Market takes off, how much pent up supply and demand is there?

This post is 4 years old. The data and my views may have since evolved.

After a couple months of gradual strengthening, the market has really taken off in the last week.   Not only did sales surge well past last year’s levels, but after new listings recovered they have since stalled for the time being.

The spike in sales was driven primarily by single family detached, but condo sales have also regained last year’s levels.   The activity in the detached market is particularly remarkable, with not only nearly one in four places selling over ask, but sales up dramatically even over the $1M dollar mark, a segment of the detached market that was previously weak.   Perhaps it will prove to be temporary, but make no mistake this level of activity in the detached market leads to price increases (detached median in June is currently $880,000, the highest on record).  What’s quite interesting is that this surge in detached activity is being reported all over North America.

However this market is still somewhat artificial. Without the pandemic we would have had a lot of people buying and selling in the past months that instead decided to hit pause on their plans.  Now we have those buyers and sellers coming out of the woodwork, and quite a few of the ones that previously hoped to buy or sell in the spring will now be putting their plans into action in the summer instead.

We hear the term pent up demand a lot, but it’s never quantified. How much pent up demand is out there? And what about pent up supply? Well we can’t know for sure, but the unique nature of this market disruption lets us estimate and then track how much pent up supply and demand we may be burning through in the next couple months.  As a baseline assumption, we can take last year’s market as the natural level of supply and demand out there, and add up all the sales and listings that we missed out on while the market was depressed.

You can see that at peak, we were missing about 1075 new listings and 775 sales due to the lockdown.  Now that restrictions are mostly lifted and BC has done a stellar job at containing the outbreak (unlike some other places), most of those prospective buyers and sellers may be itching to get on with it.  That is the pent up supply and demand we are seeing hit the market now and if the estimates are roughly on the market we could see another 700 sales and 1000 listings distributed over the rest of the summer.

Of course you could argue that this is either an underestimate or overestimate of pent up supply and demand.

  1. Some prospective buyers will put their purchase on hold indefinitely instead of buying now either due to changing financial circumstances or to wait and see if prices come down.
  2. Additional listings may continue to come on the market due to the weak AirBnB and rental market, increasing supply.
  3. Forced selling could increase supply in the fall.
  4. The sales rate was higher than last year’s levels before the pandemic so measuring relative to last year would underestimate demand.

So the estimate of pent up supply and demand is just that, an estimate.   What it does do is give us the ability to guage when the pent up supply and demand may be exhausted, at which point we would get a truer sense of the market.   During the lockdown market activity was unnaturally low.   Due to pent up supply and demand, market activity in the coming two or three months will likely be unnaturally high.   Just like the past three months were not an accurate reflection of the new normal, we won’t know the true state of the market until this overactive period is behind us as well.


Also weekly numbers courtesy of the VREB

June 2020
June
2019
Wk 1 Wk 2 Wk 3 Wk 4
Sales 125 284 519 740
New Listings 378 702 1013 1221
Active Listings 2637 2730 2700 3040
Sales to New Listings 33% 40% 51% 61%
Sales YoY Change -41% -27% -7%
Months of Inventory 4.1

The decrease in inventory is not going to be good news for house hunters, where again the shortage is on the detached side with active inventory for single family down 24% from last June while the number of condos for sale is up about 2%.    With the big jump in sales, we will easily exceed last year’s sales total and the 10 year average for June.

116 Comments
Newest
Oldest Most Voted
Inline Feedbacks
View all comments
Former Landlord
Former Landlord
June 25, 2020 9:03 pm

When we bought our first house, we made an appointment as soon as it was on the market for the next day. An open house was not manned for that weekend. It was so much better than any other house we had seen at that price range, so we pushed hard to get our offer accepted before the open house, since we were worried someone else would also see the value there. So the fact of there being an open house had influence on us wanting to close quickly.
When we sold our house we had an open house scheduled a few weeks after it came on the market. 2 houses down in the same sub division came on the market a week later priced well below ours and scheduled their open house an hour before ours.
We had one visitor to our open house that had also first visited the neighbour’s open house. We sold to them close to asking, since they felt our place was worth the extra money compared to the house down the street.
I think I may only been to an open house once and for me they don’t seem to offer that much value. However, I wouldn’t say they are a complete waste of time.

James Soper
James Soper
June 25, 2020 4:42 pm

Picking up clients at open houses was never of any interest to me so I’ve always hated open houses. I was already doing 70+ deals/year by 2013 so generating business has never been an issue.

Sorry, bit unclear with the answer there. You started before 2013 clearly since you’ve been on here since 2008. Did you do open houses when you were just getting started and didn’t have many clients?

Mount Tolmie Foothills
Mount Tolmie Foothills
June 25, 2020 3:37 pm

You guys do realize aluminium wiring is like 50 years old now? Would you be shocked if cooper wiring in a 50s/60s house needed to be replaced?

Actually, yes, I would be shocked if copper wiring of that age needed to be replaced. Copper doesn’t wear out and by the 50s the insulation was sorted and quite durable.

Admittedly, older houses don’t have enough receptacles for modern usage.

As for aluminum, the main service to most every house uses aluminum wiring.

Dad
Dad
June 25, 2020 2:30 pm

“I only ever went to open houses when I wasn’t serious. If I was serious, I’d have made an appointment. They’re great for attracting looky loos, but why would a seller bother with that?

I’ve been to one of Marko’s open houses. He does indeed sit there working on his laptop. Which suited me fine.”

One time we put an offer on a place that we saw during an open house, using a realtor that we met at a different open house. That was an anomaly though. Same as you, every other time I’ve gone to an open house I haven’t been serious.

I am one of those people who does not like salespeople and do not plan on using a realtor next time.

Panko
Panko
June 25, 2020 1:19 pm

I concur with Marko about open houses based on my own experiences going to them:

  1. I only ever went to open houses when I wasn’t serious. If I was serious, I’d have made an appointment. They’re great for attracting looky loos, but why would a seller bother with that?

  2. I’ve been to one of Marko’s open houses. He does indeed sit there working on his laptop. Which suited me fine.

Marko Juras
June 25, 2020 1:09 pm

Just don’t do them, then. Pretty simple. It’s not like at this point you need to pander to anyone.

Problem is other agents sell open house in their listing pitch and sellers actually think they work so I would lose listings if I refused to them them, even thought the are a complete waste of time.

Did you think that when you were first starting out Marko? or did you do them to get clients?

Picking up clients at open houses was never of any interest to me so I’ve always hated open houses. I was already doing 70+ deals/year by 2013 so generating business has never been an issue.

I’ve actually had a number of people mutter as they are walking out of an open house….”I would never hire that guy.” I just sit and work on my laptop and answer questions people may have. 100% not a salesperson…..”can you picture your family in their beautiful house, check out the quartz countertops, etc.” I have a niche client base and it isn’t those that want a salesperson.

Barrister
Barrister
June 25, 2020 12:37 pm

I suspect a lot of people will think twice before having an open house in any property that they are still living in.

Introvert
Introvert
June 25, 2020 12:31 pm

Brutal….was hoping open house would never come back, ever. Such a huge waste of time.

Just don’t do them, then. Pretty simple. It’s not like at this point you need to pander to anyone.

James Soper
James Soper
June 25, 2020 11:37 am

Brutal….was hoping open house would never come back, ever. Such a huge waste of time.

Did you think that when you were first starting out Marko?
or did you do them to get clients?

Marko Juras
June 25, 2020 11:08 am

Open houses coming back with some restrictions

Brutal….was hoping open house would never come back, ever. Such a huge waste of time.

So this month we will have higher sales than last year, no open houses…….hmmmm.

Deb
Deb
June 25, 2020 9:18 am

Price increases are incredibly rare.

But they do happen eh Marko Juras!

Introvert
Introvert
June 25, 2020 9:17 am
Introvert
Introvert
June 25, 2020 9:13 am

New tallest building on Island is in downtown Victoria

https://www.timescolonist.com/real-estate/new-tallest-building-on-island-is-in-downtown-victoria-1.24159688


Les Leyne: Sinking feeling as province tries to deal with condo insurance crisis

There’s also the revelation that commissions to brokers can be as high as 20 per cent, which is verging on absurd.

https://www.timescolonist.com/opinion/columnists/les-leyne-sinking-feeling-as-province-tries-to-deal-with-condo-insurance-crisis-1.24159693

patriotz
patriotz
June 25, 2020 8:59 am

Would you be shocked if cooper wiring in a 50s/60s house needed to be replaced?

You mean iron bands or something? 🙂

Marko Juras
June 25, 2020 8:05 am

Price increases. Never did understand the rationale. For example Marko your listing 201 – 989 Johnson. Listed $368,800, price raised to $389,900 a month later, then sold $368,800 two weeks after that.

We had three offers in three days all of a sudden. Seller accepted a full price offer (with two weeks of conditions) THEN increased the prices as he felt if the offer collapsed maybe we would get an offer above $368,800. Having listed 500+ properties this is one of a kind scenario.

Price increases are incredibly rare.

Marko Juras
June 25, 2020 8:03 am

You guys do realize aluminium wiring is like 50 years old now? Would you be shocked if cooper wiring in a 50s/60s house needed to be replaced?

LeoM
LeoM
June 24, 2020 11:23 pm

Marko said: “You don’t re-wire a house with aluminium; you address the pig-tail connections.”

That sort of true, but that’s not the whole story. The insurance companies don’t like aluminum wiring for good reasons… aluminum wiring has caused thousands of house fires. It’s not just the pig-tails in the receptacle boxes, the real problem is the hidden junction boxes; hidden behind drywall. These illegal hidden junction boxes are common in most house that have had any renovations in the past 50 years. They are ticking time bombs, I just repaired one for a friend last year. The electrical resistance in that junction box was so hot it had melted the wires, charred the adjacent stud, and of course it finally blew the circuit breaker. BTW that anti-corrosion paste you put on pig-tails only lasts a couple decades or less.

Ash
Ash
June 24, 2020 9:32 pm

Demonstration model of a tiny home made from shipping container coming to Fernwood this fall-
https://www.westcoastcontainerhomes.ca/
Looking forward to seeing more of this.

James Soper
James Soper
June 24, 2020 8:57 pm

Open houses coming back with some restrictions

Tell me more…

JustRenter
JustRenter
June 24, 2020 8:22 pm

Some people are packing up their stuff and moving . Have you noticed this?

Introvert
Introvert
June 24, 2020 5:37 pm

Also, I’m afraid myrealitycheck.ca isn’t offering Deb much reality.

Introvert
Introvert
June 24, 2020 5:35 pm

@Marcus

and

@Marco Duras

How many ways can Deb butcher Marko’s name, I wonder.

Deb
Deb
June 24, 2020 5:30 pm

@Marco Duras

Sorry, perhaps I am looking at the wrong site but according to My Reality Check for there were price increases especially in May 2016 when there were 709 in the lower mainland. https://www.myrealtycheck.ca/index.php?

QT
QT
June 24, 2020 4:01 pm

I wonder how much it will cost to have a typical 25 unit building re-wired to code?

15+ years ago I was told 20-22K to rewire an average house by an electrical company owner, and that doesn’t include drywall cutout or repair and repaint.

Pig tail work should be for all connections at recepticals and fixtures.

Introvert
Introvert
June 24, 2020 3:02 pm

Home prices in Vancouver haven’t gone down because people affected by COVID couldn’t afford them to start with

https://www.cbc.ca/news/canada/british-columbia/home-prices-vancouver-renters-owners-covid-1.5625656

James Soper
James Soper
June 24, 2020 2:24 pm

https://www.cbc.ca/news/canada/calgary/westjet-layoffs-pandemic-1.5625543

WestJet laying off 3300 workers permanently.
In local news, MoLe is closing both it’s locations permanently.

alexandracdn
alexandracdn
June 24, 2020 1:43 pm

“You don’t re-wire a house with aluminium”

It was just interesting in Leo M’s post “Strata insurance rising costs” ……………. a few paragraphs down one of the strata residents said, “We are being asked to replace ALL of the aluminium wiring in the building which is far beyond BC Building Code.”

By this, I was thinking as Leo S said………you never know down the road what the insurance companies might as for in order to insure you building.

Marko Juras
June 24, 2020 1:12 pm

I wonder how much it will cost to have a typical 25 unit building re-wired to code?

You don’t re-wire a house with aluminium; you address the pig-tail connections.

Marko Juras
June 24, 2020 1:11 pm

Simple, they decide to do some minor reno, paint etc or they take the home off the market and put it back on at a higher price. It was happening allot in 2016

No it wasn’t.

James Soper
James Soper
June 24, 2020 11:55 am

A lot of the case increase in the US is among younger people. So the death rate may be lower than in the first part of the first wave.

I guess I feel like it’s a conservative estimate, because they won’t shut down like NY did, although they are doing mandatory masks in Florida. A 1/5 of all adults in Florida are over 65 though(vs. 15% in California and 12% in Texas), so the demographics work against them in Florida.
I guess we’ll see in the next two weeks whether it gets over 10 thousand cases a day (I guess 20000 should be the # in California)
They’re doing nearly 30 thousand tests a day currently in Florida, so hopefully the data won’t be limited by that.

Deb
Deb
June 24, 2020 11:44 am

How often do sellers increase their prices?

For instance last month 203, 1000 Park Boulevard went from $649,900 to $675,000 and 111, 3008 Washington Ave went from $409,000 to $465,000

Deb
Deb
June 24, 2020 11:38 am

How often do sellers increase their prices?

Simple, they decide to do some minor reno, paint etc or they take the home off the market and put it back on at a higher price. It was happening allot in 2016

alexandracdn
alexandracdn
June 24, 2020 11:28 am

Re: Strata Insurance costs & aluminum wiring.

I imagine most on here know that pretty well all houses and condominiums built in the 70’s were built using aluminum wiring. In later years many owners had electricians come in and put copper (piggy?) ends at the wiring closet to receptacles. I had this done in a couple of places I owned but probably this wouldn’t make the grade for insurance purposes now.

So many of the 70’s condos have had their building remediation done. Lots of owners paid up to $100K each for this. I know though most did not have their building or their individual units rewired. Usually it was just new insulation, siding, balconies and windows.

I wonder how much it will cost to have a typical 25 unit building re-wired to code?

Former Landlord
Former Landlord
June 24, 2020 11:26 am

Doing groceries half as often may mean the same total time in the grocery store, (and same contact rates), because a big shopping might take twice as long as two small ones.

There are less people in stores and people are (mostly) keeping their distance. Cashier’s behind plexiglass. I have less of “contact rate” being at the grocery store than before the pandemic even if I am in the store twice as long.

Sideliner
Sideliner
June 24, 2020 11:26 am

I hope that we get a lot more transparency from CMHC in the future on both data and their models. Given it’s taxpayer money providing the insurance the taxpayer should have full transparency.

Since CMHC is taxpayer funded, it’s subject to FOI requests. Might be able to get the transparency you want:

https://www.cmhc-schl.gc.ca/en/about-cmhc/corporate-reporting/transparency/access-to-information-and-privacy-protection/to-make-a-request-under-the-access-to-information-act

Former Landlord
Former Landlord
June 24, 2020 11:21 am

As of today June’s ask price reductions reached 115 and no price increases.

How often do sellers increase their prices?

Caveat Emptor
Caveat Emptor
June 24, 2020 11:19 am

“seems like it’s set up for at least 60 thousand more deaths in July alone”

A lot of the case increase in the US is among younger people. So the death rate may be lower than in the first part of the first wave.

James Soper
James Soper
June 24, 2020 10:35 am

We’re not even fully open with under 20 cases a day. Florida & Texas have over 5000 a day right now, and are actively talking about not shutting down in comparison. 5000 cases a day was what New York was at the day it shut down.

Just looking at what’s transpiring in the states right now, based on previous numbers, seems like it’s set up for at least 60 thousand more deaths in July alone. All concentrated in the most populous states.

Patrick
Patrick
June 24, 2020 10:11 am

… Oh CanadAA+

Canada loses its triple AAA bond rating.
https://www.bnnbloomberg.ca/canada-loses-aaa-rating-fitch-downgrades-amid-virus-costs-1.1455645

The rating agency (Fitch) commented…
“[Canada] reliance on foreign portfolio flows to finance sustained current account deficits is a weakness, which has contributed to a persistent and growing level of net external debt. Pandemic lockdown measures and depressed global oil demand will cause a severe recession of the Canadian economy with 7.1% GDP contraction in 2020”

James Soper
James Soper
June 24, 2020 10:04 am

I agree that we are looking at a second round of job losses but I really cannot seeing another lockdown unless there is a massive rise in Covid.

I don’t see Bonnie Henry throwing the province to the wolves personally.
If there’s a spike in cases, I can’t see us staying open.

We’re not even fully open with under 20 cases a day. Florida & Texas have over 5000 a day right now, and are actively talking about not shutting down in comparison. 5000 cases a day was what New York was at the day it shut down.

Introvert
Introvert
June 24, 2020 10:01 am

Given what has transpired in 2020, is there anyone who has a reason to say “I’m good at predicting”

Leo oughta dig up some random CMHC outlooks from recent years and then compare them with what actually happened. I think that would be enlightening.

Barrister
Barrister
June 24, 2020 9:56 am

James: I agree that we are looking at a second round of job losses but I really cannot seeing another lockdown unless there is a massive rise in Covid.

James Soper
James Soper
June 24, 2020 9:14 am

And still predicting a drop in sales in Q3 and Q4. Truly baffling.

short of another full scale lockdown.

I guess I see a lockdown as more likely here than say Florida even with the case jump there, since we’re going to get cases, and they will lock it back down.

I still think there’s going to be another round of people losing their jobs as well.

Deb
Deb
June 24, 2020 8:59 am

More and more price drops each day, sales may be up because prices are down. As of today June’s ask price reductions reached 115 and no price increases.

Patrick
Patrick
June 24, 2020 8:59 am

Let’s just say it. Seems like CMHC sucks at analyzing and predicting.

Given what has transpired in 2020, is there anyone who has a reason to say “I’m good at predicting”

Introvert
Introvert
June 24, 2020 8:06 am

And still predicting a drop in sales in Q3 and Q4. Truly baffling. Likely because they put out the national forecast and then couldn’t afford to contradict it entirely 2 weeks later.

Let’s just say it. Seems like CMHC sucks at analyzing and predicting.

Further in support, I recall Leo a long time ago deeply calling into question the accuracy of CMHC’s overvaluation colour warning assessment for Victoria.

Patrick
Patrick
June 24, 2020 7:25 am

there is no public support for masking

huh?

Leger survey of 1,536 Canadians, May 29, 2020
p38 https://leger360.com/wp-content/uploads/2020/06/Leger-National-Weekly-Pandemic-Tracker-June-1-2020.pdf

CTC84. Should the wearing of a protective mask be made mandatory for all Canadians when they are out in public and confined spaces such as grocery stores, shopping malls or public transit?

Canadians Yes 51%, 36% no (48% currently wear masks)
BCers. yes 46% no 42%. (40% currently wear masks)

Patrick
Patrick
June 24, 2020 7:11 am

Obviously other industries are impacted more, but I expect we could get back to at least a 95% economy while reducing interactions by 35%.

95% economy without increasing cases?…..I don’t think so. Areas of the economy not dependent on human contact/interactions are already open, so the last parts of the economy still closed (concerts, gatherings, in-class education, tourism) are the hardest to re-open as they are highly dependent on contact and more likely to increase cases.

For example all the grocery stores are still open, but if we reduce our trips to them by 35% we would be meeting the objective.

The BC. models are talking about “contact rates” which is a combination of number of contacts and time. Doing groceries half as often may mean the same total time in the grocery store, (and same contact rates), because a big shopping might take twice as long as two small ones. Going to a restaurant/salon/movie theater half as often also halves the business revenue.

Whatever number you assign to it, their models are telling us that we are close to the point where further increases in contact rates will cause more cases.

p16 https://news.gov.bc.ca/files/2020-06-23-Modelling-Technical-Briefing.pdf
“Our [BC] models suggests that contact rates since mid-May are roughly 65% of normal, which is roughly the threshold for a rebound in new cases. As expected following some re-opening, models suggest that British Columbia is now closer to a threshold where renewed growth of cases could occur.“
====——

Anyway, my point is that we should make masks mandatory to allow more of the economy to open without increasing cases as much.

totoro
totoro
June 24, 2020 7:02 am

This pandemic will pass one day, but my guess is that it will cause some older homeowners to plan to stay in their SFH for as long as possible. A suite can be a perfect place for a live-in caregiver or caregivers and a reverse mortgage in an appreciating market could make this a much more affordable option than the current assisted living/retirement home model.

Barrister
Barrister
June 24, 2020 5:49 am

Totoro: You are making some very rational points but there is no public support for masking. You may have noticed that social distancing is beginning to fall to the wayside. Personally I suspect that there is a strong probability of a major outbreak as we start to open up and we see more out of province travelers arrive. I truly hope that I am wrong but looking south of the border at some of the American states suggests otherwise.

I also suspect, short of the hospitals being absolutely swamped and temporary medical cots in hockey arenas that there will not be any further lockdown of businesses. Of coarse opening up will not save a large segment of the tourist industry until we open the US border and even then it may not be enough to save a lot of smaller businesses.

While I am spewing out random thoughts this morning I also suspect that if we have a major outbreak of Covid similar to Ontario or Quebec) that this will produce a greater demand for SFH and townhouses. I have talked to more than one retired friend who is actively looking for a SFH because of Covid. Rightly or wrongly one friend of mine, happens to be a doctor, just bought a SFH and sold his condo at least partially based on his opinion that elevators are Covid death traps for elderly people. Having said that I actually dont have any solid proof that this is a factor in the sale of SFH. Personally I avoid elevators like the plague.

totoro
totoro
June 23, 2020 10:58 pm

I don’t think that is how it works – it is about safely increasing contact rates to maintain low infection rates, not just keeping contacts at 35% less than normal. Masking and physical distance combined cut transmission rates by 80%. Stepping into a grocery store where you cannot maintain distance and people are not wearing masks is not what I’d call a super safe activity even if you are doing it less than normal. Any significant increase in infection rates is going to hit the economy again so not sure why we haven’t added mandatory masking in public indoor spaces yet – particularly for employees. Guess it will come when rates rise.
https://globalnews.ca/news/7012933/physical-distance-mask-eyes-coronavirus-risk/

Former Landlord
Former Landlord
June 23, 2020 10:26 pm

And allow the BC economy to open up to more than 65% – the number the BC public health model has told us is the farthest we can go without increasing cases.

They are saying our interactions should be 65% of what they used to be. That doesn’t correspond 1 to 1 with the economy. For example all the grocery stores are still open, but if we reduce our trips to them by 35% we would be meeting the objective. Maybe slightly less economic activity from discretionary purchases at the store but not a drop of 35% of what I spend.
Obviously other industries are impacted more, but I expect we could get back to at least a 95% economy while reducing interactions by 35%.

totoro
totoro
June 23, 2020 9:42 pm

If compulsory masks lower Washington’s numbers, masks in BC would lower our numbers too. And allow the BC economy to open up to more than 65% – the number the BC public health model has told us is the farthest we can go without increasing cases.

Exactly.

Ks112
Ks112
June 23, 2020 8:23 pm

Umm yes really, ppl want to have their cake and eat it too. It’s really no different compared to everything else in life

Umm..really?
Umm..really?
June 23, 2020 7:11 pm

I am still not sure why so many are upset at the escalating insurance rates on strata? Haven’t those people been enjoying their escalating valuations? The cost of replacement is extremely high in BC especially in Vancouver and Victoria. It makes sense that the cost of insurance increase would be commensurate with the increase in value. Not to mention the risk that is carried with older buildings along with other factors. Are people expecting construction and replacement costs to drop? Or did folks think there wasn’t any impact on not spending on remediation, maintenance, and not building up a contingency fund? Eventually, the cost will be caught up somewhere in the chain.

Patrick
Patrick
June 23, 2020 6:47 pm

Washington needs it. After bringing daily new cases to around 200 they recently surged back up to around twice that

Yes.

If compulsory masks lower Washington’s numbers, masks in BC would lower our numbers too. And allow the BC economy to open up to more than 65% – the number the BC public health model has told us is the farthest we can go without increasing cases.

Introvert
Introvert
June 23, 2020 6:43 pm

Barrister mentioned that COVID may make detached SFH more appealing. I imagine ridiculous insurance hikes on stratas is going to have the same effect.

LeoM
LeoM
June 23, 2020 6:26 pm

If you thought condo property insurance premiums were high, here’s a new twist. Not only have premiums skyrocketed but if your building has aluminum electrical wiring then your entire building might need to be rewired before an insurance company will sell you insurance.

https://globalnews.ca/news/7093717/strata-insurance-costs-rising-bc/

Patrick
Patrick
June 23, 2020 5:14 pm

Washington state just made it a misdemeanor crime to not wear a mask when outside the home.
https://komonews.com/news/coronavirus/covid-19-inslee-announces-mandatory-face-mask-rule

ks112
ks112
June 23, 2020 5:01 pm

Here is another decent deal on a downtown condo with parking:
https://victoria.craigslist.org/apa/d/victoria-sunny-one-bedroom-condo-in-the/7123359486.html

patriotz
patriotz
June 23, 2020 4:22 pm

I say, let the lender bear the risk of default, then the loan will carry the correct cost of borrowing.

The feds cannot allow banks to take on too much risk, they directly guarantee the banks’ liabilities (i.e. deposits) thus the requirement for insurance on high ratio loans.

Private lenders can lend on any terms they want since if they go under the feds can just wave them goodbye.

Former Landlord
Former Landlord
June 23, 2020 3:52 pm

Am I correct that Canada backs Genworth mortgages 90%?

My understanding of how this works. Genworth has to pay the lender the difference between what the bank gets from auctioning off the house and remaining mortgage balance, because they are the insurer. Only if Genworth were to go bankrupt would the government step in and cover the difference up to 90% of the original mortgage amount.
This is much less risk exposure to the government than CMHC where it is backstopped by the government 100%.

bill green
bill green
June 23, 2020 2:26 pm

Am I correct that Canada backs Genworth mortgages 90%?
If so, how do the new guidelines protect us from the moral hazard of the new loans?
I say, let the lender bear the risk of default, then the loan will carry the correct cost of borrowing.
It’s all very simple, unless you want to build an economy based upon the sale of housing from
Canadian to Canadian (pyramid sales).

Morrisey
June 23, 2020 2:17 pm

“Is there a limit to the amount that Genworth etc can insure?”

I’m guessing not. At the governments whim, taxpayers will backstop the ponzi scheme.

freedom_2008
freedom_2008
June 23, 2020 2:04 pm

FYI: B.C. proposes first steps to address sky-high condo insurance

https://theprovince.com/news/local-news/b-c-proposes-first-steps-to-address-sky-high-condo-insurance/wcm/9df5bd16-67d1-4ba9-887d-67e5e614b240

Don’t see any details of those steps yet …

James Soper
James Soper
June 23, 2020 1:50 pm

CMHC changes look to have about zero impact.

It’ll have an impact on the amount and quality of mortgages that CMHC insures.

Is there a limit to the amount that Genworth etc can insure?

Patrick
Patrick
June 23, 2020 12:18 pm

So if there is stuff you want to do now is a good time because there is a very real possibility of a new major outbreak in BC.

That’s good advice Barrister. There have been good signs in June from the ROC lowering cases from ~1,000 to ~300 per day, but who knows how long that will last.

James Soper
James Soper
June 23, 2020 12:13 pm

So if this case is counted as a VI case, then the person’s community must also belong to VI as well (note VI health region includes a small part on the mainland that accessible via water/air only?)?
Don’t meant to poke into anyone’s private affair, but it is good to understand how and why if there are new cases started again on VI, after more than 6 weeks.

I personally don’t care to know who the person is, or what their age group is, but it’d be nice to know where they’ve been and whether you could have interacted with them. Saying their Age and Sex isn’t really useful or necessary information in that respect. The reason I say that it seems like the same case is that it was the same day as the noted case.

freedom_2008
freedom_2008
June 23, 2020 11:41 am

edit: looks like it was
https://www.vicnews.com/news/positive-case-of-covid-19-reported-at-tsawout-first-nation-health-centre/

Actually one comment under that article made it more clear:

“The person who tested positive was a visitor on business at the medical center (The Tsawout First Nation health centre in Saanichton). It is not a local resident. The person did business there then went home to their community and was tested there. They then reported the result to the medical center to alert anyone they may have been in contact with. This article is not well written! It reads like the infected person sought out medical care at the medical center but that is not the case!”

So if this case is counted as a VI case, then the person’s community must also belong to VI as well (note VI health region includes a small part on the mainland that accessible via water/air only?)?

Don’t meant to poke into anyone’s private affair, but it is good to understand how and why if there are new cases started again on VI, after more than 6 weeks.

Transformer
Transformer
June 23, 2020 10:29 am

Leo S, would you mind sharing where you got the yearly precipitation graph you posted couple of days ago?

Barrister
Barrister
June 23, 2020 9:42 am

Sometimes I wonder why people have trouble grasping the obvious when it comes to Covid.

1) There is still lots of Covid in Canada and as the country opens up (which it is doing) there will be increasing numbers of people travelling.

2) As BC opens up we will be increasingly more vulnerable to the spread of Covid.

3) As we have repeatedly seen a region can go from no infections to thousands in a very short period of time.

4) I know for a fact that the local Bed and breakfasts have out o f provinces guests here now and more booked this summer.

So if you are over 60 or vulnerable in any way you better figure out how to protect yourself. As Dr, Henry stated you have to expect new cases (possibly a lot of new cases; my comment not hers) as the province and the country opens up again. So if there is stuff you want to do now is a good time because there is a very real possibility of a new major outbreak in BC.

Tony
Tony
June 23, 2020 9:21 am

“What kind of heat map? Sales by region or over asks or…?”

Heat-map of the number of sold units (monthly) by region. It would be also good to see the same heat-map but normalized by the number of available units by region.

James Soper
James Soper
June 23, 2020 9:18 am

Right. Dr. Henry was asked about that case at yesterday’s briefing. As expected, she gave no details, but responded with a general statement that we should expect such cases as people are traveling into B.C. from other parts of Canada. I inferred from that it was community acquired and somehow related to travel, and not for example from a hospital or nursing home, but I could be wrong.

thanks.
There was the article about the scare w/ someone in Tsawout first nations who worked for Seaspan, was just curious if that was it.

edit: looks like it was
https://www.vicnews.com/news/positive-case-of-covid-19-reported-at-tsawout-first-nation-health-centre/

Patrick
Patrick
June 23, 2020 8:14 am

Not much to go on there though.

Right. Dr. Henry was asked about that case at yesterday’s briefing. As expected, she gave no details, but responded with a general statement that we should expect such cases as people are traveling into B.C. from other parts of Canada. I inferred from that it was community acquired and somehow related to travel, and not for example from a hospital or nursing home, but I could be wrong.

James Soper
James Soper
June 22, 2020 11:21 pm

2020-06-19 Vancouver Island F 40-49 Lab-diagnosed

Thx.
Not much to go on there though.

Ks112
Ks112
June 22, 2020 11:14 pm

I wonder if the yello will follow suit with the price drops on rentals

Patrick
Patrick
June 22, 2020 9:30 pm

So, just noticed, there was a case on the island on the 19th of June. Anyone have any info on that?

http://www.bccdc.ca/Health-Info-Site/Documents/BCCDC_COVID19_Dashboard_Case_Details.csv

2020-06-19 Vancouver Island F 40-49 Lab-diagnosed

James Soper
James Soper
June 22, 2020 8:48 pm

So, just noticed, there was a case on the island on the 19th of June. Anyone have any info on that?

Marko Juras
June 22, 2020 8:17 pm

Marko, $1385 is what I saw:

That’s without parking. My friends were offered $1,450 with a parking spot from the rental rep.

Introvert
Introvert
June 22, 2020 6:54 pm

The place on Osgoode that was listed for $699K (with no interior photos) sold for $670K, and it looks like there are major reno’s going on. Quick flip?

Ks112
Ks112
June 22, 2020 6:34 pm

Marko, $1385 is what I saw:
https://victoria.craigslist.org/apa/d/victoria-pet-friendly-one-bedrooms/7145883846.html

But then u still have ppl trying to rent out their 400 sqft place at the jukebox for 1600….

Marko Juras
June 22, 2020 6:19 pm

I do see rents dropping somewhat though, I believe the rent for a 1 bedroom at the Hudson mews is close to 1400 now.

$1,450….that is the best deal on rent I’ve seen too.

Ks112
Ks112
June 22, 2020 5:41 pm

Sorry Leo, I didn’t mean to speak for u there. I been looking at condos for potential deals and just can’t find any atm. Best one I seen was that penthouse at 1030 Yates which sold in a week for asking. Penthouse at dockside green has been asking at $1.19m for a long time now, not sure if that’s a deal or not but it does have a unique irrigated private rooftop terrace in addition to the wrap around balconies.

I do see rents dropping somewhat though, I believe the rent for a 1 bedroom at the Hudson mews is close to 1400 now.

Deb
Deb
June 22, 2020 5:26 pm

Would mean, 76 people took their listings off the market in week 2, and 106 people took it off the market in week 3?

And 99 people dropped their asking price!

bill green
bill green
June 22, 2020 5:04 pm

has the future reality of mortgage restrictions (July 1) pushed forward demand to buy before the new regulations take effect?
also, what is the REAL value of a renovated bungalow in Victoria?
US and Canada housing values were closely aligned for many decades, no longer the case.

Introvert
Introvert
June 22, 2020 4:23 pm

South Korea confirms second wave of infections
comment image

https://www.bbc.com/news/world-asia-53135626

Tony
Tony
June 22, 2020 3:55 pm

Great article Leo. I was wondering, can we have a heat-map of the number of sold SFH and condos?

alexandracdn
alexandracdn
June 22, 2020 3:31 pm

From all the years I have lived in the Victoria area, there was always what was referred to as living in “the core”. It has only been in the last few years that View Royal was said to be in the core. I think of it this way: If you live outside of the City of Victoria, you cannot access it unless you live or travel through , Saanich East, Saanich West , Oak Bay or Esquimalt. I have always thought of those five as the CORE. Why was View Royal added…..who knows

Ks112
Ks112
June 22, 2020 3:12 pm

The silver lining for the bears is that typically crashes occur when most aren’t expecting it. Now that even myself and Leo S are in the mentality that prices aren’t dropping, I wouldn’t be surprised if we get mini crash in the near future.

Garden Suitor
Garden Suitor
June 22, 2020 2:26 pm

Not really, core just increases in size. Saanich, Esquimalt, Oak bay weren’t part of the core at one point, now they are.

SFHs in current “the core” will likely demand more $$$ than whatever gets added to some future definition of the the core.

Barrister
Barrister
June 22, 2020 2:15 pm

Thanks for the great job with the numbers. One think I suspect, but certainly cannot prove, is that Covid has made SFH more appealing than condos. On the condo side, I am also wondering if downtown has lost a lot of its appeal.

James Soper
James Soper
June 22, 2020 1:44 pm

The decrease in inventory is not going to be good news for house hunters

So inventory decreased because 100 people took their listing off the market?

Differences between weeks 1 & 2 :

159 sales
324 new listings
+93 active listings

Difference between weeks 2 & 3
235 sales
311 new listings
-30 active listings

Would mean, 76 people took their listings off the market in week 2, and 106 people took it off the market in week 3?