good example of how RE bubbles hobble the real economy.
In its bid for the new Amazon HQ, Vancouver famously pointed out how its tech salaries were among the lowest in North America, and Victoria likely isn’t much different, particularly if you strip out the jobs supported by the provincial government.
Throw in a factor of just over 20% for wage growth over that period and you still have an approximate doubling in price/real wage from 2000 to 2018
“…,Of course really it spent 222 days on the market and sold for 15% under original ask.”
Is it impossible to truly track this?
(Both under ask and Total Days on Market that is)
Is it not as simple as putting listings into an excel table, filter/sort, and compare on a weekly basis?
I feel this would take 20 mins a week to track.
The prices are easy to spot. Whether they can be supported is the really really difficult part
This is why unlike stocks, housing bubbles aren’t usually terribly hard to spot…
Speaking of detroit, it’s still amazing to me to look down some of those streets on streetview and realize that half of the cars are worth more than the houses.
https://www.trulia.com/p/mi/detroit/7612-dolphin-detroit-mi-48239–2050917013
No relation to Victoria, just crazy.
The only thing that matters in determining whether something is a bubble is prices and if they can be supported. Index values are not meaningful on their own. Prices could increase 200% in some market and that on its own does not mean there is a bubble. For example, if the average sales price in Detroit goes from $30,000 to $75,000 that doesn’t mean there’s a bubble in Detroit. But Vancouver going from $1.6M to $3.2M, probably a bubble.
))j LeoS: No, you cannot use Teranet house price indices to come to this conclusion. The Teranet house price index is 100 in June 2005 for every city.
So Vancouver average price is $1M? 100 in Teranet
Moncton average price is $189,000? 100 in Teranet.
==v====
No. I know all that Leo., but your analysis is wrong. If you re-read my post, you can see I am referring to the relative INCREASE in Teranet that happened from 2005 to now. Victoria in Teranet increased by 104%, and the average of the 11 biggest Canadian cities increased by 114%. It doesn’t matter the absolute number, it is the % increase that is the size of the bubble that was created during that period. For example, Hamilton increased by 118%, so their bubble during that period is bigger than ours, and it doesn’t matter (to me) what the starting numbers are.
No, you cannot use Teranet house price indices to come to this conclusion. The Teranet house price index is 100 in June 2005 for every city.
So Vancouver average price is $1M? 100 in Teranet
Moncton average price is $189,000? 100 in Teranet.
The only thing that comparing two index values tells you is how much the market has changed since 2005. Doesn’t say anything about whether or to what extent a market is overvalued.
$799,900. This will be reported as an above ask sale in 14 days.
Of course really it spent 222 days on the market and sold for 15% under original ask.
I know you later said 36% decline to 2005 values, but just to be clear:
According to Teranet, prices increased from 60.64 to 209.84, or 246%
Adjusting for inflation, 60.64 becomes 85.04 in 2018.
So inflation adjusted, it’s a 146% increase.
The other way around, it would require a 59% drop to get back to 2000 levels. That’s quite a ways from 28%.
@guest_50525 I’m curious to see what you end up buying after it closes.
You seems to be looking in various different places around town from your posts so I have never really been too sure…. unless your back to Lotus and the waterfront, those places must be well over 30 DOM now.
I see it has be re-listed so we cant tell easily. I cant wait until the DOM is stuck without re-listing and we can see every time they go to re-list pile up.
#buyingahomeandaninvestment
Pay more. Listed salaries for tech job openings is still pretty paltry.
@Leo S thanks for the neighbourhood breakdown! Interesting to see Gordon Head resist but also rise.
@RenterInParadise and @guest_50514 Thanks 1974 Grandview I hadn’t seen before but I’ll have to pass on. I wonder how much work it would to get either up to my families expectation!
Offer to go in tonight on a different area of town, not doing the 100k below ask but close and still a ton overassessment. Beauty is in the eye of the beholder and the one who will be living there and paying it off for the next 20 years. #buyingahomenotaninvestment
Greater Victoria’s tech sector still booming, but recruiting a challenge
… the tech sector has a $5.22-billion annual economic impact on the region, with combined annual revenue of its 955 companies of $4.06 billion, and employing 16,775 people directly.
https://www.timescolonist.com/business/greater-victoria-s-tech-sector-still-booming-but-recruiting-a-challenge-1.23462806
A good idea. What other charts would people find useful to be permanently located somewhere and updated?
Definitely in 2018. I don’t think you can definitely say we are past it yet
Don’t know if this has been posted here, but it’s a good summary. Steve Saretsky’s latest video:
https://www.youtube.com/watch?v=YFXwsJzy6Ys
Nowhere else are prices so out of line with incomes. Ottawa and Edmonton are 1/2 the price of Victoria, with higher incomes. Calgary has fallen from peak a lot in real terms already.
Victoria had a 50% runup from 2001 to 2005, the largest in the country. Vic and Vancouver, and to some extent Toronto, were already in bubble territory in 2005. The rest of the country wasn’t.
Asked a realtor about the legality of marketing a place as having more bedrooms than are legal. Their response:
“… legally it is not a bedroom but if it is disclosed that there is no window or closet, for example, it can be marketed as a bedroom.”
That’s stupid. I’d like to see that changed. Listings in Ottawa make extensive use of the +1 notation to indicate dens and offices. There must be a database schema difference for different regions. Which is also stupid. Is MLS not standardized across the nation?
)) Don’t expect to see the same interest rate response to an Ontario/BC crash.
If you’re worried about a house price crash in Canada, don’t expect it to be restricted to Ontario/BC. And you should be happy to know that it would be expected to less of a crash in Victoria. Teranet House price index for Canada in general is 215, and for Victoria is 204. That means the “bubble” in Victoria prices (measured from 2005 to now) is LESS than the national average for Canada’s biggest 11 cities.
Tells me debt levels in Victoria are strangling buyers based on real incomes and have peaked the market along with less Vancouverites and foreign buying. In mid 2000’s there were 40 year mortgages too. Again, the perfect storm.
The 2008 financial crisis was caused by the US real estate crash and its global impact due to financial engineering behind the previous bubble, and it required a global response. Don’t expect to see the same interest rate response to an Ontario/BC crash. The BoC has inflation targets it must meet – which don’t depend on RE prices – and the US would likely see a unilateral interest rate drop as currency manipulation.
Agree! 1974 Grandview is almost same size (both lot and house) and is on for $869k which is $166k below assessed. Not to say they are completely comparable but at first glance i dont see a $100k diff.
Hit it low and see what happens. 30 something DOM… they might be getting nervous. Neither have been sold in the last 3 years so are most likely sitting on some large equity gains… might be willing to get what they can especially with all the talk of things slowing down.
Whats the worst thay can say…. no? If you are in a position to wait then you have the advantage imo.
@ Leo S
Wow, really looks like SFH’s are following Van’s SFH’s pattern to a tee. Now we’ll just have to see what prices do in both markets…
It is interesting to see more homes come on the market which were rental’s only and airbnb. I have noticed a few in the past month or 2 that were purchased back in 2015/16, used for rentals and now being sold.
I guess people are trying to lock in their gains while they are still on the table 😉
9 MOI! Holy crap. I’d love to see that last graph with Victoria on it as well.
Also…
Go vote!!!
This will be an interesting one to watch. It’s still $86k over assessment and while clean it does need some upgrades as you mentioned. This is the case of the uninvolved seller (estate sale) so a low ball offer might be accepted. Why go $900k? Why not start much lower?
We’re already at that point, despite the fact that interest rates are still effectively negative.
Overly simplistic, and talking about distinctly different things. I suspect a substantial correction from people being unable to afford homes will not cause a financial crisis; the latter is more systemic.
No, and they similarly won’t act to “save” the housing market, either. In fact, Poloz takes particular effort to advise those getting in over their heads “how vulnerable they really are”. They’ve blown it up before, and they may well do so again.