Do bidding wars work?
Bidding wars are endemic in the market these days. There’s always some percentage of homes that go over the asking price (in a slow market it’s about 5%) but recently more than half of houses and townhouses have gone over ask, and a third of condos have done the same.
Of course just because a place sold for over the asking price doesn’t necessarily mean it was a bidding war, but it’s a pretty good proxy. Note the above chart defines “over ask” as 1% or more over the asking price to filter out those properties where the price was just rounded up by a few hundred dollars.
Before we can really discuss bidding wars, we have to distinguish between the accidental ones and those that are engineered.
Accidental bidding wars are due to seller mispricing. That happens when the market has heated up faster than seller expectations, with the list price ending up under market and thus attracting multiple bids. Accidental bidding wars are most common when the market starts to heat up and takes sellers by surprise.
The other kind of bidding war is the engineered kind. That is when the seller deliberately underprices their property, and asks for all bids to be submitted on a certain day and time. These are the kinds of bidding wars most common in today’s market, and a typical strategy is to list on Thursday, with offers accepted on Monday.
Because the practice is so common, it raises the question of whether it works. If a house is worth $1M, is it better to list it at $850,000 and wait for a flood of offers, or is it better to list at a million? Let’s take a look.
Sellers and the industry believe bidding wars work
Far from being unique to Victoria, the tendency for sellers to switch to an auction model during hot markets has been documented in research. That alone would indicate that even though there don’t seem to be any specific studies indicating the strategy yields higher selling prices, sellers and the real estate industry believes that the auction model leads to better results, at least in hot markets.
Little downside for sellers
There is always a chance that an engineered bidding war doesn’t work out, and sellers don’t end up with any offers or not the offers they want on the day. There have been instances of that happening even in this market, and I expect to see more of it as buyer fatigue mounts. However that doesn’t represent an actual risk to sellers, because they are not obligated to accept any given offer, even if it is at or above their list price. Putting your house up for sale is an invitation to treat, or an expression of a willingness to negotiate on a sale, but not a commitment to do so.
Although the standard listing contract contains language that the seller will accept offers at or over list price, these clauses are almost always struck from the contract. If the engineered bidding war fails, the property can usually remain listed or be re-listed at a higher price.
Higher prices in general, and small chance of a jackpot
Before we even start talking about sales prices, it’s important to note that one of the near-certain outcomes of an engineered bidding war is a quick sale. Instead of weeks of showings and disruption, sellers can essentially cram the whole selling process into one week which is worth something. Even if price outcomes were the same, an engineered bidding war may be preferential for sellers.
To examine the evidence for differential prices, I looked at single family sales from mid March to mid April. That’s 487 sales, of which I analyzed sales in the mass market that were assessed at between $500,000 and $1.2M (418) to remove the impact of luxury sales that have less reliable assessments and sales prices.
In those sales, the properties that sold above ask went for an average of 35% over assessed, while those that went for at or under ask went for 29% over. That difference was found to be statistically significant (p=0.00028).
The effect holds if we group by assessed value and by number of bedrooms as well, with the properties going in bidding wars consistently selling for higher than those listed at closer to true market value.
The relationship also holds if we compare price per square foot instead of sales to assessment, with properties going over ask selling for 5% more per square foot than those that didn’t. Although not clearly evident in the stats, individual sales also show that occasionally sellers hit the jackpot, with a buyer caught up in the moment submitting an irrationally high bid for their property.
One might argue that the difference in overall selling prices might be explained by something other than listing strategies. For example properties priced for bidding wars could be in overall better condition which could account for the difference. I don’t see any great evidence for systematic differences in listing strategies based on property condition but it’s a possibility.
Overall the evidence seems to show that the auction strategy is a sensible one for sellers in hot markets. However for a bidding war to be successful, there must be enough buyers out there interested in making a bid. The same strategy may not work in slower markets.
Bidding wars are bad for buyers
Even before determining whether bidding wars work to secure a higher price, it was clear they are terrible for buyers. The home buying process is stressful enough without them, and when you have 4 days to decide not only whether to spend a million dollars but also how many tens or hundreds of thousands over ask you should go, that pushes stress through the roof.
Bidding wars also increase the pressure to submit risky unconditional offers, provide little time for due diligence, are inefficient with multiple pre-inspections on the same property by buyers who won’t win it, and increases the risk of paying over the market value. It seems buyers pay higher prices in general, and occasionally the blind bidding process causes a buyer to pay way over the next closest bid. That’s like setting thousands of dollars on fire immediately.
This may be a good area for future regulation, whether it is to increase transparency in the bidding process, or to have a mandatory cooling off period for unconditional offers. Bidding wars are a symptom of market conditions, not a cause, but they are a particularly dangerous one for buyers.
Also the weekly numbers courtesy of the VREB:
| April 2021 |
Apr
2020
|
||||
|---|---|---|---|---|---|
| Wk 1 | Wk 2 | Wk 3 | Wk 4 | ||
| Sales | 111 | 327 | 598 | 287 | |
| New Listings | 176 | 499 | 853 | 667 | |
| Active Listings | 1357 | 1416 | 1449 | 2305 | |
| Sales to New Listings | 63% | 65% | 70% | 43% | |
| Sales YoY Change | +208% | +343% | +318% | ||
| Months of Inventory | 8.0 | ||||
No great change last week in the market, with sales running about 60% above the 2019 pace, while listings are relatively normal and inventory remains at 37% below last year’s levels. It seems the sky-high prices may be prompting some investors to cash out, but so far sales are still easily outpacing supply. Note the increase in the chart below is from the long weekend moving out of the averaging window.
Today is budget day, and I’ve been saying for some time that while I expect the government to do something on housing, I have very low hopes that it will be anything useful. Now some leaks indicate that the government is planning a vacancy tax for foreign owners starting in 2022. We’ve already got one of those here in BC, and adding a second is very unlikely to move the needle. That’s not really surprising in a year where they would like home owners to vote them in to a majority government.
It seems outside of the tweaked stress test which isn’t likely to do much, this market will be left to run its course. Perhaps it’s better that way. The only way this thing stops is when consumer sentiment turns.
Probably something property specific or a non-market value transfer. March 1980 was still in the early stage of the price runup, so demand should not have been an issue
Note, this isn’t the most recent article, so you probably won’t get many responses posting here!
I’m still wondering what affected the 1980 sale of a solid brick house, Ballarat Central area.
That is – regional Victoria. How did the value drop $24 000?
1975 April Sold $26 800
1978 May Sold $44 000
1980 March Sold $20 000
Was there a divorce settlement and someone paid someone cash?
Is this a question for a Sociologist or for HHV?
New post: https://househuntvictoria.ca/2021/04/26/the-death-of-family-affordable-housing/
Doesn’t look like it. Nothing in the notes yet.
Has 3533 Ryder Hesjedal Way sold?
It makes complete sense when you realize they pay more in taxes, except when the CRA catches them off shoring their earnings through a KPMG scheme, in which case they actually have to pay them. No interest or penalties or anything. Just what is owed.
I was told that internet is coming to Switzerland any day now so I will be able to read your posts.
“Dad: This is your chance to buy a house cheap and move in next door. Let us know how that works out.”
I’d love to, but won’t you be moving to Switzerland very soon?
Monday.
879 sales
1201 new lists
1458 active (-37%)
New post later today.
Dad: This is your chance to buy a house cheap and move in next door. Let us know how that works out.
March 2021 listings across Canada were at an all-time high (seasonally adjusted). No dent made to average prices, which are up an incredible 31% YOY in Canada. The expected tweak to the stress test doesn’t even happen until June, so if anything that should increase April/May demand from people wanting to qualify under the old stress test.
In short, the party’s still “on.”
https://www.cbc.ca/news/business/crea-housing-march-1.5988543
“But economist Doug Porter at BMO says March’s numbers show there’s a lot more going on. Seasonally adjusted, the number of new listings hit their highest level on record in March, he notes.
“Please keep that simple fact in mind when you hear the inevitable onslaught of rhetoric about how the housing market’s imbalance is all about weak supply,” Porter said. “The only possible world in which supply can be considered anything remotely in shortage is when stacked up against the extraterrestrial level of demand. “
$1.88M
“The people moving from campsites to shelters into this housing aren’t exactly the cream of the crop and there is no support services nearby.”
Well they probably aren’t doctors and lawyers.
I guess I understand the concern, but then living in an urban neighborhood probably isn’t the best choice if you can’t handle people from all walks living near you. Move to the West Hills if you want vanilla.
The security costs on condo development as of late have been out of control the past two years with the constant theft , drug and other criminal activity on site even at the occupancy stage. SO it does not surprise me that crime and drugs seem to be a key concern with the citizens in that area. The people moving from campsites to shelters into this housing aren’t exactly the cream of the crop and there is no support services nearby. When more and more parks downtown have “safe sweep” signs overloading a residential area isn’t exactly going to have a positive impact on the community. BC housing has admitted that residents will be in various phases of substance abuse and have criminal history of assault. Perhaps the young parents are concerned having kids and an elementary school a block away?
Leo,
What did 5556 Old West Saanich go for? Thanks!
“Actually is it not a shelter but residential housing which is not transient? It might be fewer units as well.“
It is not a shelter. It’s supportive housing intended for people transitioning out of the shelter system as I understand it. Not sure what all the hysteria is about.
Yes I have but no comment.
Marko have you been into 4533 rithetwood?
Surprised it’s not sold.
Mind you, if I could get myself into one of these exempt areas, I’d be all for them!
For home insurance try square one, everything is done online and they were almost half the price of the traditional insurance, I spoke with our firms in house insurance specialist that they gave it their thumbs up. We have higher deductible (2K) and replacement building cost of 1.4MM plus earth quake insurance for around $1,600/year.
I can’t help woundering how much of this concern about the shelter is unwarranted. Actually is it not a shelter but residential housing which is not transient? It might be fewer units as well. . . It matters but how has it turned out in other residential neighbourhoods where of a similar size?
Putting homeless housing in a residential neighborhood a block from an elementary school was a strange idea. I think somewhere near more support services or industrial area would have been more appropriate. I feel bad for the people taking a material hit on their property trying to sell it right now. Seems every house around the proposed Catherine st shelter is for sale.
It’s funny because it’s true.
But if we can be serious for a moment, it does bug me that certain areas are politically and functionally “off-limits” to changes in zoning and densification, and are seemingly exempt from shouldering any burden with respect to addressing wider community and social issues.
From: https://www.cbc.ca/amp/1.5994103
Affordable family housing whether buying it or renting it is a big challenge.
Another plug for Western Coast. My parents has always went with Megson FitzPatrick, and I bank with TD. However, they can’t beat Western Coast, and TD is 36% higher when I priced it.
I have always used TD as well. Happy with them.
Thanks GC! WIll call
Western coast, prices have always been good (lowest again last year when I shopped around), great coverage on expensive bicycles, discount if you have auto insurance with them and they call you and process renewal. Claims process had always been good too.
Thank you Leo
Always been happy with TD Meloche Monnex and was the cheapest when I shopped around at the time. Never made a claim though so no idea how they are to deal with for that
Should have stuck it in the uplands marko, would have impacted fewer people.
Quick question here:
We bought a house and was wondering if anyone recommends any good reputable insurance companies that don’t break the back 🙂 to insure the house?
Appreciate any help, thanks.
https://www.timescolonist.com/news/local/neighbours-celebrate-after-langford-caps-towers-at-six-storeys-1.24310761
IMO this was a bad decision by council.; they should have approved the two 12 storeys. Although the neighbors complained about the traffic, the transportation report that was done said that the amount of traffic going through Fairway would have been perfectly adequate and the roads would have had improvements. Now the city wants incoming and outcoming traffic going on to a busy road like Goldstream. Politics and appealing to a small minority people does not lead to good decision making. Also, who buys right in the city center of Langford and doesn’t believe that more densification would come? Too bad, a lot more people would have had housing
There are definitively better smaller more boutique moving companies, but you also pay for it.
Yeah, you’d hope that Movers went to grad school or had a red seal with courses in fragile furniture management and wall protection 201. But, alas, no! It seems like some of them have wayy too much confidence and really there’s not much you can do if they break something. I wounder what makes 2 Burley Men a little more dependable than some of the other larger companies? It might be worth a small company to deal with heavy stuff only.
thanks Big Time Alexandracdn! I really appreciate that! I had been looking for so long with so little on the market and prices not going down but up I feel so grateful now it worked out. Now I just hope Gordon Head does a little work to expand the sidewalk on that road. 🙂
thanks for the recommendation to check out Two Burley Men. . . I’ll definitely pack up all the valuables and let them transport the furniture and heavy stuff.
Incidentally, when moving to Victoria (am from here but moved away and back) and movers packed and unpacked my Uhaul a relatively new VCR of was replaced in its box with an ancient broken one of the same weight…hmmm…how did that happen? Among other things. I’m sure many people have the same stories.
The tax rate for farm land is not that much less than rural residential in many areas on the island because land values are so low – only in the Greater Victoria area would it be a substantial I believe. The difference for us is only $500/year, which is not a motive to farm.
I’m in support of equestrian facilities. I don’t ride, but horses need space, they are considered farm animals, and therapeutic riding is a real thing. My best friend owns a therapeutic riding horse and many autistic and disabled folks benefit from this. I support the other permitted agricultural activities as well.
The real issue for me is that about 75 per cent of smaller lots — in the range of two hectares (five acres) — in the ALR near Vancouver are not farmed at all. Only half of ALR land near Vancouver of any size is actively farmed, roughly 34,147 hectares (85,000 acres).
This is where the policy change is needed. If you are not actively farming or retired from farming you should pay a higher rate than municipal for property taxes in my opinion. Paying full property taxes is not enough of an incentive to actually farm in these areas and I think you should have to actually produce 10,000 in sales per year or more on all size lots, not just those under two acres. Right now it is only $2500 for larger “farms” which you can make leasing a pasture for a few cows.
Good points Totoro.
One thing people might not understand about a therapeutic community is that it is the “community” that does the healing. It’s a very simple model and it has been proven to have a high success rate because it works extremely well.
All the people living on the farm at Woodwynn were working the land every day. There was basically no charge. You could be totally broke and still attend the farm. The participants worked the land, growing their own food and they learned new confidence and respect for themselves and each other.
The program had a zero tolerance for drugs. Anyone who broke that rules were off the farm immediately.
This is the “exact opposite” of what our governments are doing and it is why every dollar they are spending right now is a complete waste of money.
Having said that, In my opinion, Woodwynn should never have chosen ALR land in the first place. They should have chosen somewhere else because the ALC and the ALR clearly are not going to work with anyone who wants to farm in a creative way even when it is proven that you can actually make the land more productive by having more people live on the land farming.
It is now back in the good hands of the Tsartlip, first nations people and there is a beauty in that.
I’ve used 2 Burley Men five times. Three times it was okay, once they shattered the glass on my dining table (but they did pay for a replacement) inside an elevator and the other time they lost a custom cushion for a seat. I still recommend 2 Burley Men based on value, but it is a massive company, and it really depends on who you get that day in terms of a crew. Sometimes the crew has enough common sense to lift sharp objects straight up off your hardwood floor and sometimes they have zero common sense, and they will pivot sharp have objects on your hardwood floors.
There are definitively better smaller more boutique moving companies, but you also pay for it.
Interesting idea and way to increase housing and farming 🙂
I agree with Maggie. Move all your valuables by yourself if you can. I have heard good things about Burley Men as well. It is a plus if they don’t smoke and don’t have a cell phone!!
Hey congratulations Obsession!! Beautiful home. You couldn’t ask for anything more. It has everything and on a pretty street. Enjoy. Wow, you got it for under asking….what a guy!!
Congratulations! We’ve had good luck with 2 Burley Men Movers. They’ve moved us two times, with no problems. But regardless of the mover, you should transport your own valuables when possible.
Just bought 4146 Cedar Hill
Can anyone recommend movers who don’t steal stuff, don’t break stuff, and who are reliable and all?
It’s not that the ALC is bad, it’s that the laws are bad. Wanna run a restaurant on ALR land? Nope, sorry, have to open a brewery first. But oh wait, are you meeting the 50% threshold? No? No brewery for you then. Shut it down. Pizza night every Tuesday during the summer? Not even close to being farmy enough. Craft beer festival? Hell no, not happening.
But if you wanna rip around on a horse whacking a ball around with a stick while wearing a silly hat, that’s cool. Farm use!
I’d just like to make it clear that small farms in BC can be really productive if you use greenhouses or hoop houses. It is about the high land costs primarily now in areas next to urban centers. If we make farming mandatory and increase penalties for not farming that might really be helpful – plus provide incentives for environmental benefits.
For example, Jane Squier’s farm on Saltspring that was a profitable lettuce farm that provided a full-time income before transitioning to citrus in retirement: https://www.thegardensaltspring.com/about-the-garden and Bob and Verna Duncan’s Fruit Trees and More in North Saanich. https://www.fruittreesandmore.com/
For those that are interested, one of the best examples I have seen of productive small farms is in Normandy . The farm was studied by the French government over five years as they wanted to understand how much you could make on 1/4 acre using biointensive permaculture techniques. The results were that a single farmer, using these techniques and no machinery except hand tools on one quarter acre, could generate approximately $84,000 dollars gross sales per year. The take-home profit after all expenses amounted to about $29,000 dollars (CAD) or $23,000 (US) per year including payments on the land as an expense deduction (so accommodation included).
This outcome would require about 43 hours of work per week (30 hours on site, and 13 hours on administration) with four weeks of vacation per year. Definitely not a living wage usually, but a lifestyle that could be supported with a partner and one which includes housing for the owners and any workers. And also only 1/4 acre and increasing to half an acre makes it more doing without a doubling of effort. And, in my case, not keeping animals really reduces time spent.
https://www.fermedubec.com/la-ferme/
And now back to the crazy high prices in Victoria.
It’s reminiscent of the house on Fleet St (and McKenzie Ave) with a mud pit for a backyard that sold for a million during the 2016-17 run-up.
Eyebrow-raising stuff.
I don’t know Deryk. At Woodwyn the problem was, as I understand, that you had a “therapeutic recovery centre” with full-time residents planned. I support this idea, the but regs really don’t. Any housing on site has to be farm related ie. you can have housing for farm workers but not for those addicted to drugs and seeking therapeutic treatment. I looked into this myself as I’d love to have a ecotherapy centre that provided nature therapy and farm exposure, but I quickly came to the conclusion that it was not going to fly on ALR land.
The ALC can’t make you plant in straight rows. They can’t stop someone working on value add (other than consumable products requiring a certified kitchen) on a farm. They can’t stop the retail on-site sales of farm products. They can’t stop you from building a flower labyrinth – heck corn mazes are specifically permitted in the regs. You can even do 10 farm events of up to 150 people per year on site if you have parking.
Farming is a tough tough business.
As I said, the ALC have no idea what they are doing to farmers.
For example: At Woodwynn I was growing lavender in a circle. There were one hundred and fifty plants. The ALC actually raised their eyebrows at the fact that the plants were not in rows. They didn’t see why everything was shaped like a labyrinth.
What they didn’t see was the potential. The one hundred and fifty plants of lavender could produce $50,000.00 worth of soap. (1,750 bars of soap fit into the same space as a bale of hay)
The labyrinth attracted many curious people onto the farm. They bought soap:)
The ALC could never wrap their brains around that idea.
Each bar of soap sold for around $5.00
When we felted the bars of soap with wool, the felted bars of soap sold for around $11.00 a bar. (It takes five minutes for felting each bar at most and fifty cents worth of wool. )
Adding value to products was the idea. It also could have provided skills and jobs and much needed therapy (Increase in confidence and meaning to their lives etc.) for those dealling with addictions and homelessness.
I had one of the major food chains in Canada interested in carrying the soap….just before Woodwynn was shut down.
The ALC said “you are not allowed to offer “therapy” on ALR land because it is not zoned for that”.
So instead….we have Beacon Hill Park with massive policing, first responders, overdozes and heavy costs…and higher taxes etc etc.
And……. farmers going broke.
I would say one potential solution is to create government policies which require landowners within the ALR to actively farm or be retired farmers. It is possible to make a living with under two acres, just difficult to do so and buy the land. Right now the only incentive is farm status if you make over 10k per year from farm products and the only disincentive is that you pay regular property taxes if you don’t.
I think there is sound policy behind ALR designations. I personally don’t want to see all the farmland developed around cities. Urban core densification seems like a better solution to a growing population to me.
FWIW, when we are in full production our calculation is that we will net 35k/year from our farm. Not a liveable wage, but not a fulltime job either once set up and this is enough for someone who is motivated ecologically and has another pt job to do the same imo. We did this because we are into permaculture and gardening and believe that this is a good move for the environment ie. we reduce our carbon footprint significantly and create habitat. Our other gardens are already permaculture/food forest gardens with wildlife habitat certification so you can do this in an urban area as well. The carbon offset from an urban permaculture food forest can be very significant.
FWIW, we would never farm 20 acres because it seems inefficient to me to do so. I’ve looked at it in depth with spreadsheets and I would rather have less and increase per acre production because I don’t want to hire and manage staff – it is a huge headache for farmers. Nor do I want to be reliant on heavy equipment. To me it makes more sense to focus intensively on small scale high production permaculture methods. You are not allowed to do this in urban areas (ie. greenhouse limits and water costs and inefficient to use treated water) so if you remove small lot ALR you are creating another barrier. Market gardeners close to cities should be supported imo.
Overall I don’t know what the best solution is, but opening up ALR land for development may not be it. This is my hard line personally, but I am strongly in favour of keeping ALR in the ALR and encouraging small lot farming at the same time. I care less if my urban home is densified because that makes sense to me from an environment and efficiency perspective.
https://paradiselot.com/2015/04/24/paradise-lot-permaculture-food-forest-carbon-sequestration-on-one-tenth-acre/
https://www.downtoearth.org.in/blog/agriculture/can-permaculture-reverse-climate-change–58729
Everything you say is true and yet it doesn’t change the reality. It’s possible to farm productively on small plots it’s just not economically viable. So what should we do? Leave the land fallow in the hope that someone sufficiently driven by ideology will eventually farm it? Meanwhile the reality is it hasn’t happened and there’s no reason to believe that it will, in fact there is less and less reason to believe that it will happen as land values increase.
Given that reality let’s think about how to use the small plots that aren’t actual farms in a way that is both useful for society and the environment instead of kidding ourselves. A real farm is fine, but that requires at least 10, realistically 20+ acres. For the homesteaders, we have endless land that isn’t right next to a city that can be purchased for cheap. You don’t even have to go far. The 40 acre boys and girls club property is for sale for 2.3M https://www.timescolonist.com/news/local/boys-and-girls-club-lists-metchosin-property-for-2-3-million-1.24310941 Go to the interior and you can get 4 times that space for the same.
That made me laugh. You may have a second career in writing listing descriptions.
An older 3-bedroom, 2-bathroom house on a bigger lot with spectacular views of the ass-end of Tuscany Village sold in 2 days for $1.025M.
1654 Teakwood Rd
Still a strong sellers’ market, I’m thinking…
I don’t agree it has to be this way or even is this way across the board. I do agree land prices skew towards estate owners rather than farmers.
Our land includes a forested edge and phased plans for creating habitat. We use permaculture practices to sequester carbon. With greenhouses you can also increase productivity. The problem is that the amount required for start up is high, especially land cost, and your return is often several years away unless you buy an established farm. We are doing this with our children so they benefit from our capital and we benefit from their labour.
There are many examples of organic farmers who have made small lot alr land productive and useful, fewer who make a full time living from it, but they put in the labour and are generally motivated by ecological reasons. There are also those who become food self-sufficient on small farms of one acre.
If we incentivize these people more and give a disincentive to non-farmers on ALR land perhaps that would help. I would hate to see the opportunity to farm and be more self-sufficient limited to those who can buy and operate large acreages by government policy based on an assessment that the land is “useless” unless developed. It is those that who are the most highly motivated to do this by a commitment to the environment that have found ways to make it work imo.
https://permacultureapprentice.com/how-to-make-a-living-from-a-1-5-acre-market-garden/
https://www.motherearthnews.com/homesteading-and-livestock/self-reliance/self-sufficient-homestead-zm0z11zkon
Means it’s a bad time to buy. Just wondering what the poster’s plans are. For example:
She sold her Toronto home to retire somewhere cheaper. It hasn’t worked
I think the shelter is probably going to cost my clients around $100,000, if not more. Couple in their mid 60s that just retired (reason for sale), have been in the house since 1993, worked 40 years bluecollar jobs, paid taxes, and now BC Housing dumps this across from them……
while I am receiving endless emails (7 today) like this all day long re owner-builder exam administered by BC Housing
I saw your video on youtube regarding the owner builder test. I agree it’s a complete sham. Anyhow I am writing mine tomorrow, I have borrowed a study guide from a neighbour. However I figured I would reach out to yu and see if it’s possible to obtain your latest study guide. I write the exam tomorrow via my computer at home. I have studied but need to be sure I pass as my wife, daughter and I will be in our 5th wheel while we build…
All of this makes perfect sense.
All of this is really disturbing. What affect is this going to have on resales and rents 3-4 blocks away from the shelter?
Definitely still a good time to sell. Market has softened a little bit from late March in my estimation but still super hot all things considered. For newer house in Metchosin you’ll be in the higher end where there’s obviously less mass market buyers but overall outlying areas have gained the most since the pandemic.
Hi Leo,
We’re thinking of listing our 6 year old SFH in Metchosin in the coming weeks. Is there still a high demand for this market or is the interest kind of petering off? It’s hard to find comparable data as all the houses and lots are different with a lot of homes built pre-1980. Lot sizes, age of homes and prices are all over the map and some houses seem to sit for seemingly a while in these hot real estate times. I’d love to hear your opinion on this area. Thanks!
But not any house in Vancouver. That was the Shaughnessy of its day. The workers lived on the other side of downtown. The modest bungalow below was 2 years’ pay for someone making $2/day. No income tax back then either.
https://ojs.library.ubc.ca/index.php/bcstudies/article/download/769/811
That is a tautology. If you can afford a SFH in greater Victoria, you can afford a SFH in Langford. The place on Alouette is 1/2 a strata duplex though.
It’s because it is within the affordability range of the bulk of SFH buyer, and anything that look half decent is $1.1 million or more.
In 2002~2003 I was comfortable with $420K~$460K purchase and every SFH that I looked at for over 14 months in that range was absolute garbage in the core/Saanich. And, they all pretty much sold for over asking, because it was in range of everyone and their dogs affordability.
I stretched my budget by a small margin and ended up with a $500K new SFH in the core that was at least $100K better than every single house that was sold for $460K~$485K, because it was slightly beyond the majority of the buyers budget.
Alouette 645k
Selwyn 757k !
Gotta scratch your head when the cheapest SFH in Langford goes 120k over ask for a cool 3/4 million.
I still can’t understand why someone paid $1.5M for that Shakespeare house
Good points “Inspector”.
Woodwynn was an amazing place. I volunteered there for several years and am currently living and working on the farm part time.
We have a new grandson now and so we will be shortly moving on to live in Sooke full time.
Working with the universities, the “Creative Homefulness Society” proved through studies, that allowing more people to live and work on the land could make the land more productive than ever before. (Unless you did it using the industrial model, where you basically batter the earth into submission.)
The ALC actually said “if we allow people to live and work on the farm, what kind of precident will that set?”
I actually thought that making the land more productive was a good idea:)
But the ALC dropped the ball and crushed the life out Woodwynn as a therapeutic, farming community. (The founder Richard LeBlanc, recognized the life altering power of a therapeutic community.)
BC Housing bought the farm from the “Creating Homefulness Society” and then decided to give the land back to the first nations who had a legitimate claim on the property.
I have tremendous respect for the Tsartlip band and I am making every effort to understand their history. It’s been interesting to hear their stories of a time only a few short years ago.
It will be interesting to see what they do with their land and I wish them the best of success.
$1.387M
Hi Leo, can you tell me what 5157 Lochside went for? I really enjoy following this blog, great resource and discussions!
Neighbours celebrate after Langford caps towers at six storeys
https://www.timescolonist.com/news/local/neighbours-celebrate-after-langford-caps-towers-at-six-storeys-1.24310761
$17,000 / ($1 ~ $2/day) at (251/work days per year) = 33.87 ~ 67.73 years to pay for a house in Vancouver not factor in interests.
https://onthisspot.ca/cities/vancouver/realestate
“We have an ALR property. We are farming it. This doesn’t mean it could support us financially.”
There is a way to support farming and provide housing at the same time but the province (ALC specifically) would need to be creative and this is unfortunately a stretch for them. Use Woodwynn Farms as an example. Yes they were going down a different path in dealing with the homeless but a similar path would involve more people than just the homeless. The farm was bought by BC Housing for just under six million dollars and was comprised of about 200 acres almost all of which was farmable (with some soils work). What if BC Housing set up a co-op system whereby the land remained in the ALR but but could be occupied on a one or two acre basis by modular or tiny homes or whatever suits your fancy. A person wishing to live on the property would be required to pay a smaller sum of money ($50,000) for the land (leased) and would have to produce farm goods somewhat like the “gentlemen farmers” do now on smaller acreages in order to pay less taxes. BC Housing could pay or lend this sum on behalf of folks who don’t have the cash but this is one hell of a lot cheaper than it currently costs to house someone. Obviously there would be other rules to make sure people were farming and producing but as a co-op the costs of equipment, water, knowledge, etc. could be shared and non-producers could be “weeded out” (just had to get that in). And the land would always remain as agricultural (modular or tiny homes can easily but moved off and the land doesn’t suffer). All of this depends on the ALC recognizing that small labour intensive farming actually works.
The stables on the island are also suspect. Sure the owner is making money, but what possible good is society getting from someone having a bunch of horses on their property that people can come ride on? Why are we subsidizing this?
Realize that small plots of ALR land near cities are not and will never be productive farms and then convert the land to something useful. I’m not saying just fill it with subdivisions, but you could take some of these unproductive plots, carve off a bit for higher density housing, convert some of it to a public park, plant trees as a carbon sink, and rewild it to provide a habitat for animals.
Right now the land is 100% useless. Fallow fields provide no housing, no food, no public access, marginal habitat, and no climate benefits. And to top it all off the public gets to subsidize it because often they pay little tax to keep it that way.
It would be funny if CMHC didn’t use this data to make decisions around access to funding.
Leo, that New House Price Index graph is really unusual. Maybe something wonky in the way they’re accounting for quality differences between houses built previously compared to now…but that wouldn’t account for land prices being constant. Whatever the case, that model needs a review, wow.
We have an ALR property. We are farming it. This doesn’t mean it could support us financially.
Part of this is that it is under two acres, but the other part is that farming is super labour intensive, requires expensive infrastructure and specialized knowledge, and labour is hard to find or farmers have to do it all themselves.
Given the price of ALR land in desirable locations and the relatively low or no ROI, most people who can afford this land are not the same people who would be willing to put in the labour themselves ie. those who are younger and with strong ecological and economic motivation and an outside job for the off season – or they inherit the farm. There are some options for leasing out to young agrarians but these are typically shorter term commitments and don’t support long-term farming sustainability.
I don’t know what can be done to rectify this, if anything at this point.
When I went to school, 25 years translated to 300 months.
StatsCan’s New House Price Index is hilarious. Apparently Victoria land prices haven’t moved in 15 years and houses are 50% cheaper to build relative to 40 years ago. Not sure why everyone is whining about house prices, just buy a new house they are cheap as chips.
Russell is just temporary apparently, the one on Catherine is within 2 blocks of four licensed daycares, elementary school, multiple playgrounds, surrounded by residential other than the hipster grocery store across the street, etc. Comfort Inn has a residential neighbourhood only to the East, across 6-7 lanes of traffic.
I personally own a unit at 834 Johnson and the shelter next door has impacted re-sale substantially (police calls up 400% to 800 block of Johnson since shelter opened), but I feel like the location of the shelter is somewhat appropriate. They need to go somewhere, but residential neighborhood I don’t know.
Right, but it makes sense to spread housing payments over 25 years. With no leverage, yes prices would fall. Construction costs would fall somewhat too. But way fewer people would own homes.
Just like Netflix… which is $15 per month by subscription. Over 25 years (300 months) that’s $4,500 Not many people would/could afford to shell out $4,500 for Netflix, but $15 per month is no problem.
That same logic applies to the $1m house, which is $3,333/month x 300months (+ mortgage interest of about $800/month in average). And unlike Netflix, chances are you get back all that mortgage money and more if you sell after 25 years,
The future of farming is dead. The ALC, with it’s inflexible, bureaucratic rules, brought this on and made farming next to impossible. (Issues such as what can be sold in the farmers barn market, the ability to rent out an outdated barn for someone’s boat, which might have given the farmer some income to buy much needed tires for his tractor… etc etc.)
Protein supply will be grown in brewing vats. Not because it is better, but because it is going to be “massively” cheaper.
No need for huge crop fields stretching away towards the horizon to grow grain for beef etc. These “Breweries” will take up a parking lot size chunk of land and free up farmland for other uses such as housing, parks wildlife reserves etc etc.
This is going to happen whether we think it is a good idea or not.
People will eat it for the same reason they generally don’t think about what is in a hotdog or those “Nuggets”…….. People stuff it down because it is cheap and the people who eat this shit are in the “billions”.
For the die hards…yes…you will still be able to buy a real steak. But it will cost an absolute fortune.
Re: 302 Whimbrel
Thanks Leo. 302 and 309 Whimbrel may be a good case study for under vs over pricing?
But that’s not the same house that would cost $1m when you can borrow the money. The no-leverage $1m house would be at the top of the market, not in the middle. Houses cannot sell for more than people can pay for them. The more money you put into buyers’ hands, the more expensive the houses get.
If post-pandemic boomer selling doesn’t show up, it’ll be time for you to follow up your pre-pandemic “Millennials Y u no own?” column with “Boomers, Y u no sell?” 🙂
$999,999.
$100k under ask. In a place with delayed offers. Amazing
That’s what the article is about 🙂
If there is we didn’t notice their absence. New lists never dropped to start with.
I didn’t say leverage improves price, I said it improves affordability. Affordable means “cheap enough for people to buy”. If no leverage was available, you’d need to buy a $1m home with $1m cash savings. That wouldn’t be obtainable (I.e. affordable) for many, unless they buy with leverage, which is why leverage improves affordability (not price).
I agree with you that if no leverage was available, the home wouldn’t be $1m to begin with, and would be much closer to the cost of replacement + much smaller land value. Savers would be happy with that scenario.
btw, If mortgage rates are less than inflation as they are now, leverage also lowers price (in constant dollars). A lot of leveraged buyers realize that, and expect it to continue, which is one reason for the buying boom.
What did 302 Whimbrel go for? Tx! 🙂
The house next door to my property was recently listed for 1.2M and sold for 1.4M. I consider both houses to be fairly equal, neither has had major renovations. 5 out of 10 buyers would prefer one house, 5 out of 10, the other. What strategy would one employ? List low hoping for a bidding war, or list closer to price recently set.
Allowing smaller down payments and more borrowing make prices and monthly payments higher. Whether that makes houses more affordable depends a lot on if you’re a saver or not.
South of the border seeing the impact of low inventory and high prices.
From: https://reut.rs/3asTuwD
Could a similar circumstance happen here as well?
Is there a big number of Boomers waiting to be post pandemic looking cash out and spike SFD inventory as they downsize?
“I think there are better locations to be picked than residential neighbourhoods. For example, Comfort Inn on Blanshard type location.”
I didn’t realize that Russell street was so residential. Also, Comfort Inn is on the other side of the street from a residential neighbourhood.
I think there are better locations to be picked than residential neighbourhoods. For example, Comfort Inn on Blanshard type location.
Now how many people didn’t bother to look at this place because they couldn’t afford $1.2M?
That place needs some work. But someone’s going to do well if they put in some sweat equity!
Definitely.
Assessed land value: $8557
Everyone feeling good about subsidizing these estates?
Thanks Maggie. I will definitely check them out. Looks great!
Probably selling holly trees for “cash”at a “stand” to avoid property taxes 🙂
People don’t like the situation in the park and they don’t want them housed either. As if there was some kind of magical solution here that would please everyone.
Isn’t it great that we have the ALR so we can have productive farmland close to the city?
#foodsecurity #totallynotestatesfortherich
Received an offer on my Langford Street listing today from young family with children from Ottawa that did not know about the shelter (neither did their local agent). After they found out they immediately rescinded the offer.
I think the shelter is probably going to cost my clients around $100,000, if not more. Couple in their mid 60s that just retired (reason for sale), have been in the house since 1993, worked 40 years bluecollar jobs, paid taxes, and now BC Housing dumps this across from them……
while I am receiving endless emails (7 today) like this all day long re owner-builder exam administered by BC Housing
All of this makes perfect sense.
Nothing, so far, leads to a Covid-free future: https://medicine.wustl.edu/news/new-evidence-covid-19-antibodies-vaccines-less-effective-against-variants/
“In Victoria, they want to own, are in the peak age for first-time buyers, and seem house hungry for SFH in the core. Hence the bidding wars and high prices.”
Do we know what percentage of first time buyers buy an SFD vs multi-family? Not a snarky question, just curious. As an elder millennial, my first purchase was multi-family, second was an SFD.
Sure, leverage has made houses affordable for generations. Including millennials. That’s not new though.
I think the huge demand for homes comes from the sheer numbers of buyers – millennials now outnumbering boomers as the “largest generation” https://www.pewresearch.org/fact-tank/2020/04/28/millennials-overtake-baby-boomers-as-americas-largest-generation/
In Victoria, they want to own, are in the peak age for first-time buyers, and seem house hungry for SFH in the core.
And in Victoria they had a low ownership rate and have a lot of catching up to do https://househuntvictoria.ca/2019/06/12/victoria-millennials-y-u-no-own/
They’re in the game now, in big numbers. Hence the bidding wars and high prices.
“Well there is the 70+ spaces on Russel st right beside co-op housing that is to open next week and the 40+ on Catherine that had no community consultation. Just look at the facilities on Ellice St and Pandora to see what is to come to the area.”
The Russell St facility is temporary and the 40+ on Catherine will be supportive housing units. Supportive housing is a good thing. It gets people out of the shelter system who don’t belong there and into more stable housing.
I know one couple purchased a home in Oak Bay for 1.7m, their incomes total about $180k recently done school… Financed by the bank of mom and dad.
Bank of Mom and Dad. No Bank of M&D? So sorry.
Actually “Bank” is a bit of a misnomer, since a lot of them are just borrowing the money for Junior.
Leverage.
Ask $1.2M, sold $1.05M after 12 days on market.
Assessed $950k
Now how many people didn’t bother to look at this place because they couldn’t afford $1.2M?
Well there is the 70+ spaces on Russel st right beside co-op housing that is to open next week and the 40+ on Catherine that had no community consultation. Just look at the facilities on Ellice St and Pandora to see what is to come to the area. I always thought the home at 822 Catherine was beautiful, but it will be interesting to see what it sells for now.
“I have talked to several residents in Vic West and three of them are selling their homes to move to a safer area in the GVA.”
Because of 45 proposed new units of supportive housing? Seems irrational.
If it’s so unaffordable for first time buyers, how come the buying boom is being fueled by millennials?
(August 2020) https://www.wsj.com/articles/millennials-are-buying-homes-in-big-numbers-11598543344
“Millennials are powering the resurgence of the housing market this year. Americans in their mid-20s to late-30s were long viewed as reluctant or unable to buy a home. But they accounted for half of all new home loans last year, for the first time. They consistently held above that level in the initial months of this year, according to Realtor.com.“
Ask and sold price of 4200 Wakefield Pl (MLS 871899)? Thanks!
Does not match with census data. Not sure where they’re getting those figures. Also the pattern of data makes no sense. This should not be noisy.
What matters is housing affordability for new buyers, not existing ones. Yes low rates have been great for existing owners.
This anecdotal, but everyone amongst my peers that purchased in the last 5 years could not afford to purchase the home they are in now (many of them purchased to be on the ladder, but can’t sell because they can’t move up). As well, For older peers that purchased in the last 10 to 20 years definitely can’t afford to buy the home they are in now (not selling because no where to live in retirement). The odd thing is, these are all people with big incomes relative to the areas they live in.
Patrick some of those numbers are totally useless without context:
Great. That can easily be explained away by things USED to be affordable and now they aren’t and no one is selling as its a harder market to move around in. A better question would be of the people who own their home, how many of them would be able to afford buying that house in today’s market (or at the wage they were receiving before retirement).
Better than the average that they have been which is also not good? Again this is Canada. If the vacancy rates in places like Victoria, Ottawa, Toronto, Vancouver etc are all really low and rates in AB are high because oil has taking a pounding and you can’t get a job there then that rate isn’t very useful.
On the last link it talks about actual payments but leaves out to get qualified for the mortgage you need to factor in the stress test which, especially for uninsured mortgages, is a real barrier.
Kenny, all of your examples are 2nd homes that are rented out to other households. What’s wrong with that? We need rentals. Home ownership is at (or very near) record highs (68.55%) so that means rentals are at all time lows.
Today residential housing investment in Canada as % of GDP is at a record high and well ahead of other countries. The problem is not an actual shortage of housing but skewed allocation due to commoditization and inequality.
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Bingo!
In the last 24hours I have had the following discussions with random people.
I feel the answer is to strongly discourage homes as investments, immediately eliminate 50% capital gains exemption on rental properties. Amateur landlords are squeezing out first time buyers and driving up prices and skewing market so that when a crash happens , and it will, it will look just like the US did back in 2007/2008.
This post is one of the highest upvoted ones on r/PersonalFinanceCanada that comes to memory. Speaks to the sentiment against our current blind RE purchasing system.
https://www.reddit.com/r/PersonalFinanceCanada/comments/mvwc2p/as_a_real_estate_agent_i_understand_the_hate_for/
People saying that there is a “housing crisis”, a “shortage of housing” and “housing is unaffordable” should explain what data metric they are using for that.
For example, these important metrics don’t point to a housing crisis.
– home ownership rates in Canada are are at all time highs 68.55 https://tradingeconomics.com/canada/home-ownership-rate
– Rental Vacancy rates in Canada in 2020 are 3.3% and better than average- https://www.statista.com/statistics/198670/vacancy-rates-for-rental-units-in-canada-since-2000/
– Housing affordability as measured by mortgage/income is within the historical range according to Bank of Canada affordability index. https://betterdwelling.com/bank-of-canada-index-shows-real-estate-is-the-most-affordable-in-years-its-wrong/#_
Pre-charter. Harder to do now when we have freedom of movement clauses – but perhaps not impossible. I can imagine it could spur some expensive court cases that the City would like to avoid and, unless you make homelessness illegal – which has its own complex issues – it doesn’t actually deal with prohibiting those who are homeless from camping here.
I’m actually in favour of measures that might make homelessness illegal, along with potentially restricting movement of the unhoused, and providing quotas for an interprovincial task force to deal with a mandatory supply housing based on population size for those who are addicted, mentally ill or otherwise unable to maintain themselves, which may be spread out provincially in small “pods” with mental health/addiction services – not hotels.
I know it sounds draconian but, with checks and balances, it might be a way out of what we have now which infringes on the public right to safety in public places. Right now we have criminals congregating in a manner that is a huge risk to other homeless people and residents.
I have talked to several residents in Vic West and three of them are selling their homes to move to a safer area in the GVA. The funny part is that in the 90’s vic west was the dodgy side of town that nobody wanted to go.
Kim Zinke at 822 Catherine said “I live in the red brick house at the corner of Catherine & Langford, kitty corner to the Tai Chi building… We are feeling absolutely overwhelmed this past week with the news from BC Housing. I just wanted to acknowledge the additional stress it is putting on my neighbours at this time. Amazing how your life plan can change over a few weeks. The changes coming aren’t supporting what we bought into 18 years ago, so it’s time to let someone else take the helm.”
The last two days:
Police arrest suspect after attack on man with Down syndrome in Beacon Hill Park
https://www.timescolonist.com/news/local/police-arrest-suspect-after-attack-on-man-with-down-syndrome-in-beacon-hill-park-1.24309431
Police search for suspect after 15-year-old assaulted in tent at Beacon Hill Park
https://www.timescolonist.com/news/local/police-search-for-suspect-after-15-year-old-assaulted-in-tent-at-beacon-hill-park-1.24310169
Experts say B.C.’s current vaccination plan doesn’t lead to COVID-free future
https://www.timescolonist.com/news/b-c/experts-say-b-c-s-current-vaccination-plan-doesn-t-lead-to-covid-free-future-1.24310354
At the same time, we clean all the water that goes into the water-full toilets, which seems even dumber.
We’ve used Island Flooring for engineered hardwood and vinyl flooring. Their vinyl subcontractor did an excellent job, but their hardwood subcontractor was slow and did lousy work. Terrible attention to details and a floor like a trampoline. Our second house was a much better experience. We went to Hourigans and they used Cherry Point Hardwoods as their subcontractor. I think the Cherry Point guy’s name was Nick. His crew was lightning fast and did a superb job. They tore out carpet and installed engineered hardwood. I would recommend them highly.
I remember a work trip to Prince Rupert about 8 years ago. Pouring rain outside (is there any other kind of weather there?) and the airport was boasting the installation of environmentally friendly waterless urinals.
No. Not if you live in Victoria- this is not an issue. Sure, if you live on Salt Spring, any other gulf island, or in California.
Water supply is a highly localized issue- there is absolutely NOT a supply issue for greater victoria. We have an abundance of water supply, we are only limited by reservoir capacity- which is an engineering/business decision.
You could run 20 lawn sprinklers 24/7 in victoria and you’d have zero effect on “the environment.” Doing the same thing on SSI should be criminal. Details matter.
Did you buy privately? Your agent should be able to answer questions this basic.
Island Flooring is a good place if you want to package purchase with install. It’s going to be a lot more than $800 to install. Probably around $2 a foot for laminate and $3 a foot for hardwood.
You can see that the wartime controls were still in place. Canada really was short of housing as very little had been built since 1929.
Today residential housing investment in Canada as % of GDP is at a record high and well ahead of other countries. The problem is not an actual shortage of housing but skewed allocation due to commoditization and inequality.
Just bought a house.
Can anyone recommend a good company to buy and install hardwood flooring in Victoria?
Looking online, it is about $5 per square foot and I read that the labour is only about $800 which seems low. Does anyone have experience putting in a hardwood floor where an older carpet needed to be taken out?
Maybe now it’s time to consider installing composting toilets into all new developments. I never hear any environmentalists mention one word about the most important environmental concern, fresh water conservation.
Campbell River sewer lines near capacity, preventing new homes from hooking up
https://vancouverisland.ctvnews.ca/campbell-river-sewer-lines-near-capacity-preventing-new-homes-from-hooking-up-1.5397426
Maybe this is what we should do? 1945
Liberal will let in between 5m to 6m people or more between 2022 and 2032. The flood gates will be opened. As I have stated in the past. No choice if we want younger people so we can have someone pay for the debt and social programs. What the impact going to be on land and housing ?? Everyone wants to live in the same place. There is so much land available in the core for this growth in Victoria and all the other major centers. Lol.
Governments just keep adding to the cost one way or another. Taxes/ population increases/ land reserves and than the cities except for Langford just love to get their share. The BS that they try to say they are adding affordable housing is one big joke. Look at the BC NDP and the liberals well done over the past 4 years. Middle class families are up to their eye ball in debt if they can afford a home.
It is not working.
First thing I would do. Ban all non residents or citizens from owning property in Canada. 5 years to sell off existing. Next look at the bull shit land reserves.
Than on from there like cutting fees cities charge and ending ridiculous building policies that add to the cost.
The 5 year fixed rate and bank prime rate are drivers for real estate. They don’t always move in parallel or in magnitude as the change in the overnight rate.
For context, here is where we are and where we’ve been:
BoC getting more bullish, rate hikes potentially moved up from 2023 to 2022
I have owned strata duplexes as investments in a former life, and yes they do come with problems. Here is a solution, though.
I wish I had thought of it sooner but I can’t be in the vanguard of everything.
https://nationalpost.com/news/world/australian-man-nearly-fainted-when-he-realized-he-paid-700000-for-half-a-house
Selwyn is a weird layout with no yard but might be worth a look at, we may add it on tour if it hasn’t sold. I think Duplexes are fine if there’s a cost savings but with the prices of the ones available right now it’s hard to justify the value for half a house. I can’t believe Alouette touts that it’s near a private school… Is someone who is buying a duplex in Langford with no yard going to put their kids in a private school? Maybe for the grass space they don’t get at home.
I have personally owned three strata duplexes. I had them as rentals. I never had a serious problems or any particular issues. Of course it can happen. Anytime one owns a particular item such as real estate, car, boat with others (including a spouse, parents or siblings), problems and issues around the ownership and maintenance are bound to come up. With strata duplexes it is often roof replacement.
I don’t particularly recommend purchasing a duplex (or condo apartment for that matter), although I know Leo seems to think they could be the way of sensible ownership in the future.
Hopefully, for a few want to be home owners here, this insane bidding war situation will abate soon. Then maybe prices will level off or even come down some. But then of course interest rates will probably go up.
It is difficult though when a young couple are really wanting to purchase a home to live in. As much as there is good advice on here as well as various articles on the pros and cons of purchasing, I know if it were me, listening to it all, and trying to absorb and categorize everything, I would probably just freeze up. In the end, sometimes you just have to trust yourself when making these decisions.
Sounds like hot stuff!
Someone had been leasing the dog park?
It’s 1/2 a strata duplex in case that wasn’t clear.
https://www.cbc.ca/news/canada/british-columbia/strata-disagreements-tribunal-1.5895747
There are a couple of newer homes in Langford in slightly nicer areas and closer to downtown Victoria than some.
These have both been on the market for 20 odd days now.
507 Selwyn Falls. SFH, 3 bds; 2 baths (no ensuite). Very cute and nicely finished with HW floors etc . Pretty street, not a lot of parking.
3088 Alouette. Duplex. Again very nicely finished. Lots of parking. 3 beds & 3 baths including ensuite.
Both are in the $639K range. Maybe could get for under asking?
Marko might know if these seem like a decent buy right now.
Ks112 yes a few more bucks needed for property tax and maintenance but really we’re just saving that cashflow right now for downpayment so i feel like we’re stretched in both situations. We save more and prices go up way more, spouse says wait til the fall so I’m trying to find patience.
Also still a moot point, cookie cutters still running around 730k, just saw a 3 bed kettle creek special on a 2400 lot go for 785 !!! Cannot compute.
good grief.
i am finally able to remember what FOMO means. will now have to look up YOLO
Leo, I know your perspective is that the stress test started wearing off in spring 2019, but if you look at the 5 year mortgage rates, it went down from 3.2% in beginning of 2019 to a low of 2.3% later that year. To me that seems more like people getting in the market due to low rates than people finding ways around the stress test.
Patrick, you don’t think people would pay $1.5M for renoed 50 year old house in Oaklands if CAD and USD were at par? 😉
Cadbro, you need to factor in property taxes, insurance, maintenance though. you are going to be over $3k/m after that so you are saving at least $12k a year in cashflow by renting and that is not counting the extra gas/time commuting from Langford. If you find something you like for $680k (assuming that is your max budget) then you should YOLO and go for it, but if it’s something just meh and you are just buying for the sake of buying then you might want to give it some more thought because that is not YOLOing.
Thanks Leo
Anyone know whatever happen to hawk and our other bear. The house assessment guy?
Ks112 I’m starting to shift my thinking that way too. We pay $2000/m rent so every house I look at I directly compare to that as my metric. A 680k house +CMHC, with 10% down at 1.8% interest = $2600/m. Do-able, even though house would be almost 7x our income (que anxiety). I mean it’s only a few bucks more than our other soon-to-be mortgage size payment of 2 kids in care, YOLO right?! I think we’ll stop eating cheese.
There was zilch in either budget for us until Trudeau’s daycare bucks come at the end of NEXT year. So it’s back to the haul, will go see a house or two this weekend. I hope the bidding wars have calmed the f down.
Leo, I think if there are any lessons for the RE market to be learned it is that people don’t give a damn about valuation metrics and only care about affordability when it comes to monthly payments.
I have a doctor friend living in Moncton who is actively searching for a home there. He says there are a number of good housing forums for Moncton but he was hoping to find one which sporadically throws in posts about Victoria duplex prices.
Can anyone help?
“555 TROUT LANE”
Must have sold again privately? That house went unconditional in a bidding war in October. It was in mostly original condition, so I’d be curious to know what, if anything, was done.
NB is doing just fine. Even a couple of thousand people moving to the area certainly puts more pressure on housing demand.
By the way…those that look at the world as a glass that is half empty….. always close doors to opportunity on themselves.
Gives me have a good laugh though because it leaves more room for those of us who see the opportunities out there.
Any speculators starting now have missed the boat
A main reason interest rates are low is that the Bank of Canada has been buying $4 billion of govt Canada bonds per week. They’ve bought up 35% of all bonds in existence just to maintain these low rates. They’ve announced that they’re going to stop buying bonds in April/May and today took the first step, lowering their buying to $3 billion per week, still a huge amount. Immediate reaction is rising CAD (instantly up 1% to over $.80 https://ca.finance.yahoo.com/quote/CADUSD=X/) , rising 5 year bond yield, and rising expectations for inflation and future interest rate hikes.
And so does the Bank of Canada think that these ultra low interest rates are to blame for the house prices? Nope… they say the home price increases are “rooted in a fundamental increase in demand”.
Do they think people are speculating in the house market?… Nope…. they say that people could start speculating though.
They’ll find out soon enough when they stop buying bonds altogether, not just baby steps of slowing down the money printing presses from $4bn to $3bn per week. By the end of May, if they’ve stopped the buying, CAD and rates should be up, with expectations to keep rising. Interesting to see how much that cools the housing market.
https://www.reuters.com/article/bank-of-canada-worries-high-housing-pric-idUST5N2JF02O
“The central bank said that while the strength in the housing market was rooted in a fundamental increase in demand, past experience showed people could start speculating in property.”
555 TROUT LANE
Sold Oct 2020: 702k
Sold Mar 2021: 832.5k
Does anyone know what kind of upgrades were done here to have that much gain in under 6 months?
It matters in the sense it was the valuation from 10 months ago. Maybe those assessments came in a little low due to the market turmoil but still gives a sense as to magnitude of the increases
Still shows active
https://househuntvictoria.ca/2021/04/19/do-bidding-wars-work/#comment-78912
Leo, does assessed matter anymore?
4533 rithetwood. Anyone know the status?
Thanks
Ashdowne: $1.685M, $360k over ask, $981k assessed
Sandown: $1.405M, $215k over ask, $988k assessed
Anyone know the sale prices on 2981 Ashdowne and 2183 Sandowne?
That reminds me of the cryptococcus fungus that is endemic to Vancouver Island. Infection can be deadly.
One of the symptoms is apathy.
OK but the vreb.org benchmark SFH is up only 10% YOY in March and it isn’t “laggy”
And the condo benchmark is down 0.5% YOY. ????
https://www.vreb.org/current-statistics#gsc.tab=0
“The Multiple Listing Service® Home Price Index benchmark value for a single family home in the Victoria Core in March 2020 was $879,600. The benchmark value for the same home in March 2021 increased [YOY] by 10.1 per cent to $968,700 a 2.2 per cent increase from the previous month of February.
The MLS® HPI benchmark value for a condominium in the Victoria Core in March 2020 was $531,800, while the benchmark value for the same condominium in March 2021 remained close to last year’s value at $529,100 a 0.5 per cent decrease. “
Fair enough James – but better than nothing wasn’t what I was hoping for. Cadborosaurus the stress test is a red herring – it’s not likely to have any impact as the banks are circumventing it already as they see fit.
Rush4life, can’t they still play with the stress test? I was expecting more from both budgets but perhaps there’s more to come that’s outside of this.
These things aren’t related.
If they don’t build the housing, and we still get 400k immigration, then what?
https://vancouversun.com/news/local-news/b-c-budget-2021-support-for-affordable-housing-and-income-assistance-promised-but-nothing-to-cool-hot-market
Government spending 1.1B on ‘affordable housing’ which, after factoring in 400k immigration, will likely have little to no impact assuming they can even build that much.
“The province set a three- to five-year time frame for the houses to be built.
Over each of the next three years, the province will spend more than $1.1 billion on housing.
Asked by reporters why her budget didn’t include any new demand-side measures to address the hot real estate market, Robinson said B.C. has previously moved to cool demand and said the province was looking to the federal government to address the problem through its proposal to stiffen the mortgage stress test.”
Newsflash the Federal government ain’t doing squat so basically nothing will be done in the near future for this.
Keep in mind that Teranet uses a 3 month moving average and gets its data from closings, so some of its March data could be from sales as far back as 2020. Also it includes all housing types not just SFH.
Teranet seems to be sticking with numbers indicating smaller price increases for SFH, in line with the vreb.org benchmark SFH price. Teranet has our March prices for SFH up only 10.5% YOY, which is “lagging the country-wide average increase” (using its’repeat sales methodology). A big difference from the averages, which seem to be up about 25%. Not sure why there’s such a big difference. Fwiw, Moncton NB is up 20% YOY.
https://housepriceindex.ca/2021/04/march2021/
“ The March composite index was up 10.8% from a year earlier, for an eighth consecutive acceleration and the strongest 12-month gain since September 2017. It was led by five markets – Halifax (22.5%), Hamilton (20.9%), Ottawa-Gatineau (19.0%), Montreal (16.1%) and Toronto (11.2%). Lagging the countrywide average were Victoria (10.5%), Quebec City (8.1%), Vancouver (7.9%), Winnipeg (7.8%), Edmonton (2.9%) and Calgary (1.8%).
Nothing for housing in the budget aside from some more affordable housing spending – expecting up to a 9.7B dollar deficit which is higher than this years at 8.1B. All in all a nothingburger for housing from what i can see.
Zero housing moves in the BC budget other than the $2B in interest free loans already announced.
Property transfer tax revenue is expected to decline slightly in 2021/22 reflecting an
anticipated moderation of market activity in 2022 and assuming a portion of strong
revenues received in 2020/21 do not carry forward. This decline is expected to be
followed by an average annual decline of 2.5 per cent over the next two years, consistent
with the expected annual changes in residential sales values.
New Brunswick gained a grand total of 2,038 people over the last year. It’s been a slow year all over the country – Canada gained only 149,461.
https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1710000901
Possibly explained by that mystery neurological disease that’s going on there…
There are almost 800,000 people in New Brunswick.
Six people have died from the mystery neurological disease in the province of NB …..which appears to have been around since 2016.
In British Columbia, 1,538 people have died in the past year from Covid.
People are still moving to NB and Moncton in large numbers driving up real estate prices and demand.
For example: The duplex we bought in Moncton, as an investment, has gone up by more than one third since 2018. Plus ….we have had over three years rent out of it. We are happy with that return and see NB as a great place to stay invested.
Some fun Googled stats while I anxiously await Selena Robinson’s budget to show a glimmer of hope for home ownership after Chrystia Freeland’s abandoned me. If empty foreign-owned houses are the only issue, do the feds just want me to rent from foreign owners?
Unemployment rate in Moncton is 9.6%
Vacancy rate 2.8% (4.5% in Central)
Average January Temp: low -12 high -2
Snow in February 2021: 76cm
It does appear their happiness rating is about the same as here though.
https://www.cbc.ca/news/canada/new-brunswick/mystery-brain-disease-frustrated-families-1.5990738
Might be more of an opportunity coming up there as some buyers are having second thoughts now.
I’m sure that “Umm..really” is aware that Atlantic Canada has done brilliantly with the covid. Very few cases and in complete control.
Anyway…… my point was that Duplexes and houses are shockingly inexpensive and very, very affordable….even as people from Toronto and elsewhere flock there .
What I find funny is how people, in places like Moncton, often say on forums that their housing prices are “totally nuts” and “becoming outrageous.”
($289,900.00 for the full duplex in Moncton shown.
Because Victoria is better in this regard??
Along with cheap houses in NB you get that famous high quality maritime health care!
https://www.cbc.ca/news/canada/new-brunswick/gynecological-health-new-brunswick-sherrie-hudson-woodstock-uterus-1.5983688
https://www.cbc.ca/news/canada/new-brunswick/health-moncton-gynecological-reconnect-mh%C3%A0iri-agnew-1.5951289
47 foreign owned properties paying 2% vacancy tax in Saanich. 61 in Victoria.
Even if the new federal tax motivates them all to sell next week we would hardly notice.
how is this house still on the market for $1.3 with price drops? Seems like a great deal given what else has sold for around that price recently.
https://www.realtor.ca/real-estate/23078960/3969-sequoia-pl-saanich-queenswood
https://househuntvictoria.ca/2021/04/19/do-bidding-wars-work/#comment-78889
I wish I own a house in Victoria, James!
You’ll come back and tell us when you’ve sold it yeah?
https://www.cbc.ca/news/canada/british-columbia/prince-george-real-estate-1.5991433
As long as Vancouver is higher, Prince George has a ways to go.
People can sell their Kitsilano place and buy in PG with money to spare.
Only goes up from here.
Curious if anyone in here has information on duplexes in Moncton?
Moncton, full duplex. $289.900.00. Rental income of just over $2,000.00 per month. (A one bedroom suite and a three bedroom.) Quite nicely prented.
Yes…it’s Moncton…but it amazes me how cheap it is.
My tenants gave notice that they were moving out, which they soon rescinded, but my property manager had put an ad on used Victoria and received 43 inquiries of families “screaming “ to see the house. It’s located in the Oak Bay Henderson area. Just an indication of the rental demand for SFD, I would estimate there are hundreds of people looking for a house to rent. This is also an opportunity to sell the property, but I think that would be foolish.
Finally a good priced home for sale…3 beds up, and a nice addition on the main. Great location too…needs some work!
https://www.rew.ca/properties/3260103/1618-amphion-street-victoria-bc
Wonder how much this goes for!!!
…
> 0 appetite to participate in the stress of bidding.
Ya, I am really going to watch and see what happens with the climbing mortgage rates and the new OFSI rules and if anyone remembers we are ina recession at some point. At least the feds didn’t throw more gas on the fire with some new buying incentive. Unfortunately, I will take a hit with cost on the climbing rate and some borrowing capacity loss with the OFSI rules (capacity I didn’t want to use anyway). However, I can mitigate the climbing interest rate and the OFSI rules by shortening the amortization and increasing my down payment. I really just want some more inventory to select from more than anything else.
https://www.cheknews.ca/victoria-councillor-proposes-parking-credit-to-incentivize-more-downtown-visitors-770763/?amp
Lol..not going to help, parking is not the problem for people staying away (it doesn’t help). People are staying away (and part of why I want to move away from downtown) is that you are constantly accosted by junkies in downtown Victoria. While enjoying your dinner, take a look to your right and watch a person drop a deuce, shoot up, spitting on pedestrians, threatening people and the Victoria standard demanding money at the ATM or just shouting at you that this problem is your fault (I guess they have been getting social justice training for that last point)!
That would be 25,000 properties paying $7k (based on av. Property Price of $700k) X 4 years. That’s 250 properties for Victoria (since Vic is 1% of Canada). Over those 4 years, Vic population may rise 20K people, requiring 8,000 dwellings, so it’s unlikely that taxing those 250 foreign owned properties will make any difference.
Just another feel-good “let’s tax foreigners” tax.
I was never very hopeful on the Feds – the Provincial budget drops tomorrow so I’ll be curious to see if it has anything outside of what they are already doing on it.
Lots of debt and deficits… https://www.theglobeandmail.com/politics/article-federal-budget-2021-highlights-child-care-housing-jobs-recovery/
Budget: https://www.budget.gc.ca/2021/pdf/budget-2021-en.pdf
Umm… Really? You’ve described my current house hunting expirience too. We stopped viewing anything that was clearly set up for a bidding war last month, and then decided to not view anything at all until after this week’s budgets (and today’s is truely disheartening). I favorite everything on PCS that I like and watch what it sells for, 0 appetite to participate in the stress of bidding.
Umm Really, I think what you are describing is affordability reaching its peak for most local buyers which is to be expected. Although anecdotal evidence, the 2 people i know that sold in a bidding war in the last couple months where there was a significant gap between the runner up were put forth by Vancouver buyers. These were both in the farfield/oakbay area.
One other mildly housing-related point I came across in the budget:
“The government proposed to apply the GST/HST on all supplies of short-term
accommodation in Canada facilitated through a digital accommodation
platform. Under the proposal, the GST/HST would be required to be collected
and remitted on short-term accommodations supplied in Canada through an
accommodation platform by either the property owner or the accommodation
platform operator. A simplified GST/HST registration and remittance framework
would be available to non-resident accommodation platform operators that are
not carrying on business in Canada. “
Don’t want to upset homeowners. There might be an election coming. 🙂
https://www.theglobeandmail.com/politics/article-federal-budget-2021-highlights-child-care-housing-jobs-recovery/
Understandable, I have stopped trying to view places or placing offers. A listing comes on that I might have an interest in looking at, so I email my realtor for additional information. If the listing has the direction of offers being held for presentation, I don’t bother. If a listing has an offer on it, I don’t bother (so nothing to view at all..lol..). I found it really saves me, the realtor, the broker and lawyer a lot of time instead of going through the process just to be out bid on a property. I don’t see the point when my participation just drives up the cost for someone else and all I get to do is waste my time. The odd thing recently is that the sellers realtor has reached back a few times to say we should book a time to view or consider placing an offer (maybe things have lightened up a little bit or they were just really keen on pumping the competition).
Ok, 2664 Dunlevy sale looks nuts, 1.7MM small house on smallish lot with minor reno.
Sorry about the typo! ask at 1.1M and my friend bought at 1,165,000
“The problem I am finding listing properties at market or just above is the buyers don’t assume they can negotiate down, so they just don’t bother booking showings. They look at a $1.1 million listing assuming it will go at $1.1 or higher. They are not thinking we may be able to get this house for $1,050,000.”
I have a co-worker trying to sell a house in the $1.3-1.5M range right now in Sannich and they are having the same issue with not many showings. If that old reno’d house on Shakespeare went for $1.5M then their house is a smoking deal.
Millions? Surely not, unless your friend is Bill Gates. Thousands? I don’t think Seattle is that cheap.
Or did you forget the decimal point? 🙂
Cannot agree more. A friend in Seattle bought a house (asking 110M) last year. It’s legally binding for the seller’s agent to inform the highest offer price (116M) he received. She offered 116.5M and kept inspection condition only, and she got the house without overpaying much. BC definitely needs to add more transparency to the bidding process – how much is my offer compared to the highest offer so far?
Leo, excellent work, extremely impressive.
The problem I am finding listing properties at market or just above is the buyers don’t assume they can negotiate down, so they just don’t bother booking showings. They look at a $1.1 million listing assuming it will go at $1.1 or higher. They are not thinking we may be able to get this house for $1,050,000.