Oct 19 Market Update
The sales to new list ratio is widely used along with months of inventory to measure market balance. Most definitions state that a sales to new list ratio of above 60% indicates a sellers market. Last week it was 115%. Granted this ratio always goes up in the fall when new listings dry up, but it’s clear that after spending much of the summer in similar balance to last year (both sales and new listings were higher but in equal amounts), the market is far more tilted towards sellers than this time last year.
Zooming out, we can see that the tightening trend started in mid 2019. However the for the last 12 months the sales/list ratio is at 64%, still substantially less than the peak in 2017 of 83%. That of course is an average of the current unnaturally high levels of activity with the COVID lows in the spring.
As crazy as the market is right now, it’s still concentrated on the detached side, and even there it’s not quite as bad as it was a few years ago when 45% of detached and 40% of condos went for over the asking price. Month to date, 25% of single family homes went for over ask, but only 8% of condos saw the same. In a truly slow market, we would expect less than 5% of properties to go over ask (there are always some due to intentional underpricing of listings).
It will be interesting to see what happens with these two sub-markets. In 2015 the detached market heated up first and eventually pulled the condo market up with it. You can visualize these markets as connected by rubber bands. When one goes up or down, it tugs on the other, so they can never get too far away from each other. As detached prices rise, the detached market will lose buyers that are priced out, reducing the upward pressure, and the comparatively cheaper townhouse and condo market will gain buyers. Of course at the same time employment uncertainty will drag on both, so I very much doubt we are in for a repeat of 2016 when we saw a nearly 40% price jump in 2 years.
Also the weekly numbers, courtesy of the VREB:
| October 2020 |
Oct
2019
|
||||
|---|---|---|---|---|---|
| Wk 1 | Wk 2 | Wk 3 | Wk 4 | ||
| Sales | 136 | 365 | 581 | 619 | |
| New Listings | 158 | 498 | 683 | 918 | |
| Active Listings | 2382 | 2392 | 2279 | 2643 | |
| Sales to New Listings | 86% | 73% | 85% | 67% | |
| Sales YoY Change | — | +93% | +82% | ||
| Months of Inventory | 4.3 | ||||
New listings in the last two weeks are up 30% for single family and 64% for condos from the same period last year, but it’s not enough to counteract the 85% increase in sales pace, so inventory is now dropping quite quickly. After spending most of the summer down less than 10% from last year, we are now down 16% on total inventory.
As for the condo sector, there is a lot of data coming out of Vancouver and Toronto with downtown condos starting to drop in price, but I don’t see it here yet. The market is much slower than detached for sure, but prices appear to be holding roughly stable. Detached sales in the last two weeks are up 100% over last year, so in comparison the 50% increase in condo sales is paltry (and lags the increase in new listings), but it’s enough to keep most of the inventory moving so far. However there is now an almost equal number of active condo and detached listings in Victoria, which is quite unusual. Normally there are about 50% more detached properties on the market. If you’re looking for a condo it’s time to start paying attention and finding those motivated sellers that keep their listings on past the end of the month.
New post: https://househuntvictoria.ca/2020/10/26/out-of-town-buyers-surge-in-victoria/
Assuming the rezoning is approved probably….gross on the two lots will be over $1.15 million and even if you factor in 250k +/- to register/service the lots still ahead.
1842 Feltham Rd, a.k.a. “The Junkyard”
The history, if I recall correctly:
https://www.saanich.ca/assets/Local~Government/Documents/ActiveApps/1842feltham20200922.pdf
https://www.saanich.ca/assets/Local~Government/Documents/ActiveApps/1842feltham20200922elev.pdf
https://www.saanich.ca/assets/Local~Government/Documents/ActiveApps/1842feltham20200922land.pdf
Do you suppose the seller will end up with a greater profit buy tearing down, subdividing, and selling two lots (if I understand that correctly)?
Not surprising given the last two months were best ever followed by worst months in history earlier this year.
Based on the numbers looks this morning looks like end of time month based on sales volume it is already the 3rd best year on record. Already more sales volume than all of 2018 and 2019 respectively, go figure.
The article is implying that the non-breadwinner spouse would be a resident and buy/own the property. The breadwinner would spend more than six months in the country of origin and be taxable there instead of Canada.
However, this could be done even without the 10-year visa, so not sure why the 10-year visa would change that.
If the breadwinner is earning most of/all their money outside of Canada, it makes sense that they would mainly be taxed there.
A bit of a wow out in the rental market in the The Big Suck…
https://toronto.ctvnews.ca/free-rent-until-2021-once-in-a-lifetime-rental-market-price-drop-leads-to-crazy-incentives-1.5159306
CBC projects NDP government elected.
NB and that area are still amazingly inexpensive. You can buy a modest duplex for example for $175,000.00. (Both units!)
Rent out one side of the duplex and live in the other.
I expect this next spring will see NB etc really explode.
A large seven bedroom (3 bedrooms in each unit, with a huge renovated loft) in a beautiful old, but solid duplex with sunrooms, large dining rooms, large living rooms, remodelled kitchens…..lovely condition units can be had for $300,000.00.
People in NB and area seem to be oblivious to what houses cost in the rest of Canada and the people from Ontario and Quebec are just starting to realize what is in their back yard. Amazing opportunities!
Definitely a place to invest.
You’re basing this on?
Student housing at UBC, which is run by Student Housing and Hospitality Services, works on a cost-neutral model. This means that rental revenues are meant to be roughly equal to the costs SHHS has to pay to provide housing. This includes both operating costs and capital costs – as every landlord with a long ownership window needs to account for both – but often only budget for operating costs.
How the pandemic ‘lit the fire’ of a red-hot real estate market inside the Atlantic bubble
Inventories have been halved, bringing Nova Scotia, Prince Edward Island and New Brunswick into a seller’s market
https://financialpost.com/real-estate/how-the-pandemic-lit-the-fire-of-a-red-hot-real-estate-market-inside-the-atlantic-bubble
If people actually realised the serious health ramifications of living near a major route, the housing market would collapse. Emissions are literally toxic.
The tragic part is that government is fully aware, and does nothing.
https://bc.ctvnews.ca/living-near-major-traffic-routes-increases-risk-of-dementia-and-other-conditions-ubc-study-1.4781403
Isn’t the spec tax done by self-declaration? In other words the honour system? In the wild wild west? It seems pretty well known that BC has pathetic record of enforcement so how many are taking their chances?
You could take a bigger step and give some land back.
You are on the land of:
Coast Salish
Á,LEṈENEȻ ȽTE (W̱SÁNEĆ)
Te’mexw Treaty Association
Lekwungen/Songhees
based on https://native-land.ca/
You’re basing this on?
Smallest room you can get at UBC costs 1337 a month.
The implications of this are unclear to me. Foreign buyers tax should mean that people on 10 year visas cannot buy a property without paying the 20% tax, and spec tax should ensure the satellite families are taxed heavily while here. So is this still a problem in BC?
https://vancouversun.com/opinion/columnists/douglas-todd-nine-million-people-have-scooped-up-canadas-10-year-visas-some-abuse-them
A big problem is that many conservative Christians see Genesis not as mythology but as God’s Literal Truth™, and they see presenting it as mythology as an attack on their beliefs. So their is no way of presenting it in schools which isn’t going to offend a large group of people.
Since they don’t have written texts, Indigenous spiritual traditions aren’t big on literalism nor do they see themselves as right and everyone else as wrong, as Introvert pointed out.
No, they make money by leasing out property for 99 years at market rates for development. Some of the units which are built get rented to students by their owners at market rates, but that’s not student housing per se.
UBC does have student housing of course, but it’s break even. They cannot make a profit at rental rates most students can afford.
A good suggestion.
Have a nice weekend, all.
You can move outside the urban containment boundary. I fully support restricting all densification to within it. One of the reasons I love towns in Bavaria is the strict boundaries from town to farmland and forest. No sprawl
Well, you’re right — my introversion does play into how I approach this.
Maybe there are more introverts per capita in Oak Bay, Broadmead, and the like.
Unlike Christianity, Indigenous ways of knowing aren’t part of a system of beliefs that has built into it a desire to convert other people to that system of beliefs.
That, and we stole their land and tried to kill their culture for a really long time, so I’m cool with my kids learning about their beliefs as a super small step towards reconciliation.
Tahsis would really suit an Introvert. No densification, no student parties either
And yes, plenty of room in the Munich development to plant some trees.
Change is inevitable in every neighbourhood. If you only allow single family homes that are only affordable to the top 10-20% of the wealthiest in society, then the homes in your neighbourhood will gradually be replaced by modern 3500+sqft monstrosities that maximize the space on the lot, cut down trees, and come with a very large carbon footprint.
Or you can allow gradual densification and retain ordinary families in the neighbourhood, support nearby amenities, less carbon footprint, and shared greenspace.
That would be an ok start if we did it, but we aren’t doing that either. And the current rental and condo stock is not suitable for families.
Cool. You know how to solve that problem right? Massively build student housing on campus and affordable supply just off it. Instead we neglected on campus housing (by making it nearly impossible for universities to build until just recently) while stopping rental construction, which pushed rentals into the secondary market.
And who exactly do you think will live in duplexes and townhouses if not families? Why are those families less desirable to you?
Fair point Sidekick and Marko. Seems like a reasonable alternative to offer those home owners
I lived in student rentals for years. They are for the most part all fine. It’s houses with parties every weekend that you don’t want to live next to.
Curious why not?
I’d rate them the same.
Nobody wants to live next to a student rental regardless of density. Having respectful neighbours is important whether it be single-family or some other form of housing. I suppose the higher the density the higher the chance of having a bad neighbour, but beyond that it seems like a loose correlation.
Barrister – what are your opinions on heritage conversions? Lots of those in Rockland.
No, I wouldn’t.
Would you say the same about first nations creation myths?
You probably own one of the rental party houses that I’m talking about, you bastard! 🙂
Lol introvert complaining about student parties. Nothing is stopping you from moving to a quieter part of GH.
I’m OK with Alberta’s moving the topic of residential schools out of K-4 as long as it’s still in the 5-12 curriculum. But I’m not OK with first graders learning “Bible verses as poetry,” as is proposed.
And if a change like that makes it into the draft curriculum, it doesn’t instill confidence that the best and brightest are working on this file.
Doesn’t everyone on this forum want a sfh?
UBC makes a mint off of this.
Harvard famously has every single undergrad actually live on campus (some of the harry potter food scenes actually take place in a Harvard student cafeteria). This would be an profit source, not a cost.
Nevermind.
Read the catholic christianity indoctrination crap. Wouldn’t want that either.
I just said in my last post that I wasn’t necessarily opposed to density along major routes. Build three-storey rentals and condos all along McKenzie between UVic and Shelbourne, if we must help UVic.
Or even better, maybe UVic could take responsibility for housing its own students. Universities love enrolling ever more students to make ever more $$$. But it’s less fun to have to build on-campus residences for students, maintain those residences, oversee the students’ welfare, hire more campus security, contract out more garbage and recycling disposal, administrate the whole thing, and deal with students’ after-hours shenanigans.
So exactly what the Alberta government is proposing currently, that you were so opposed to that you’d never move back there? Got it.
edit: Just to be clear I absolutely endorse the teaching about residential schools.
Is it though?
I feel like the recent notion that people won’t be able to afford to live in the city they work in is nuts.
Edmonton as a city has always been quite progressive.
It’s literally your (and people like you) opposition to denser building that pushes students into sfh. If there was more build up around the university, they wouldn’t be renting a house to begin with. They’d rent something closer & cheaper.
LeoS: I am often very respectful of your thoughts but I really think that you may have married yourself to an idea.
It would be more responsible to designate a few smaller areas for middling houses and see what the actual result is in Saanich. I appreciate that your ideas will certainly help to make the developers richer along with the real estate industry but is it really going to make life better for the people who now actually live in Saanich?. The real estate industry has never seen a piece of land that was not desperately in need of higher density. Sorry Leo, but when you start sounding exactly like the PR spin doctors for developers I really start to question your motivations.
Introvert – can you elaborate on why the densification is (or will) negatively impact you?
On one side of me I have a duplex which houses a family of 4 and a family of 5, and on the other side I have family of 2. So that’s 9 people/lot vs 2 people/lot. There is zero difference to me (other than 2 cars in the driveway versus one on the other). Interestingly, I’m far more affected by non-residents using the street for parking as I’m close-ish to an artery.
First, maybe the “missing middle” is missing for a reason: it isn’t that great.
Second. Sure, if we have to have population increases, let’s house the extra people in rentals and condos along major routes. But let’s leave single family neighbourhoods the way they are and not try to densify them further. The six-unrelated-persons bylaw is already densifying neighbourhoods like GH more than many residents want.
Believe it or not, lots of homeowners want single families as neighbours, as opposed to six UVic students with four cars, who have three loud drunken parties per semester, leave trash and recycling strewn on the driveway, mow their field of weeds once a year, and then steal the public road sign for a souvenir at the end of the lease.
I really like a lot of facets of GH, but its creeping densification isn’t one of them. The pluses still outweigh the minuses by a good margin, so we’ll more than likely stay put until the kids are grown. But the idea of someday retiring to Oak Bay or Broadmead or Cadboro Bay or Cordova Bay — places where increased density will visit last, or never — is pretty appealing.
Never said that.
Exactly. And since “a roof over your head that is not a single family house” is illegal to build in the vast majority of Saanich, then the solution is obvious. Allow missing middle housing by right in all single family neighbourhoods, and pre-zone some sensible areas for higher density. Along major routes, around parks and amenities, etc.
Both new listings and sales falling pretty quickly now. Looks like we will have a more normal fall market. But increase in sales still outpaced increase in new listings quite a bit in the last 2 months.
My kids know way more about this than I do, which is both sad and amazing. I think this is the right path forward.
That would be a step in the right direction. Everything is signed off by a P.Eng these days, why not let the homeowner decide to
(a) Hook up to city services
(b) Deal with it on-site
You know the CRD is/was pushing all this: https://www.crd.bc.ca/education/green-stormwater-infrastructure
I would have loved to install rainwater harvesting to provide for irrigation. But I could only afford to pay for either city hookup, or on-site management – not both. Even if you build the infrastructure to deal with rainwater on-site you still have to hook up to the city. My property was never previously hooked up to storm and no issues….ever. Now my entirely above grade house / property funnels rainwater straight to the ocean. Wonder if the trees will mind…
Composting toilets with on-site septic field? Doesn’t matter, still have to hook up to the city.
In addition to Marko’s point about ‘affordable’ housing, the same thing is happening with the ‘greening’ of city. One government branch is promoting some great stuff while another is pulling the ‘yeah….no’.
And just to hammer my point home, here’s one Marko can file into the ‘idiotic’ category.
Waterfront house in oak bay on a steep rocky lot. Due to renovations, city required rainwater which naturally flowed down the rocks and into the ocean to be collected, pumped up 40 meters to the street to connect to the storm drain, where it would then flow under the street and outflow into the same bay 50 meters along the shore from the property. Hmmmmmmm.
The recent notion that everybody should be able to live everywhere at low cost is nuts.
A detached single family house in Saanich isn’t a right. A roof over your head in Saanich (or any municipality) perhaps should be a right, but not a single family house. That makes no sense.
Not exactly on topic but the last couple of days of Covid numbers in BC are concerning. The real litmus test is the hospital numbers and death rates over the next month. Hopefully my concern is misplaced.
On orange shirt day our kids’ school seems to focus on this. This year my grade 2 year old was asking questions about it. It might just be their school focussing on it this year though. They had a map of Canada in the gym this year showing First Nation tribes and had discussions around residential schools as they toured the map.
I think it is good that kids are made aware of this even though it was quite impactful for my 6 year old (who loves school so far) to learn that school can be a negative experience for others.
Simple imo. Have the owners hire a p.eng to design a rain garden with overflow into a rock pit. Force owners to connect when the city eventually installs storm.
Holding them hostage when none of the existing homes on the street are hooked up to storm is ridiculous.
By the way Edmonton is a leader in this area. They got rid of single family zoning and abolished parking minimums. Who knew they were so progressive.
Yes. The whole concept of an urban containment boundary in which the only legal housing in most of it is suburban sprawl is ironic beyond belief. Huge equity issue as well when housing for anyone but the top 20% is illegal on the vast majority of land in Saanich.
This is my number one push in the housing task force. Widespread support for that, but whether council has the political courage for it remains to be seen.
In K-4, students learn cultural and social awareness including exploring self-identity, acknowledging cultural differences, and honouring Indigenous traditions.
First explicit mentioning of residential schools is in Grade 5 social studies, when students learn about past discriminatory government policies and actions including the head tax, Komagata Maru, internments, and residential schools — plus some other stuff.
Six unrelated persons can now legally occupy a house in Saanich, but you want to get rid of single family zoning on top of that?
Gordon Head is already dense AF. I wish there were more “single families” living here.
Housing is expensive because people think they can make a lot of money owning it. Not that it will ever happen, but if the government taxed capital gains on housing at 100% (including principal residences) prices would drop like a rock. One government did take a tiny step in that direction, temporarily, decades ago.
Ontario tried a speculation tax on property, and the market ‘collapsed overnight’
I hear ya, but what exactly do you want the city to do here? Not hook people up to city services? Debatable whether developers or city should cover this, but seems sensible to have a hookup. Same with the asbestos pipe, I don’t see the problem. The thing needs to get upgraded at some point and whether the taxpayers should absorb the cost or the developer is certainly not clear cut.
Single family detached homes, especially brand new ones, are for the wealthy. The reason for that is demand for a limited quantity of detached housing. If the city was fast and did everything for free that would still be true and the city subsidizing new single family builds that do nothing to add more homes isn’t going to help with affordability.
For sure the city should focus on driving down costs and expediting the process for anything that adds density. Mass upzoning along transportation corridors, parks, and the waterfront, and getting rid of single family zoning would be a start.
The owner-builder exam fiasco never gets laid to rest 🙂 I long ago decided never to build new after reviewing the requirements and costs and my skill set.
Real life. I am purchasing 1 or 2 properties per year for development and with so many municipalities and constant policy changes you constantly get screwed over. It is a risk every time.
Where do I start….I have a ton of examples just on storm water management alone (the issue in the article).
i/ Bought duplex lot with storm approx. 100 meters away (similar situation to these people). Told by municipality it would be pulled within a year at their costs. Two years later we couldn’t wait anymore and ended up having to pull it at a cost of $56k, municipality agreed to chip in $20k leaving us with a $36k bill.
ii/ Built brand new home in Fairfield. Went to hook up to the storm and city side of system was asbestos pipe and once again ended up in a negotiation on how to deal with it. How am I suppose to know/sort this out before buying the property to build? You can’t know until it is excavated. You would think the city would deal with their end of the system….think again.
iii/ The storm management (rain gardens) etc., are all over the ****ing place. Had to build a huge one on San Juan in Gordon Head, then a totally different one in Colwood, then built a house down the road in Colwood and it didn’t require one at all for some reason. There is zero consistency (even for equivalent soil conditions).
As much due diligence you try to do every municipality always comes up with new **** that has to be different from the other 10 municipalities.
Everything the province and municipalities do make housing ridiculously expensive. Add in taxes (GST, tax on profit, etc.). Basically new SFHs are for the rich which I am fine with, just annoyed that everyone is talking about “affordable housing” non-stop and putting in policies that promote the exact opposite, non-affordable housing. Owner-builder exam takes the cake for 110% useless policy driving up unaffordability.
Just spent a month on a project in the city of victoria getting approval to go from a basement to a 3′ crawl space with ZERO changes above grade on an approved DP. Fun times.
4 times as many sales over $2M as the same period last year (June-Oct, and Oct 2020 isn’t even over yet)
Curious. Anyone know if they actually teach anything about residential schools in BC before gr.4?
My kid is in gr.3 and I certainly haven’t seen nor heard anything about that.
Leo is that 4 sales more than last year or four times the number of sales over last year for over the 2 mil.
Since June, sales are only up 4x from last year above $2M. No biggie.
And wouldn’t the pre-purchase home inspection have revealed the cracked foundation?
I don’t know that much about houses, but a cracked foundation sounds like kind of a big deal.
“I have been sort of following the over 2 million mark and I have noticed two things, sales numbers seem really high and the types of properties selling for over two million are also surprising. A small new build on a small lot in Oak Bay is bring in over two. If you are a local buyer you might be starting to feel rather screwed.”
‘
‘
‘
This is nothing new, in my area of Fairfield about 4 new homes on smallish lots sold for 2MM and over back in 2017, I couldn’t see the value but it was interesting to note that at least 3 of those homes were sold to out of town buyers who in my experience tend to over pay for those types of homes as they may not be as familiar as locals on value for dollars, or they sold high elsewhere and everything hear looks cheap. Perahps they are actually the ones getting screwed? Anyways those homes most recent assessed values are under what they paid for them and will mostly likely appreciate at a lower rate as new home shine wears off.
Regarding number of homes sold over 2MM this should be a surprise as lower end of the market seems to allowing people to move up, what I find interesting is that the 2MM homes and over seem to be appreciating a substantially lower rate then the 1 1.5MM range, perhaps this is due to less foreign buyer and Vancouver market weaker
Bad situation for those Saanich owners. Doesn’t really add up to me though. They bought their “dream home” but then immediately knocked it down because of a cracked foundation? And they or their builder didn’t check city requirements to build new before doing so? Wouldn’t you normally get this sorted out before clearing the house?
https://www.cheknews.ca/districts-demand-for-storm-drain-connection-would-cost-300k-and-bankrupt-us-saanich-homeowners-say-711924/
You might be wrong.
Apparently they are shutting down the Starbucks in China town as well – looks like 200 stores across Canada is the plan – https://www.ctvnews.ca/business/starbucks-plans-to-close-up-to-200-canadian-locations-over-two-years-1.4977752. Some may be ‘repositioned’ to drive thru locations but others are just being closed.
https://financialpost.com/news/economy/canada-is-having-a-much-better-crisis-than-the-u-s-though-some-fret-about-debt-and-deficits
I have been sort of following the over 2 million mark and I have noticed two things, sales numbers seem really high and the types of properties selling for over two million are also surprising. A small new build on a small lot in Oak Bay is bring in over two.
If you are a local buyer you might be starting to feel rather screwed.
On a separate note, if they ever finish my renovations, I am looking forward to moving to a small quiet backwater.
It’s not foreign buyers though. Those remain low.
Big uptick in out of town buyers now confirmed in Q3 data. Increases from lower mainland, elsewhere in BC off the island, and Alberta. Also some more US buyers (moving from US, not necessarily US citizens)
https://twitter.com/gavindew/status/1319088875105497089
As long as the Liberals are in power, the CEWS and new EI program will continue until the public health emergency is over.
There is no spending threshold above which Trudeau will abruptly change course, commence an austerity plan, and remove the crucial supports that so many Canadians need during COVID.
And in my view, this is how it should be.
Lots of professional services firms are being supported by the CEWS. I shudder to think what will happen to them once that ends. And obviously to their suppliers and employees.
I’ll pull some data on this. There are certainly companies with professional employees being supported by CEWS.
Barrister- Time to change countries.
Leo, maybe I am wrong but I don’t think there are any companies with “Professional Jobs” in Victoria that are on wage subsidy. Maybe BC Ferries? By professional jobs I am referring to jobs that pay around $70-$80k/year or more as those are the people/couples that will be buying houses here.
Don’t worry Frank the government will just drain any savings you might have. The Feds can print until your savings accounts purchasing power is cut in half. Government is less likely to shrink than it is simply to tax more. Sorry it is the grim reality of how governments function.
I don’t think many people will be anxious to open any business after this debacle. Being self employed most of my life I always worried about illness preventing me from earning a living but I never dreamt that the government could force me to close my doors and toss me a few crumbs. Everyone will be looking for those government jobs that somehow had the money to pay everyone their full salaries. They live in a dream world, wait until they see the shortfall in tax revenue that is coming. Then government will have to shrink and that’s fine by me.
Move our young family back to Calgary? We’ve never seriously entertained the idea, but those curriculum changes, if implemented, are an instant deal-breaker.
If Jason Kenney keeps this up, it may not be only economic factors driving an Alberta exodus.
Sorry, bit off-topic, but remember the Alberta-brain-drain article I posted yesterday? And today we learn this…
Education experts slam leaked Alberta curriculum proposals
https://www.cbc.ca/news/canada/edmonton/education-experts-slam-leaked-alberta-curriculum-proposals-1.5766570
Mostly tourism/restaurants as you say ks112. Camosun and UVic have laid off a few dozen each in continuing education and a few other areas. Hard to say exactly how many professional jobs are at risk because companies are getting the wage subsidy. Will someone getting a 75% wage subsidy be employed when that wage subsidy disappears? So far so good though.
Has there been any layoffs of “professional jobs” in Victoria? From what I know there isn’t even a salary freeze at any of the public sector employers. Seems like just retail, tourism, restaurants and commercial real estate taking the hit.
I agree Leo that it is a hard time for many small business owners and at best it will be a couple of years before we see any major recouvery here.
One has to wonder what, if any, long term permanent changes might occur. WFH seems the most obvious but one has to consider that there might be other long terms changes especially in spending patterns. Now where did I put that crystal ball.
Most definitely more closures than usual. So sad for the owners.
It’s going to be a great time to open a restaurant at the end of this though.
Might be imaginary but there seems to be less coffee shops and restaurants in Victoria. I know that restaurants regularly close but are the total numbers actually getting less?
Well it’s not closing for lack of business, I can tell you that. It’s almost a law that you have to have a Starbucks beverage in hand when strolling the environs of Gyro Park and beach. This is a real puzzler.
Cadboro Bay Starbucks location to close permanently after 16 years
https://www.saanichnews.com/business/cadboro-bay-starbucks-location-to-close-permanently-after-16-years/
+1 and couple it with the fact that most renovations are done without permits.
When I am personally looking for property I never ever look at the BC assessment. I get enough phone calls from BC Assessments questioning me about fair market sales I’ve been involved in that I have zero faith in their ability to correctly assess an individual property. A few times I’ve actually become frustrated with the individual on the other end for not understanding super basic market value concepts like lot size!
Last year I had to fill out a bunch of forms on lots (3 months on market) we purchased from a developer as BC assessments thought it was below market and “not arms length”….what a non-sense process that was. Trying to explain why the lots were the price they were to someone who knows nothing about real estate or construction. Fun times. It’s like trying to explain to someone who has zero medical background at the ministry of health how things are actually done at the hospital level. Would you trust the ministry of health person on a individual clinical setting opinion? Sure they can give you some population numbers or something but anything beyond that good luck.
As Leo said great for big picture but having dealt with BC assessments many times over the years personally I don’t even look at it let alone put any faith in it.
For clients, of course I look at it as people ask about that number literally at every showing 🙂
Heard on the radio about this website that helps connect people to family doctors accepting new patients:
https://www.findadoctorbc.ca/
That is if they can ever sell their overpriced, oversized homes.
https://www.cbc.ca/news/canada/calgary/covid19-housing-prices-decline-calgary-cmhc-1.5625344
Alberta could be looking at a massive brain drain
https://www.cbc.ca/news/canada/calgary/road-ahead-alberta-brain-drain-max-fawcett-1.5765149
Annie, assessed values are not reflective of improvements that require no permits, so an owner could have invested $100k on flooring, kitchen cabinets, counters, etc and it would raise the market value but not show in the assessment. They use a broad formula to calculate the assessed value for taxation purposes. I would not put any faith in it for pricing market value.
Annie, while very unscientific I found it is mostly a matter of touring a number of houses in your area and then trying to track what they actually sell for. SFD are very individual as are neighbourhoods but you can get a good feel for it pretty quick.
Thank you so much for your response, Leo! It’s very helpful to see the graph and know that the median is currently 13% over assessed. Any insight is valuable considering it’s such an unpredictable time right now being a first-time buyer and not knowing what the years ahead (especially the affects of covid) will bring!!
Some items from a Vancouver Sun article
https://vancouversun.com/business/real-estate/prices-are-going-up-again-what-does-this-mean-for-the-future-of-vancouvers-housing-market
It will be interesting to see what happens in the condo market here as the inventory disparity between condo and SFD seems to be an anomaly. Separately, we keep hearing about about how the Spring market moved to the summer and fall this year, however, I wonder if the low interest rates and fervor to get a SFD pulled next year’s market into the current market and if that may impact demand this upcoming Spring? People may have advanced their purchase plans with interest rates and fear of further price escalations and that might (anecdotally) impact next year’s demand. I know quite a few folks that refinanced early this year and knocked years off their mortgages and hundreds of $$$ off their monthlies instead of waiting for their mortgage maturity and just paid the penalty. Again, more of the pandemic dynamics introducing so many variables right now.
Hi Annie. Assessed values are often all over the place on individual properties, but I find as a whole (say if you take the median) it is a pretty good reflection of market value (considering it is market value as of July 2019). Right now most places will sell for over assessed value because prices are up from that point.
As for whether I would be nervous about buying a place for 25% over assessed, not really, but it is higher than the median (13% over assessment) so I would take a careful look at whether the assessment was either too low or the listing is overpriced by comparing it to similar places that have recently sold. Also if it was previously under-assessed and now sells for much higher, then expect your assessment to rise more than the average and your taxes to go up somewhat.
See recent sales distribution below.
Hey Leo, thanks for your informative posts! Curious what your thoughts are regarding listing price compared to assessed price? It looks like some detached homes are listed below assessed with hopes that many buyers will offer way above. Other detached homes are listed way above assessed value hoping they will find that one buyer who will bite. I guess my question is whether you thing it is risky to buy far above (e.g. 25% above) assessed value right now? I supposed this also depends on renovations and/or other factors… thanks!!