Oct 21 Market Update
This post is 5 years old. The data and my views may have since evolved.
As I mentioned last week, the timing of thanksgiving always shifts around the sales volume which makes it tricky to compare weeks that aren’t like for like. Now that we are past that and had a pretty active week in the market last week, it it looks like sales will end up quite similar to last October.
So no big year over year increase like we’ve seen in the last few months, but also not likely to be a big drop. Given last October was a little stronger than the rest of 2018, that puts overall sales at close to average levels for October. With inventory up only 6% since then, market conditions are pretty similar.
Here are the weekly numbers courtesy of the VREB.
| October 2019 |
Oct
2018
|
||||
|---|---|---|---|---|---|
| Wk 1 | Wk 2 | Wk 3 | Wk 4 | ||
| Sales | 101 | 237 | 373 | 598 | |
| New Listings | 210 | 414 | 604 | 958 | |
| Active Listings | 2768 | 2756 | 2729 | 2510 | |
| Sales to New Listings | 48% | 57% | 62% | 62% | |
| Sales Projection | — | 514 | 598 | ||
| Months of Inventory | 4.2 | ||||
Remember to get out and vote!
Congrats local fool, guess James Soper is the only bear left….
Congrats Local Fool! Great place you got at a good price. 🙂
New post on garden suites: https://househuntvictoria.ca/2019/10/23/garden-suites/
Congrats LF!
I thought you’d be the last holdout of the regulars! It’s been a saga, eh?
Care to describe your new hood? Last I recall you were hunting up the peninsula.
Congrats LF! Sounds like a great outcome all-round and your patience paid off.
That’s great news and congrats on buying a house that you both love, especially with a positive house hunting/buying experience as you’ve described.
Well done. Good luck and enjoy the house! May it bring many years of happiness to you and your family.
We were represented. We knew who we were going to hire – he helped two of my friends sell their places and was a very competent guy. And indeed he is. The process would have been completely overwhelming without him. So, hats off to all you decent realtors.
We saw the place at 3pm, met the agent at 5, hired him, by 9pm the offer was in.
As I said there were a few signs they wanted out in a hurry, so our first offer was defensible but bordering on bad taste. We wanted to see if they would dignify it by countering and when they did, there were even more signs of distress seen in the counter. But, the price wasn’t where we wanted it, so we rejected it and walked.
Several days later, the listing agent contacted our rep asking if we would like to come see the place again. At that moment we figured absent another buyer, we had them. Of course another buyer could come, but we weren’t going to over pay (whatever the heck “over pay” even means in this market). Resubmitted a slightly improved offer, they re-countered, and presto. Meeting of terms.
It’s fun to think about now, but we didn’t enjoy it at the time. We’re not hagglers.
Our agent described our buying behavior as “anomalous”.
“Yes, most of my clients see at least 10 homes, they don’t hire me and just try to buy the first house we discuss that same night”.
Of course we didn’t really need him for that scoping part. We felt comfortable we knew what was out there, and we definitely knew exactly what we wanted.
did you use a realtor or did you made offer without one?
congrats
Congratulations, Local Fool.
Man, so many HHV bears have bought in the past year!
…has bought a house.
Hadn’t planned it, but one came up that was too perfect for us to pass up. Put in an offer the same evening we saw it.
Priced slightly under assessed, dragged them down further as an unskilled realtor inadvertently gave an air of vulnerability on the part of the seller. Might have commanded 100k to 120k more during the height of the market here. So, the value is quite a bit improved from then, and even relative to the market now, is still a good value. In absolute dollars of course, it’s a horrific amount of coin. Made me queasy. Mrs. Fool is practically in love though, and I’m not far off.
As I’ve mentioned before, I expect we’ll lose equity. I wouldn’t be surprised if our down-payment is nearly wiped over the next few years. But here’s my “rationalization”:
Had you bought any old place for X dollars and it dropped in value soon after, you might kick yourself because you can buy any old place, at any old time. But if you find the right place, if it drops in price, you don’t mind as you don’t believe that you’ll find another that fits your bill so well. Even if you do, who cares? It doesn’t make what you have, somehow worse than it was.
My thoughts on the market are completely unchanged. Don’t over-leverage, it’s not different this time, affordability has started a long trek of improvement, and this is absolutely required for the health and stability of our housing market and the wider economy. Anyone who works hard and plans well, deserves to afford their own place IMO. For those of you still saving, keep doing it. Affordability is coming, even if it feels like forever in the making. It won’t get there all at once, in a straight line, or overnight. Time will reward your patience, and at the same time don’t be afraid to act if you see something you like that you can afford.
Funny talking to the lender, unlike her colleague, she’s as big a bubble-head as I am. I asked her, “Are you allowed to tell me that?” Funny chat we had. But I enjoyed it.
For you homeowners, I might have some questions for you in the months ahead. 🙂
Sure, but it’s nearly everyone in Vancouver. There are some who are getting only what they paid in 2012 over there. Have yet to see that here.
Look like it worked out for the seller, and 676K is quite a decent price for a 101 year old house in that neighborhood.
It look quite nice for 3 bed, 3 bath, double garage for $524K to $538K that got heatpump, gas fireplace, gas range, and quartz counter ($205/mo strata fee).
The only drawback is island commute traffics at Leigh rd.
My point was Marko…………….you mentioned a few weeks ago that you didn’t know of any recent new builds putting in gas fireplaces.
We were talking about condos, not townhomes. Gas fireplaces are quite common in newer townhomes. It is a lot easier to install gas meters/vent outside in a townhome versus a condo building.
My point was Marko…………….you mentioned a few weeks ago that you didn’t know of any recent new builds putting in gas fireplaces.
Some people just want out, and for various reasons, I’ve found. I’m not sure most realtors would try to set their clients up for a bidding war right now, as that generally isn’t happening in the market AFAIK. I’m more inclined to guess just folks trying to get ahead of the market?
“I went to an open house at 43 Logan Avenue today.
Reported pending today at 77k over ask.”
Assessment value 650K so I guess it was prices 60K under assessed to hopefully get a bidding war.
It is definitely on my location list.. one day …
well that is democracy – not every one wins – but more will lose if you only cater the rich
Skytrain is way better than busing but Victoria is cheaper so instead of buying in the suburbs and skytraining downtown you can simply buy downtown Victoria for less than a suburb in Vancouver and then you don’t have to bus or skytrain.
Back to a discussion maybe a month or so ago? I noticed that there is a newly built row of townhomes (4 plex) for sale at 1235 Flint Ave. in Langford on south of Skirt Mountain. They all have natural gas fireplaces not electric. Very nice actually and a hop, skip and jump to the highway.
What is your point?
Not sure why you even need to go to Vancouver to pick out sales lower than previous purchase price?? Plenty of examples in Victoria. For example, home recently sold for $1,425,000 in Broadmead and previous 2016 purchase price was $1,503,000. Lots of examples but doesn’t mean the world is ending. During the frenzy of 2016/2017 some buyers simply overpaid.
I can see how the SkyTrain would make you more connected than most bus routes. With the SkyTrain you don’t have to look up a schedule before you go, since you know they go every few minutes. Most bus routes schedules vary throughout the day and will usually require you to plan ahead to figure out when the bus leaves. Also the SkyTrain won’t take a wrong turn and end up doing a 20+ minute detour which recently happened to me with a bus driver that was doing a new route and caused me to miss the ferry I was planning on catching.
As for amenities only being available downtown. Langford is getting better pubs and restaurants, there is movie theater, they have Pacific FC, for fitness and parks the Westshore has plenty of options. If you want to see a play or ballet you will probably still have to go downtown though.
Back to a discussion maybe a month or so ago? I noticed that there is a newly built row of townhomes (4 plex) for sale at 1235 Flint Ave. in Langford on south of Skirt Mountain. They all have natural gas fireplaces not electric. Very nice actually and a hop, skip and jump to the highway.
To show it’s not just the luxury class that’s hurting.
That person lost over 20% of the value of their house.
Likely way more in real money terms since they only owned the house for 2 years. If they put 20% down, they just lost it all and more.
Transit frequency is key. Many places in Vancouver you don’t even bother checking the bus schedule as you KNOW a bus will be there soon. Miss a bus in Victoria and you could be in for a long wait.
I went to an open house at 43 Logan Avenue today.
Reported pending today at 77k over ask.
Totally what i was replying to. Good one Gwac, layoff the peyote.
In the past I’ve portrayed the BC vacant homes spec tax as primarily a tax on foreigners (given the 4X foreigner higher rate). But at least I give credit to the BC govt in that it is restricted it to regions with a vacancy problem, and does charge something to residents of BC and ROC.
Now with the election, we have the Liberals promise to introduce a similar vacant homes tax. But this one makes no pretense of targeting people with vacant homes, it just goes straight to the cowardly approach to tax only non-voting “foreigners” with vacant homes, and doesn’t target areas that have a vacancy problem, as it targets everywhere in Canada.
When this federal tax was first introduced by Liberals in the campaign, it was dismissed by many here as “just marketing”, and that it wouldn’t happen.
Now we have this National Post article, with more info and adding that the NDP will likely be on board, and nowhere do they imply this is just “marketing”.
https://business.financialpost.com/news/election-2019/big-losers-in-canadian-election-could-be-foreign-real-estate-speculators
I can understand the arguments by some here in favour of the BC spec tax because it affects effect everyone and is targeted only to areas with low vacancy.
But is anyone here prepared to defend a yearly Canada-wide vacant (eg. vacation) homes tax that just targets foreigners, regardless of where in Canada (e.g. Gulf Islands or Prince Rupert) they might own a vacation home? If so, are you also in favour of Canadians in general being taxed on vacation homes wherever in Canada they are owned, and also in favour of other countries taxing Canadians on vacation properties they own. And are you also in favour of foreigners (or Canadians) who rent vacation homes anywhere in Canada being taxed too?
@guest_63977
You’re cherry picking specific homes. Prices are off a bit, yes, but you won’t find any deals in good areas of Vancouver. There is no ‘crash’ in the 2.5 million is another story.
Makes a good case for CCTV cameras on city streets, like they have in UK and elsewhere.
Hard to explain, growing up in Vancouver allows you to know the city and what has to offer, I can hop on train to go to many locations grab a drink at downtown, go to Lougheed mall for bowling, or head to Richmond for food , .. there,.. trains and buses are readily available to hop on. However, the bus in Victoria is not always there for you without taking excessive planning and waiting in-between transfers.
I guess it is the readily available transit that connects people. Feels connected regardless if I live Downtown, Surrey, Richmond, Burnaby or UBC
Everything you do is required to be downtown.. celebratory events , downtown, pubs, mostly downtown, daytime events, downtown , restaurants , downtown.. list go on as GC mentioned.. and everything is closed before nine other than a few things downtown
But my choice of activities differs from every one else.. so what I see in value might not be the same as yours
Did you have to pay deductable and depreciation difference on the tires vs. new? My tires are 2yrs old. ICBC telling me I have to cover both.
IMO if it was just me I can see being charged both, they’d want to prevent fraud ie: me slashing my own bald tires to get new ones. But when 30 of us make claims for the same thing isn’t it an attack, or some other level of vandalism where maybe the deductible is waived?
Happened to us too in Gordon Head last year. Bizarre behaviour
Got all 4 of my tires slashed Monday morning along with 30 of my neighbours. Will the slasher of Oakland’s bring down property prices in my hood? Way to go loser, a bunch of working, renting, single car families… what a target.
Tires slashed on my parents’ Scott Street block too….wtf. This should be 5 years jail plus pay for the cost of repairing all the tires but likely if they ever find the person it will be 2 hours community service.
Got all 4 of my tires slashed Monday morning along with 30 of my neighbours. Will the slasher of Oakland’s bring down property prices in my hood? Way to go loser, a bunch of working, renting, single car families… what a target.
https://beta.ctvnews.ca/local/vancouver-island/2019/10/21/1_4648197.html
As for the election, I’m glad the Liberals beat the Conservatives if only because the federal carbon tax must remain in place as a bare minimum measure to attempt to reduce the growth of emissions.
Downtown Victoria has lots to do, it really depends on what you enjoy doing with your spare time. There will always be demand for living in the downtown core, it just depends if someone can afford it.
The list can go on and on… although if someone prefers to sit at home, watch Netflix, surf the internet, or play video games that can be done from anywhere. Not that there is anything wrong with that.
Does anyone else remember when Local Fool and Hawk were positively jubilant at how poorly Polo Village was selling? It was surely an ominous portent, those two were insinuating, many months ago. Add it to the mega collection of wrong guesses by the bears…
It’s almost as if location matters more than the niceties of the house 🙂
It’s a sign of things to come! It is happening!!!!
5257 BELAIR CRESCENT, Tsawwassen
Wow the Victoria suburb of Tsawwassen is crashing. Watch out below Victoria…
September data now available.
Bunch of starts & not too many completions. Back up to 5,655 housing units under construction.
Must have been all those local regulation changes & the removal of the b20 and the reversal of the foreign buyers tax that did it.
5257 BELAIR CRESCENT, Tsawwassen
Bought 2016 $1,080,000
Just sold for $860,000
2018 Assessed: $1,141,600
2017 Assessed: $1,074,600
It really isn’t.
Herpa: I am curious why a bus ride that takes half the time of the sky train leaves you feeling more disconnected than the sky train.
I am also wondering if you might be kind enough to give some examples of all the downtown activities in Victoria that you refer to as well. Personally I dont go downtown hardly ever but I am wondering what I might be missing out on.
this is a subjective opinion, i consider a good location if you can have access to most stuff without using a car
in vancouver, the sky train makes me feel connected to the city even if the ride is 40 mins long.. here a 15 min bus ride makes me feel disconnected from victoria downtown .. many of the activities are downtown in victoria .. but there are bunch of things all over the place in vancouver and i dont need to go downtown vancouver to enjoy the city
ooops .. i made a big blunder here .. didnt realize i grabbed one of the old listing from the website- ignore that one
i didnt say brentwood mall was close to downtown nor 450k is cheap . .but victoria is asking for that price too
but what you remembered brentwood mall was like a decade ago.. it is totally different today – if you drive by there now . .you will definitely be surprised
As someone who lived next to Brentwood Mall for a year 450k for a one bed is still a ton of $$$$. I wouldn’t call that a prime location nor is it that close to downtown Van.
if you wnat to look at recent changes .. you can use this link.. it shows a lot of price increases 3 years ago, now it show lots of price deductions
https://myrealtycheck.ca
my sister just bought a one bedroom 650 sqf unit 15 year old concrete unit near brentwood mall station. 450k, another one was sold @ 399800
https://www.jannelledelatorre.ca/listings/view/98932/burnaby-north/brentwood-park/705-4118-dawson-street
another one at 469k on 7th ave , another one… not sure what you are talking about .. the low end is definitly coming down too .. 3 years ago , units like that will have line ups, now one offer every two weeks if lucky
but if you are talking about vancouver downtown area ..well you are absolutely right .. but i considered vancouver core as a 30 km diameter area where as victoria core is a 10 km diameter area..
Re: Vancouver: I encourage you to actually look at the data. Honestly, the condo market <$1 million hasn’t budged much in pricing. It’s the luxury detached that’s hurting. If you’re looking for a starter home in Van, you’re still massively outta luck…no significant price drops. Anyone with contrary data, let me know!
Little significance in sale prices under ask. Look at sales vs assessment, then tell us how it compares to what happened in Vancouver.
That’s pretty well how it started for Vancouver last fall no?
re: the election, IMO, it was the best tasting shit sandwich we could make. Trudeau has disappointed in many ways – abandoning electoral reform (or at least seeing if it could be done), and then SNC Lavalin showed he’s just another backroom politician. But, when compared to the alternative of Scheer and Conservatives, I’ll gladly take a Liberal minority that has to work with other parties. In fact, I personally believe every government should be a minority. There may be some disadvantages but forcing politicians to work with others is by far of higher importance and greater public good.
There’s never any real qualification given to “rich”. Is “rich” someone who earns more than $100k/year? $250K/year? I’d argue not. I’d argue a household of 2 Doctors, 2 Lawyers, really any professionals that have gone to get higher education shouldn’t be considered “rich”, which would put my arbitrary limit at say $500k per household. That to me is upper middle class. These are individuals who busted their butts to get where they are and deserve financial benefits associated to it. Now, when we start talking billionaires then “tax the rich” becomes less communist sounding and just simply more equitable. Billionaires shouldn’t exist IMO, just as destitute poor shouldn’t exist. Where the line is drawn with millionaires is an exercise for the reader.
Lots of sales coming in these days with most of them a few tens of thousands under ask. People are wanting to get their places sold before winter.
Yes, Lib. minority is best outcome, something for everyone.
Best concession speech was first part of Jagmeet’s speech where he talked about helping people with huge prescription drug payments… that’s where the NDP social policies of helping the poor stand out, and I could see myself voting for them. But it then deteriorated into a pledge to “tax the rich” which became a “tax the rich” crowd chant and the “other “ side of the NDP comes to life.
The existing home buyer program is a good deal for those who want it and qualify.
There’s a calculator showing how much money you’d save using the (regular, existing) home buyer incentive. Using any house appreciation less than 5% per year, you make money. If housing prices fall you make bigger money on that portion (because you owe less to the govt). This is heavily skewed in the home buyers favour, and increases the amount of house you can buy by $80k. What other investment can you make that makes you money unless house prices rise by more than 5% per year? (In which case you have really made out well because you own a full house).
https://mortgauge.ca/tools/firsttime-homebuyer-incentive-benefit-calculator
There are people here who’s big obstacle to buying is that they don’t qualify for as much house as they need, and qualifying for $80k more would make a big difference to them.
i am going to be a first time home buyer and i find it dumb .. more like sellers subsidies insensitive – kicking the can further down the road
Touché. I think it’s an odd and generally bad public policy. I really hope B20 isn’t watered down, though.
Lib minority.. good result from my perspective.
Let’s hope they drop the nonsense about their increased first time home buyer incentive
That’s the whole other side of the equation that I didn’t talk about. I only looked at permanent residents because they are the ones likely to buy. Then there are the temporary residents (work and student visas mostly) that have increased a lot in recent years. The pressure from that is almost 100% on the rental market (especially after the foreign buyers tax). This is also where the biggest change is.
Here’s an article on that from a couple years ago. https://vancouversun.com/opinion/columnists/douglas-todd-surging-temporary-foreign-resident-numbers-tighten-vancouvers-rental-squeeze
Credit Suisse 2019 wealth study.
Oh Canada! Wealth per adult in Canada grew at an average rate of 5.2% over 2000–19 in US dollars, which exceeds the 4.0% rate seen in the United States.
**Average adult in Canada has net worth of $393k CAD ($295k USD) wealth ** composed of
– $252k CAD ($190k USD) financial assets (non-Real estate)
– $220k CAD ($170k USD) RealEstate,
– and -$80k CAD (-$60k USD ) Debt. Average debt is a “non-scary” 20% of net worth
If we assume that most of the debt is mortgages, that makes 60% of net worth non Real Estate. Medians are lower ($142k CAD net worth per median 18 and over age adult), and are listed in the article. Canada (as usual) compares favorably with other G7 countries.
Page 58 – https://www.credit-suisse.com/media/assets/corporate/docs/about-us/research/publications/global-wealth-report-2019-en.pdf
“Wealth per adult in Canada, at 393k CAD (USD 294k) , is 32% lower than that in the United States, but 5% above the G7 average. Wealth inequality is about average. At 73%, the Gini coefficient matches the mean across countries globally. Canada has 20% of adults with wealth less than USD 10,000, compared with the world figure of 58%, and 52% have wealth above USD 100,000. The country has 1.3 million millionaires and accounts for 3% of the top 1% of global wealth holders, despite having only 0.6% of the world’s adults.“
I forgot to add: Newcomers who aren’t buying are presumably renting instead (except those living with family who immigrated first). Under 10-year-olds don’t rent. So I’d be interested to see how increased immigration impacts the rental market.
Canada’s population may be rising by 1% per year, but the population of millennials (age 25-39) is rising by 2% per year.
The 312K immigrants to Canada in 2018 rose the population by 312k/36.96m =0.8%.
Given that 156k of the immigrants were millennial (age 25-39), and pop of that 25-39 age group in Canada is 7.2m (20.6%) of total, that means the population of 25-39 age (millennials) went up 156k/7.2m = 2.1% in 2018 (minus small # of deaths or emigrees in that age range). That should continue to happen each year, providing a much bigger boost (ie 2% or double) to first time house buying that the overall 1% population increase.
source: Immigrants by age. https://www.statista.com/statistics/443305/international-migrants-in-canada-2014/
This analysis is missing a key element alluded to by Patrick.
Replacing a newborn with a twenty-something pulls demand ahead by decades, distorting the market. Put another way, the ownership rate of under 10-year-olds is drastically less than the 32% rate of newcomers. Changing the composition of growth cannot be ignored.
(And because immigrants favour Vancouver over Victoria, I’d want to see more analysis on how immigration contributed to Vancouver’s rising prices, which then spilled over to Victoria.)
This reminds me of the “double cohort” effect that Ontario experienced when Grade 13 was eliminated. In that year both Grade 12 and Grade 13 students had to compete for admission (and the universities did not double admission that year). It caused a ripple that was felt for years, as students delayed graduation to avoid the double cohort year, while others tried to graduate early.
https://en.wikipedia.org/wiki/Ontario_Academic_Credit#Double_cohorts