January Market Summary
January is done, and it’s a month much like the previous ones, with solid sales gains over the year ago month (+25%) as we’ve seen now since the end of last summer. Seasonally adjusted sales actually dipped a bit overall from December, with single family roughly flat and condo sales giving up much of their recent gains. However given the signs of increased activity in the condo market with busy showings, I suspect this is temporary and condo sales will likely increase into the spring. It’s still on the single family side where sales have recovered more from the stress test induced dip.
Note that I’m in the process of switching some of my more complicated workflows from Excel to R, so the seasonally adjusted data is now using a more robust algorithm (Census Bureau X-13) and there may be some small differences to previous seasonally adjusted data.
Looking at the broader picture of pricing, the positive trend continues for detached properties. The detached median is actually up by $83k from last January, but that’s largely noise (watch for the headlines touting that though). Looking at the repeat sale indices prices are up about 1.5%.
However the chart above is a 12 month average, it tends to flatten sharper changes in the market. For that we want to look at just January data, where it shows the major change was in single family inventory, which dropped back after a large jump in 2018. Condo months of inventory increased a bit over last year, but again I suspect this is temporary and will likely follow single family down in coming months.
What’s concerning is the steeping drop in inventory levels. After a nice 2 year buildup from the catastrophically low levels of 2017 (which led to all sorts of irrational market behaviour), seasonally adjusted inventory has been dropping since mid last year and the drop in recent months has been quite steep. With only a middling level of new listings coming online set against substantially increased sales, it doesn’t look all that promising for a turnaround at the moment.
I’ve said recently that you should expect rising prices with these market conditions. The only market segment that could be still described as weak is the high end, where conditions continued to weaken year over year in Q4 2019. Similarly to Vancouver, the market is strongly bifurcated, with strong activity in the lower price ranges where locals can buy, and sluggish sales in the high end that was mostly driven by out of town buyers. What’s not clear yet is how far this market surge will go. Is it a temporary strengthening (say 6-9 months) or will we rocket all the way back to insanity market first? The market runup was cut short by the stress test which ads uncertainty to the picture. Instead of buyers being tapped out naturally, they were restricted by regulations, and it seems that many have figured out a way to buy despite that restriction. Somehow it feels a little like the market in 2009 for those that were around then.
First time buyers increase, investors remain subdued
In other news, based on data from the VREB REALTOR Market Survey, buyers of second homes have come back to more normal levels. After a substantial increase during the price runup that was driven mostly by an increase in investors, second home buyers are back to about 15% of all buyers, compared to a high of 22% in 2017.
First time buyers were up to 23.2% of all buyers in 2019, from 20.9% the year before (10 year average is 21.6%). It makes sense that especially first time buyers were sidelined by the stress test, and some of them came back last year.
New post: https://househuntvictoria.ca/2020/02/10/the-rent-ratio-as-an-indicator-for-condo-investments/
Available data doesn’t support this statement. Average US house size (square feet per person in household) has DOUBLED over the last 40 years. For example, most young uber-rich celebs live in huge homes, as watched by young people on shows like Cribs (MTV, Snapchat Discover, still going in 19th season). Obviously some people prefer smaller homes. But for others, , you may be confusing “don’t want a big home” with “can’t afford a big home”.
https://thefioneers.com/average-home-size/
“the average home size is a lot larger than it used to be. In fact, the square feet for the average US single family home has grown significantly over the past 40 years. According to the US Census Bureau (including an older historical chart and a more recent report showing 2015 numbers), from 1975-2015 the average home size increased 63% and over 1,000 square feet, increasing from 1645 SF to 2687 SF. What’s also remarkable, is that during this same period, according to Statistica the average household size (i.e. number of individuals) has decreased 14% from 2.94 to 2.54.With the increase in square feet and a decrease in the household size, this means that the average square feet per person have almost doubled (560 to 1068 SF/person) from 1975 to 2015.”
LeoS: My original point is that the type, sie and quality of home they are building in Oak Bay would be considered a “typical” upper middle class home. We probably agree that the price tag for it is extremely high.
Income of $201k USD is enough to get into the 1% in Canada.
https://economictimes.indiatimes.com/news/international/business/this-is-what-it-takes-to-be-in-the-1-around-the-world/articleshow/74015250.cms?from=mdr
Sure, no argument there. But we’re talking about new builds. And to buy a new build in Oak Bay you have to be in the top few percent (whether that is due to income, or due to some lucky/smart RE investments in Vancouver/Toronto).
LeoS: Sometimes it helps to understand a perspective outside Victoria’s small pond. In Toronto alone there are over ten thousand people with a net worth over 10 million NOT including their principal residence. How many thousands are there in Vancouver with a house worth over 2 Million. Many of the Oak Bay purchases are upper middle class retirees from other parts of Canada and not necessarily local, Finally I did not suggest that all or even a majority of Oak Bay new builds are over 2 million just that some listings are starting to show at that price point.
But let me toss the ball back into your court; exactly who do you think is buying the new builds in Oak Bay, regardless of their price point. Arr you suggesting that there has been this flood of uber rich that have moved into little Victoria?
I’ve said it before but I don’t know too many people who would ever want to live in a 8000 sq four house, that’s the older generations ideal, trend is away from large homes, just look at tiny house trend, which is obviously swinging too far in the other direction but like fashion it’s making a statement. Actually most new builds in Vic and Oak Bay don’t have basements, are on smaller lots, over priced for what you get, if I see another house with every wall and kitchen completely white I will be sick. I believe new builds are generally over priced by 10 to 20 percent even including GST over resales if similar resale house
You just said new builds are asking $2M in a lot of cases. I know that the term middle class is flexible, but a $2M is not for the upper middle class. Sales over $2M account for about 1.5% of sales. Not quite into the 1% but close.
Underachiever: Try at least to live up to your name.
I fixed it for you.
LeoS: I know that real estate agents suffer from language creep (like calling almost everything luxury) but honestly most of the new builds are well under 4000 sq foot and that is nowhere close to qualifying as a mansion (particularly since often a lot of the square footage is in the basement). While “mansions” are not specifically defined the minimum seems to be at least 8000 sq feet and a minimum of six bedrooms with full en suites. While the Uplands has seen a handful of Mansions built that is generally not what is being built in Oak Bay,
At the time they were built most of the homes in Oak Bay were small houses built for blue collar workers, These are being replaced with fairly typical upper middle class houses.
I enjoyed the interview with Vancouvers city planner on that topic https://www.vancouverrealestatepodcast.com/investing-in-a-city-wide-plan-with-vancouvers-chief-planner-gil-kelley/
He talks about how when You step back and ask people what they really want in a neighbourhood it turns out that it is more about the design of new buildings and not so much about preserving single family only. People hear density and they think towers but that is not the plan for most areas. Given the choice many people would rather have well-designed gentle density like townhomes and low risers rather than poorly designed oversized modern mansions that don’t fit into the neighbourhood.
Well, land at near a mil, then $300 a square construction and you’re there.
I was thinking the other day about Oak Bay. The opposition to density is leading directly to the ultramodern new builds that no one seems to like either. When you can’t build density for normal families what you are left is housing for the rich. And most aren’t interested in living in an old oak bay house so they will tear down and build a mansion in its place.
I am sort of surprised that new builds in Oak Bay are asking two million or more in a lot of cases. Throw in GST and land transfer it strikes me as really overpriced. Has anyone looked at these properties?
I think it’s important to understand that what were seeing isn’t just here or Vancouver. It’s happening in other markets as well.
IMO, the simplest (more like simplistic) and quickest answer to “WTF is going on” is this:
You’ll note the uptick on the far right. As the US Fed begins re-expanding its balance sheet yet again, that perpetuates the encouragement of investment money going further out onto the risk curve and into hard assets. RE is one of those assets, and this effect could be especially acute in markets that are the recipients, or near the recipients, of global capital.
It was one of the things I considered before buying myself: the risk seems rather high, and at the same time central banks are showing no intention of backing off of their expansionary policies. In the meantime, life goes on. I do not believe we will get to a point where we will be a “nation of renters”, as this kind of rhetoric shows up every time. By the same accord what we are seeing is not only a more interconnected global economic cycle, but a sustained and systemic manipulation of it by central banks.
Now this in turn elicits broader conversations to be had about CB monetary policy and historical debt supercycles, but for now, unaffordable housing in certain markets may be challenging to mitigate as long as liquidity keeps flooding these markets.
So does that mean risk on? It’s so hard to say. Some people are freaking out about condos and insurance costs. Will that break the market, or will it be nothing at all? Just how much debt can an economy and/or a household absorb?
If you buy, buy what you can afford and don’t do it on the basis of expecting capital gains. Pretty sure that ship has sailed for now, and if it hasn’t, we’ve got bigger problems.
Now that I’ve said all this, watch everything somehow go to hell next week and fall 40%…haha.
With these market conditions almost certainly. Question is how much. Last runup with similar market conditions prices were still rising into the double digits. It’s a little different in that high end is weak most people aren’t buying there so it’s less relevant
Magnitude of the stress test impact made the whole thing very volatile and I didn’t expect demand to come back this strong this fast. But market balance is tilted towards sellers and that means price increases essentially inevitable until they change.
https://m.youtube.com/watch?v=Lr_3ATOF8Fg
Looks like Vancouver is really heating up in the condo and entry level detached.
I’m genuinely curious what the bears make of this rebound? Are we going to see another price surge of our own?
Saretsky describes examples of 1 bed condos with multiple offers, with one going 100k over-ask (500 >> 600 in a 40 yr old building!) and another setting a new record for the building @ $700k.
Common theme….desirable places, all over the world, are expensive for the most part.
About Malibu: median house property value 1.8m, 68% of the houses worth over 1m! Oh… it is USD, not CAD peso! Median household income $117,000. The cost of living is triple of the national average…. The sun is out. Victoria is my paradise 🙂
@Patrick I know something about Malibu now hehe
https://www.timescolonist.com/opinion/letters/letters-feb-7-crd-land-buying-fund-dallas-road-van-campers-getting-rid-of-rats-1.24070650
True, but all it takes is a couple of sunny days for Victorians to forgive and forget. Looks like that is forecast starting tomorrow. Remember, this is early February – Winnipeg is minus 20 right now, Vic is +7.
I would never move to the U.S. or any other country, so only intra-Canadian comparisons matter to me. And Victoria is tops in my book when it comes to climate/weather.
Yeah, water shortages are only going to increase in California and Arizona – some towns reliant on aquifers like Borrego Springs have already seen property values decline as a result. Locally, basement flooding can be a huge pita. And insurance is generally capped for this type of damage with a large deductible. Some homes in Oak Bay and Victoria are facing well over 50k in damages. Part of the waterfront bank off Maquinna just collapsed as a result of the rains leaving at least one home in a precarious position.
I would much rather put up with rain than live in place that has water shortages and droughts.
California and Arizona don’t seem to be sustainable in their current water usage. I would be hesitant to invest in property that may become worthless in the future because it is in an area with no or little rain.
Marko said: “We had two hours of sun since the New Year, yet sales are up 25% YOY and inventory is dropping from already low level. What it is store when the sun comes out and buyers are in full force?”
Got it! So weather didn’t matter to buyers then but it will when the sun comes out. I’m glad its so simple, and there aren’t factors involved. Who needs Leo S charts, recent sales numbers, and -yes- even “view from 10,000 feet” assessed values, when we have the Chek TV weather forecast? 😉
I have trouble with the idea that locals seriously intent to buy a house put it off because the weather outside is crummy this week. (However, it makes sense to see fewer lookie-lous that live around the neighbourhood at open houses, when the weather is crummy).
As I said in my previous post, I think three winter months of almost no sunshine does not effect immediate sales, but it sure isn’t going to make a good impression on people visiting here in that interim, and considering to move/ retire here later on.
You know how it goes. Rain keeps people trapped in open houses and eventually they feel so awkward they make an offer just to save face.
You must have heard the old saying: If you have to ask…
Trekker: Dont really follow house prices here; try Zillow. Waterfront is impossible but some of the prices around Kanan Dume Road used to be half reasonable. Mind you Victoria used to be half reasonable and I guess you have to take into account the Canadian peso.
You make a good point. We had two hours of sun since the New Year, yet sales are up 25% YOY and inventory is dropping from already low level. What it is store when the sun comes out and buyers are in full force?
@Barrister now I am curious at Malibu. How about house prices and cost of living there?
Introvert: Malibu bright sunshine hours 3254.
You wouldn’t think it these days, but:
https://www.currentresults.com/Weather-Extremes/Canada/sunniest-cities.php
Grant said: “I’ll still choose our past stretch of cloud cover, rain and even snow we’ve had over Calgary’s winter”
It doesn’t have to be a choice between only the two options of no sunshine or deep freeze all winter – which Totoro demonstrates. Or, for bargain prices compared to Victoria real estate there are options for purchasing in Arizona, Florida,etc. I had always pictured that as a seniors thing until years ago a friend of mine bought a sunny getaway place in Florida for his young family – for both winter and summer use (let’s be honest, summers in Victoria don’t get all that warm).
Somebody I know has had to leave Victoria every year during the winter months because of Seasonal Affective Disorder (SAD). Even artificial sunlight doesn’t do the trick there. For people like him, a sunny place makes all the difference even if it’s cold.
January 2020 Labour Force Stats Can data ….
https://www.ctvnews.ca/business/canada-adds-34-500-jobs-in-january-unemployment-dips-to-5-5-per-cent-1.4801408
https://www150.statcan.gc.ca/n1/daily-quotidien/200207/t007a-eng.htm
Strangely the weather down here in Malibu has been less rainy. Like it or not one really has to have the perimeter drains scoped and cleaned out every fall.
Every day of the week and twice on Saturday I’ll still choose our past stretch of cloud cover, rain and even snow we’ve had over Calgary’s winter. For nearly 2 weeks straight in January Calgary didn’t get above -20 and had lows in the -30s, not including wind chill! Needless to say it wasn’t balmy the rest of the time either.
It’s supposed to be sunny here this weekend and ~+8C. We’ll be out enjoying the lush green hiking and biking trails. The waterfalls are also pretty spectacular out in Goldstream, Sooke, Malahat etc.
https://bc.ctvnews.ca/warning-of-collapse-in-b-c-condo-market-1.4800633
Black swan anyone?
Thailand has been sunny every day for a month and 28-30 degrees, but we are running out of sunscreen so probably time to head back. I see that many of our neighbours were flooded while we were gone. We had our perimeter drains cleaned to the street before we left so were lucky. I know part of it is the aging infrastructure, but a lot of the problem is tree roots from trees planted by the municipality. I don’t understand why planting trees on boulevards that grow huge with invasive root systems is something that continues. And then the homeowner is held responsible for removing the roots and all the damage from a flood that results when they don’t.
totoro: I hope you’re enjoying some sunshine in Thailand, because Victoria continues to see almost no sunshine.
I feel bad for anybody who has moved/retired to Victoria last year, expecting that winter in “Canada’s Florida” might have even a bit of sunlight. If you Victoria-ites get the feeling that the lack of sunshine in Victoria has been particularly bad for the last several months, you’re right. And if you’re reading this from outside Victoria, there’s cloud cover data to confirm.
Here’s Victoria’s cloud-cover data for the last 8 weeks. in units of “oktas”, which correspond to how many eighths of the sky are covered in cloud, ranging from 0 oktas (completely clear sky) through to 8 (fully covered). Almost complete cloud coverage in Victoria starting from the end of November. Bleh!
https://victoria.weatherstats.ca/charts/cloud_cover_8-weekly.html
Looking at the bigger monthly picture, this past December had the most cloud cover (7.5 oktas) than any other month in any other year as far back as the site seems to go (which is 2013). Click “10x” on “Amount of Data to Show”, here: https://victoria.weatherstats.ca/charts/cloud_cover_8-monthly.html
Similarly, last month with 7.2 oktas was the second-worst month for cloud cover for any month and year as far back as the site’s data seems to go.
Comparing this month (so far) to all other Februarys for which they have data, only February 2016 has been worse.
I wonder if Victoria has been setting any records throughout this winter. It probably makes no difference to already sluggish winter sales,. but such a long time without sunshine isn’t going to convince anybody that has been visiting during that time to come back and buy/retire out here.
The royals, who apparently visited in late December before moving (?), sure chose a bad time to move out here and see no Victoria sunshine.
This is a great site for coronavirus data tracking https://gisanddata.maps.arcgis.com/apps/opsdashboard/index.html#/bda7594740fd40299423467b48e9ecf6
Yes, wash your hands and don’t touch your face in public places, but if you are going on a flight at a time of increased risk is going to be a good thing as a) you will benefit from fellow masked passengers in reducing transmission rates and vice versa and b) there are also scientific studies to support wearing one to significantly reduce the rate of contraction when in confined close quarters (by 67%) and scientific studies showing your risk of contracting illness on a plane seated within two rows of a contagious person is much higher. Some planes that were in the air in Asia during the 2003 SARS outbreak found that as much as 40% of the cabin was at risk of becoming infected. I’m okay to err on the side of caution in this case.
https://www.medpagetoday.com/infectiousdisease/infectioncontrol/16278
https://www.businessinsider.com/getting-sick-on-an-airplane-flight-2018-3
We ordered some through a local pharmacy in Victoria.
According to the New York Times the mortality rate for those infected in Wuhan is 4.1 per cent. The number of infected has doubled in four days. Spanish flu was 10% so not as bad but still a major bad.
And income from a GIC or stock divided by actual hours of work performed is… infinite! See what’s wrong with your reasoning?
Legally? Are we talking Panama here?
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Because of the dividend tax credit you can earn around $50,000 each from Canadian dividend paying companies and pay no tax, as opposed to rental income which is taxed at your marginal rate which is most likely 30-50%, so again paying down your mortgage is a bad idea if you have rental income as you now lose the interest tax deduction and pay more tax.
On a specific property in determining actual market value, no.
Sure you can pick up a bunch of random stuff like maybe the owner challenged the assessment one year, maybe the owner did work with permits that BC assessments reviewed and increase the assessment, etc. I use BC Assessments information for various cross references such as year built, the square footage they have on file (wrong all the time), etc., but I certainly don’t pay attention to the assessed number.
I talk to BC assessments a couple of times a year. They phone me questioning a transaction or I phone them to challenge something. I phoned them two weeks to challenge improvement value on a couple of our building lots and the person the phone obviously didn’t know the difference between a footing and a foundation wall…..and these people are coming up with these numbers. (I was arguing that improvements can’t be xxx,xxx when only the footings were poured at the cut off date).
Then I look at all the condos I own and they obviously have no clue which have parking and which don’t, for example, but that factor alone moves actual market value $40,000 or more than 10%.
BC Assessments are useful for taxation purposes and reading the general directional of the market, but using it in any specific property I just don’t get it that is why I am asking you for an example of how it helps you?
For example, two houses are prices at $1 million and one is assessed at $900k and the other at $1.1 million. What does that tell you? Nothing useful in my opinion as the $900k assessed home might be a way better value.
Legally? Are we talking Panama here?
Grant : The normal mortality rate for seasonal flu (the one that comes around most years) is less than 1%.
It’s interesting because typically masks are worn to stop an ill patient from spreading what they have, NOT for well patients to stop catching something. Several scientific studies have been done on the efficacy of PPMs (personal protective measures) and only proper hand hygiene was effective. In fact, some argue that if you don’t practice good hand hygiene and wear a mask you may be increasing your risks, because as you touch and adjust masks you’ll increase the chances of exposing your mouth and nose to any viruses that were on your hands.
Even if they aren’t effective, I suppose if you’re in an airport with a bunch of people wearing masks you may feel more comfortable wearing one as well. Also, when transmission is via airborne droplets, distance from infected people is important. When on a plane everyone is pretty crunched together so the mask may be better in this situation.
Also, as a PSA:
It’s early but Coronavirus is expected to have an R0 (basic reproduction number) of ~2.5-3.0, with a mortality rate of ~2-3%.
By comparison seasonal influenza ranges of an R0 are 0.9-2.1 with a mortality rate of ~2% (note 67% of these are for people older than 65)
An R0 of 1 means 1 person will generally infect 1 other. Values below 1 mean the virus isn’t likely to spread far. The higher the R0, the more virulent. (Measles is R0 of 12-18)
So coronavirus has a higher spread rate and slightly higher mortality rate than the typical seasonal flu.
Sources:
https://www.sciencedirect.com/science/article/pii/S1755436516300858?via%3Dihub
https://www.ncbi.nlm.nih.gov/pubmed/19545404
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6815659/
https://en.wikipedia.org/wiki/Basic_reproduction_number
Sorry Leo for the off topic post.
Rental income divided by actual hours of work performed = a $/hr rate astronomically higher than any normal job.
It’s the closest thing to a money-printing machine that regular folks (like me) will ever discover.
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Funny, I would say the same thing about the stock market, with another hot start to the year brings total gains close to 25% in past 13 months, and I can also access that money within a couple of days.
I still stand by my recommendation for those with solid house hold income and stable professions that the best thing to do to increase your wealth in the long run is to delay paying off your mortgage at these low interest rates and invest the funds you would use to pay down your mortgage, use leverage and watch your net worth multiply. Why pay down a mortgage at 2-3%, your going to get the house growth whether you pay down or not. If you can get to a place in your 50’s where you’ve been able to build up a nest egg of 1MM+ , you can bring in more money then you ever dreamed of and guess what you can earn $100,000 per couple of dividend income and pay NO tax , beats the heck out of giving up half your house for net $800 month.
“Renting out part of one’s primary residence isn’t for everyone. But it’s worked out really well for us.”
Yeah, I go back and forth on whether I think it would be worth being a landlord to keep expenses down. My biggest problem with it is that a lot of basement suites in the core are pieces of garbage, particularly when it comes to noise transfer and privacy. Hardwood floors on the upper, central heating connecting the upper and lower, no insulation between floors, drywall screwed directly into the joists, no separate entry, shared laundry etc. That kind of shit sucks for you and your tenant.
I feel like it would take a fair amount of work and money to make a typical core SFD suitable for multifamily living.
Rental income divided by actual hours of work performed = a $/hr rate astronomically higher than any normal job.
It’s the closest thing to a money-printing machine that regular folks (like me) will ever discover.
Renting out part of one’s primary residence isn’t for everyone. But it’s worked out really well for us.
Yup, it’s super low stress and easy money provided you have the right tenant.
As for getting ahead quickly, we’re on track to be mortgage-free in our early forties, which we feel pretty good about.
Totoro: Lots of luck finding any masks in Victoria. You should buy hand sanitizer and surgical gloves as well.
Safe trip home.
Approximately Government St and Broughton, looking south. 1880. No, the foreground building on the right is not Bard and Banker, as this picture pre-dates it by 5 years. You can easily see this vantage point on Google maps due to the distinct topography (the road dipping in the background).
Totally an old west, frontier-feel!
Vancouver market getting crazy again for anything at the bottom end
“ My clients have been outbid on five properties in the last two weeks. All of them had 10 offers or more.
Happy house hunting! #VanRE”
https://twitter.com/stevesaretsky/status/1225262079596040197?s=21
We’re in Thailand right now. Lots of economic impact here from trip cancellations by Chinese tourists and coronavirus cases are on the rise. Most people are wearing masks in airports and other transit – us included. Hard to find face masks and hand sanitizer in the pharmacies at this point. We pass through Seoul on our way back and there are mask shortages there already and masks that are available are selling for 15x the normal price. I’d recommend having some on hand just in case, the N94 masks in particular. It may end up being overkill, but if it doesn’t there are likely to be shortages in Canada too.
Sort of agree. People have different personalities and abilities, early experiences, and life chances that often make them more or less likely to maximize opportunities short-term for long-term results. You only need so much money in life before you have enough to live a modestly comfortable life, but getting to enough is quite the climb for many, especially in the beginning, and those that are not willing to shoulder short-term discomfort for long-term results may never get there.
He is very touchy to any criticism on his blog.
His investment advice has been OK. Pretty standard stuff. Diversified portfolio….yada yada. A few notable glitches like replacing bonds with preferred shares for the fixed income portion. Just before preferreds cratered.
Makes no sense to compare TOTAL index returns to only the capital appreciation on a home. The home is also “paying” you with a continuous stream of tax free accommodation. VS renters who generally pay rent with after tax income.
The global death toll from coronavirus is now almost equal to 4 hours worth of global traffic deaths
Marko said:
“.. Would gladly have strangers under the same roof and work less as a result, or get ahead quicker.
.. Rental income is so easy that I”
None of that matters if, as Kenny G wisely says, you are not willing to live with strangers in your house – if in fact the house is set up to make that easy. (And if it is, you may have paid a chunk extra for that rental suite potential to begin with) . I assure you a lot of people are not into that, and just want to enjoy life in their house with just their family.
Some people, aside from having a rental suite, also consistently have one or even two exchange students living right with the family (in an extreme case I know of, it was five students at once, for years). Easy, peasy (esp. if you get them to cook their own food) more money squeezed from your home, right? Those owners might even say you’re foolish if you’re not doing the same and maximizing every dollar you can get from your home, in any way. But that’s just silly. People have different tolerances for what they’ll do for money, and what makes them happy even if they’re not squeezing out every last potential dollar.
Marko said:
“Just curious, can you give me an example of how an assessment on a specific property from 2016/2017/2018 can help guide you in your decision making?”
Before I answer, tell me first, can you really not think of any examples of how previous years of assessment data can be useful information?
Or, can you think of reasons, but you don’t think somebody that isn’t a realtor can? Just curious.
Marko said:
“Just curious, can you give me an example of how an assessment on a specific property from 2016/2017/2018 can help guide you in your decision making?”
Before I answer, tell me first, can you really not think of any examples of how previous years of assessment data can be useful information?
Or, can you think of reasons, but you don’t think somebody that isn’t a realtor can? Just curious. 😉
Introvert – But Local Fool is right in that coronavirus isn’t particularly deadly compared to SARS…
According to this expert, it’s far too early to say that. According to him all signs are pointing towards it being much worse than SARS. Great interview here on Macrovoices. Skip to 40 minutes (or listen to Julien Brigden talk about central bank liquidity first if you’re interested)
https://www.podbean.com/media/share/pb-wfimm-d1bcc1?utm_campaign=w_share_ep&utm_medium=dlink&utm_source=w_share
Just curious, can you give me an example of how an assessment on a specific property from 2016/2017/2018 can help guide you in your decision making?
I’ve done well in the markets, but the actual gains/profits pale in comparison to real estate. I wouldn’t say the percentage gains are larger in real estate but you can leverage 5X no problem even on investment properties. On the other hand, wouldn’t touch a margin account in the markets with a 10 foot pole.
Having done different types of work in my life from physical construction work to health care to flipping paper on my desk nothing is as easy as rental income. Would gladly have strangers under the same roof and work less as a result, or get ahead quicker.
Rental income is so easy that I’ve seen it make people dumb/unmotivated, primarily in Dalmatia where I have family that rent out their places out for three months in the summer and live off that for the rest of the year.
In my case, you also gotta account for suite income, which would be somewhere around $150K over the past 10 years.
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You also gave up in some cases half your house and had to live with strangers under the same roof, these are trade offs I’m not willing to make
You mean ted’s first link.
In my case, you also gotta account for suite income, which would be somewhere around $150K over the past 10 years. That amount makes a new roof ($7K is the quote for mine) look like chump change. There’s also the partial tax deduction on mortgage interest, property tax, utilities, etc. I’m probably forgetting some other stuff.
As for the stock market, I don’t invest in it, so it’s not a comparison that sways my personal decision-making.
Wasn’t Garth peddling certain stocks that he had a personal stake in? Maybe somebody here remembers.
Looking at Buyers Options, I like how you think !
Hey Introvert, I thought prices were actually high in 2008 as market was then flat for 6 years, we were young and bought in 2001, house up almost 400% since then, I regret paying off mortgage so quickly (4 or 5 years) as money would have been better off invested.
Introvert : “Anyone in Victoria who followed Garth Turner’s RE advice has forfeited literally several hundred thousand dollars of tax-free price appreciation”
So according to that graph, if in 2008 (the year of your first Garth Turner link) you paid ~$590k, and it were worth $880k in 2019, it was a gain of a whopping 3.7% average annually for 11 years, tax free, assuming you can sell when you want to. Once you account for property taxes, regular repairs, big rare repairs (roof, ouch!), upkeep, renovations, gardening, etc, etc, etc, it would be more like 3% annual average increase (tax free) — and 3% is being generously high. Also, that doesn’t count the value of the personal time/effort/bother involved.
Is 3% seriously what the gloating is about here? I’m a homeowner too, but I don’t see what that is about.
I’ve never followed Garth Turner, but wasn’t he recommending investing in stocks instead? In the last ten years (ending June 30, 2019)annualized average returns of benchmark indexes are:
S&P 500:14.70%
Dow Jones Industrial Average: 15.03%
Russell 2000: 13.45%
MSCI EAFE: 6.90%
(https://www.wealthsimple.com/en-ca/learn/average-stock-market-return#stock_market_return_historically)
Which one of those benchmark indexes is worse than a 3% return, or even comes close to being as bad, even after taxes?
Main thing w/ SARS was that it wasn’t until about 5 days after symptoms showed up that you could transmit the virus. It wouldn’t have gotten even as much traction as it did if the Chinese govt hadn’t hidden it originally. In the end though it was probably a good thing, since at least they’re more open about this one, and taking it way more seriously.
Yeah flu kills about 1/1000 vs. this at 1/50.
FYI I’m not trying to tell people to be worried. Currently there’s nothing to worry about here. I’m hoping they contain it in China, because it’d be damn hard to do what they’re doing here. I can’t imagine trying to tell people in a city double the size of Toronto that you can’t leave the city. Really hope it works out.
Anyone in Victoria who followed Garth Turner’s RE advice has forfeited literally several hundred thousand dollars of tax-free price appreciation.
Has Garth ever received any criticism from his acolytes for being so wrong, for so long?
Note that the ’08 global financial crisis only caused Victoria SFH prices to go flat for a number of years:
Retrospective… ouch!
http://www.greaterfool.ca/2008/03/13/letter-from-victoria/
https://www.greaterfool.ca/2012/06/14/men/
re: coronavirus and vacations
We’re booked to fly to Indonesia (Bali) in March. At the time of booking I avoided connecting flights into Hong Kong (continuing unrest) and Philippines (Taal volcano wreaking havoc with the Manila airport schedule). So we settled on Taipei. Should be interesting! Needless to say I’ve loaded up on medical and trip cancellation insurance like a kid in the candy store.
Tieing coronavirus back to housing – if it does turn out to be bad, we may have that black swan event that torpedoes financial markets. It’s hard to see how housing would escape the fallout.
Barrister said: “Early reports of people cancelling their cruise ship vacations.”
I don’t blame them. Generally speaking cruise ships already have a terrible reputation for viral outbreaks, could you imagine being on a cruise where somebody has tested positive for the Coronavirus? Well, actually, it has just happened on two cruise ships.
After finding somebody sick with Coronavirus, at this very moment “the Diamond Princess is anchored off the coast of Yokohama, near Tokyo, with 1,045 crew and 2,666 passengers — including 428 Americans — on board. “. Everybody on board is stuck quarantined on the boat for 14 days. I imagine passengers won’t be up for freely enjoying the ship’s amenities . Talk about cabin fever!
On a different ship, “the World Dream, is docked at Hong Kong’s Kai Tak Cruise Terminal with 1,800 people on board,”
https://www.cnn.com/2020/02/05/asia/coronavirus-cruise-quarantines-intl-hnk/index.html
I hope it doesn’t come to pass, but I also found some expert opinions in another article interesting, where they posit:
(1) It is unlikely it will be contained the way SARS was. “Independent self-sustaining outbreaks [of 2019-nCoV] in major cities globally could become inevitable because of substantial exportation of pre-symptomatic cases,”.
(2) Two scenarios to answer the question, “What will a world with endemic 2019-nCoV — circulating permanently in the human population — be like?”
https://www.statnews.com/2020/02/04/two-scenarios-if-new-coronavirus-isnt-contained/
The Spanish flu death rate was about 10% just like SARS but unlike SARS the total number of deaths was about 30 million. Ebola would be far fiercer if it transmitted more effectively.
Yeah I just read today about a newborn baby that was detected to have the virus – 30 hours old! They think it was passed on from the mother as she had it. Pretty scary!
Seems too early to be sure about that.
The estimate by dividing deaths/currentCases is flawed, because it takes about 14 days after diagnosis to die. If you divide deaths by # of cases two weeks ago, the death rate is much higher. On the other hand, there may be many more milder/asymptomatic cases that are undetected, which would lower the rate.
It seems unlikely that China would have taken such extreme measures (shuttting down cities, building a new hospital in a week) if this was just something as lethal as the “flu”. But of course let’s all hope it is just like the “flu”
A big hope is that the virus weakens over time, and can be contained. It seems cases outside China are milder, so maybe that’s happening.
Thanks for that correction.
2% is a death rate several times higher than that of seasonal flu, so efforts to contain coronavirus are certainly warranted.
Seasonal flu causes ~3,500 annual deaths in Canada.
Reading recently about all of the flooded basements in Oak Bay and all of the failed drainage tiles and the problems that come with both I’m one damn happy renter
SARS was 10%. This corona virus is 2%. SARS wasn’t as easy to transmit as this one though, which they think can be transmitted before any signs of symptoms. It took SARS a number of months to get to the 8400 or so cases that happened. It’s taken only a couple of weeks to go from very low numbers to over 20 thousand with this one. This new corona virus will have killed more people than the SARS virus did by the end of the week. Mostly men, and mostly over 60, but also other people. The two deaths outside of mainland china so far were men aged 39, and 44.
It doesn’t generally kill the doctors that are treating flu patients though. Which has happened with this new corona virus. There’s a reason hospital workers are now wearing what are essentially hasmat suits.
But Local Fool is right in that coronavirus isn’t particularly deadly compared to SARS, which killed approx. 20% of those who contracted it (coronavirus = 2-4%, I think). And the regular non-named flu strains kill thousands annually, with little publicity.
Comparing it with the flu is silly.
People infected with Aids this year is also a much lower number than the flu. Tell me which one you’d like to catch?
This new corona virus (SARS was also a corona virus) is deadlier than the flu, it’s just that less people have caught it. The number of people that are being diagnosed with it are doubling every 6.4 days currently, and that’s even with China quarantining over 50 million people within their cities.
We also know how the flu behaves. We have no idea how this Corona virus will mutate. At this point there’s a very small chance that it can be contained to China, otherwise we have another disease that will be endemic in humans. If it manages to make it out of China into places like Bangladesh or the Congo, there’s going to be a lot more than 10,000 deaths.
Please don’t challenge my cynical dismissivness…
Not fear mongering. It’s because of modern containment response that these viruses aren’t killing many. Unchecked coronavirus and SARS would have likely killed hundreds of thousands or millions. mortality rate is order of magnitude more than flu.
ZzzZzZ. I’d be far more worried about getting the flu. In fact, I’d be more worried about catching a cold. Right now, this new virus is estimated to have killed about 630 globally, with most of those in China.
The garden variety flu (influenza) by comparison, in the United States alone, has already resulted in 19 million illnesses and killed over 10,000 just this season. And, no headlines – just the odd washroom sticker and Pharmacy billboard reminding you to wash your hands and get a flu shot.
Media pulled this same stunt with SARS, Mad Cow disease, Super TB, Avian flu and the list goes on and on. Soon enough this “Corona virus” or whatever scary name that people give it will be yesterday’s forgotten news.
Actually, if the virus continues to spread how comfortable will most Victorians be in being around the tourist areas?
Wonder what impact the virus might have on tourism in Victoria. Early reports of people cancelling their cruise ship vacations.
Summer jobs, small scholarships, and parental contribution meant no student loans. Definitely helped me buy a place sooner.
Nope. Never owned a property anywhere until this one.
And not having to pay off student loans because your parents paid for your school… how did that affect your ability to buy?
Did you own in Calgary as well? Or was this your family’s first house purchase?
It does, but that gift pushed my down payment from 14% to 18% and didn’t affect my ability to buy.
I stand corrected on that extremely uncommon but apparently proper usage.
Leo S, your high end chart linked to above captures numbers for the “core”. I can imagine the core being defined several different ways. What geographical bounds are we talking about here?
https://www.merriam-webster.com/dictionary/invective
See that second definition.
Where’s the joy now?
“Luck?
Yes, I luckily didn’t heed the advice of renters 10 years ago.”
I would say that receiving money from parents for a down payment involves some luck.
A lot of you probably already know this, but for Victoria you can look up yearly assessed property values online going as far back as 2016 (whilst the BC Assessment site appears to only have access to most recent assessed value).
Well, its only useful if you’re one of those people that finds assessed value to be a useful “view from 10,000 feet” tool.
For Victoria:
1. Go to https://www.victoria.ca/
2. Click on “VicMap”
3. Click on “Launch VicMap” (then wait a minute)
4. Go to the “Search Tools” tab
5. Click on “Address Search” and enter the target address
6. On the left hand side of the page, click on “Create Parcel Report” (then wait a minute)
7. Finally, click on “View Report” to download a PDF which contains all the info for the target property
“Invective” is a noun. You seem to think it’s an adjective.
I also get joy from other sources.
The personal sniping is not adding much to the blog in my opinion.
I find it interesting that about a quarter of all purchases are first time buyers. This seems, at first sight,to be a fairly healthy number.
all your fault local!
Sigh. I’m sorry I asked…
Ooookay.
Coming from the person who’s accused people on this blog of killing their children.
It’s funny how invective you get when someone points out how shitty your life must be when your sole source of joy seems to be telling people who rent how much better you are than them.
The time travelling house purchase was literally to point out how stupid you are. Clearly you’re having trouble with reading comprehension. Maybe should have paid a bit more attention in class.
No worries, Leo. One slip in 10 months ain’t bad at all.
At any rate, your lackeys are always there to defend you, no matter the criticism.
🙂
I didn’t even notice. I guess I only notice when it’s wrong.
A while back, Soper said he travelled back in time and bought a house.
But I can assure you, stories about time travel to buy a house in Victoria aren’t at all a manifestation of renter desperation.
Still the case. Still often forget.
I would like to point out that I remembered how to spell “led” this time, so there’s that.
The last time I took issue with Leo’s admixture of personal bias within ostensibly neutral fact-reporting, he characterized my critique thusly:
“Irritating, but correct. 🙂 “
Adding,
“I’ll try to remember to resurrect the “My take” section that I created a while back for just this reason.”
I could have sworn you said you bought a house.
People didn’t think it was a favourable time to buy in 2009. Quite the opposite.
Leo described it this way:
“Most (me included) thought early 2009 was the end of the (financial) world and were just happy to hang on to their job rather than out looking for deals.”
Luck?
Yes, I luckily didn’t heed the advice of renters 10 years ago.
Sorry? what am I desperate for?
I’m happy with my rental.
It’s his blog, and it contains his opinion. How much are you paying for his journalistic integrity?
In case this article for January hasn’t already been mentioned here:: “more than three quarters of B.C. residents are in favour of various housing taxes meant to address speculation, a new poll has found.” https://bc.ctvnews.ca/over-75-of-b-c-residents-in-favour-of-housing-taxes-poll-finds-1.4758979
But to add my two cents to the conversation directly below, not all home owners are about cheering on higher prices at any cost to society. Back in 2018, “in Vancouver… nearly three quarters of owners said the cost of a home was “unreasonably high” — 20 per cent said prices should drop by 30 per cent or more, and 29 per cent by at least 10 per cent.” https://www.cbc.ca/news/canada/british-columbia/housing-costs-vancouver-toronto-angus-reid-poll-1.4798828
Why would so many homeowners want lower prices, despite owning a home? A few thoughts off the top of my head:
A. They empathize for their children, nieces, nephews, children of friends, or any local people (whether children or not!), who will otherwise not have the chances that the homeowners once had, and be forced to move elsewhere, buy a small place (which affects the kind of family they can raise), or possibly rent indeterminately, and related financial hardships.
B. They plan for the sale of their home (in the distant future) to in large part be directed towards the purchase of another home (e.g. a bigger home for themselves, or an equivalent home to pass off to one or more children). So, if sale proceeds will just move to another property, not so important what that value ends up being (unless they like carrying a big line of credit on their home)
C. (Less likely considered) They realize that for every dollar that isn’t set aside to pay mortgage interest, that is money that likely will be circulated in the local economy, producing more tax revenue, helping us all.
You really do think quite highly of yourself because you got lucky and were able to purchase a house at a favourable time . I’m willing to bet since that is the only thing you ever brag about on here (and how it has increased your net worth so much) that you probably aren’t successful in any other areas of your life… which is kind of sad.
But you go girl, you tell those desperate renters, those bottom feeders of society, how much better you are as a person and as a contributor to society because you “own” a house.
Slow clap from this guy. I bet you are a real peach in person as well.
“Concerning for whom?” was more of a rhetorical question, as we all know desperate renters like yourself would be the most concerned by further price increases.
My objection, though, was related to Leo’s journalistic presentation.
Many BCers buying a second property and leaving it vacant pay no net spec tax on the first $400k, (due To a $2k spec tax credit offsetting the $2k spec tax). Those low priced homes are just as desirable to open up to rentals as a $20m Vancouver mansion, yet the spec tax leaves them alone. To help with low vacancy, BCers should be spec taxed like everyone else, but our govt has designed the tax to mainly target a small number of foreigners.
For anyone who cares about the city more than their investment. You only think about yourself.
Most of the Canadian population growth was students and temporary foreign workers. So… how does that help BC?
OSFI is likely to turf the requirement to pass the higher of the benchmark rate and contract (market) rate +2% for the stress test.
Won’t make a big difference, but could cut effective qualifying rate by about 0.25% given that the benchmark rate is about 2.25% higher than the average contract rate.
Tiny sample size, and most of them seemed to be from out East to begin with. Seems like immigration is the main source for growth in all provinces these days.
You’ll be happy to hear that stats can reports that BCs population growth (by %) leads the nation in the most recent quarter. (2019Q3) https://www150.statcan.gc.ca/n1/pub/71-607-x/71-607-x2019036-eng.htm
What is this segment in terms of $$$?
Commercial and industrial requires floor drains in wet area, but not in residential as per plumbing codes. Floor drains waste water as it need trap primer, and required regular dirt/sand removal maintenance that homeowner tend to neglect.
It depends on the demographic. Some will say that there is a crisis, and other will say the price is fair. And, there are people who lives in cities that have much cheaper rent than Victoria says that their rent is unaffordable.
https://nationalpost.com/news/canada/charlottetowns-housing-crisis
Even inexpensive rental places such as Charlottetown are claiming housing crisis.
https://www.numbeo.com/cost-of-living/compare_cities.jsp?country1=Canada&country2=Canada&city1=Victoria&city2=Charlottetown
Note that none of the people profiled are moving to BC, despite its low unemployment. What could be the reason?
Concerning for whom? This sentence sticks out amid an otherwise neutral reporting of facts.
(From the previous thread:)
The theme of the HHV blog since its inception in 2007.
“The only market segment that could be still described as weak is the high end, where conditions continued to weaken year over year in Q4 2019.”
For those who have the $$$, entry level luxury appears to be much better value than over-priced $700k -1 million segment. This is especially true if you could buy a good chunk of land in the core.
This caught my eye:
Why Calgary is losing its young adults
https://www.cbc.ca/news/canada/calgary/calgary-losing-young-adults-census-data-analysis-1.5444969