[Darb 2k]

Saw this posted a work. Interesting.

Thoughts?

Came across this site which you may want to check out if you are thinking of buying (or selling) real estate in the next while.

http://www.greaterfool.ca/ (MP Garth Turner's book site)

Here's a Victoria-specific letter and response I found interesting:

Hello Garth,
It’s been many years since we last spoke about the time you returned
to government, but I wanted you to know how well received Greater
Fool is out here in Lotus Land. Well, at least by me. I hadn’t
finished the first chapter when I called down to Bolen Books and had
them set aside additional copies for each person in a group I meet
with to discuss investments. You’ve put into clear language what I’ve
been trying to tell people for some time now. Hopefully with your
background to back it up, the words will carry further and with more
weight. I’m even hoping that after reading her copy my mom will be
able to shake herself out of her lifelong fixation on her house.

The sad thing is there are many who will grudgingly admit that what
is happening in the US *might* happen to the rest of Canada, but
*surely* won’t happen here in Victoria. This has added gasoline to
many people’s desire to buy, even in the face of increasing
inventories and stagnant sales.

The unfortunate quandary for people like myself is that for a mid-
thirties, recently divorced, working stiff it looks like *all* the
options are poor ones at this point. Affording a traditional mortgage
on a single self-employed income is prohibitive, renting anything
affordable has far too many restrictions (no pets, no gardens, etc),
the new mortgage options seem to have more downsides than ups for the
person paying the bill, and it’s looking to get worse as costs
continue to increase across the board due to Olympic Inflation while
wages lag.

Thank you for your time, and all the advice over the years.
Cheers,
Scott

--

Yes, delusional thought seems to be a by-product of living in
Victoria. Granted, it is a jewel, with lots of cultural stimulation,
an enviable climate, wondrous geography, a quaint way of life,
government stability and memorable architecture. All that supports
local real estate and has resulted in a premium for houses located in
the region.

However, you must remember that affordability levels have plunged as
prices increased, and with the inevitable economic downturn gripping
the national economy, this problem will be exacerbated. The second
major concern is that Victoria’s relatively small population demands
a sizeable net inflow of people in order to sustain real estate
values. Those people – buying homes worth an average of over $600,000
– need to dispose of real estate in other regions, usually Ontario,
before they can buy over-priced digs on the island. But the market is
falling apart back East, and the disintegration will only pick up
speed over the next year. Conclusion: Victoria prices now have just
one direction in which to travel. And anyone buying in the next 12
months will, unfortunately, regret it. The phrase, ‘greater fool’
charges to mind.


From: http://www.greaterfool.ca/2008/04/12/the-sad-descent-into-heloc/

[ostampflee]

The stupidity has to end at some point... you need six figures of income to buy anything that you could raise a family in, and I dont think the median income in Victoria is anywhere near that.

Watch high end condo prices and the more expensive houses with no good reason for being expensive (Bear Mountain), they'll be the first hit.

[Darb 2k]

I hope so. Gives us Low-Mid class people some hope of buying.

Listings have increased greatly over the last month.

[Hickman]

yeah i her about this as well. i hear ruffly taht houses will be droping 15-20 K in the next 8 monthes.

[Victoria SiR]

Pretty much the main reason I have been waiting.

[Hickman]

Pretty much the main reason I have been waiting.

/agree

10 char....

[rental_metard]

I'm hoping for it. Some houses here i saw were way too expensive for their size / local. Their was a house for 700k like two blocks from $$$$$$$$. Fuck that.

[MidnightMechanic]

Its already happening. A friend of mine's parents had their house up, just dropped the price $20k to get more interest. It will turn into a buyer's market in no time.

[Vette Dood]

If you look at the housing market historically (in Victoria) over the last 40 years, there is a very clear trend with how the market changes. There has been almost the exact same trend 3 times now. Property value maintains a constant value for 7 to 10 years, then over the course of 3 to 5 years it will double in value. Towards the end of the doubling period there is a small dip of 5 to 10% before it flattens out and repeats itself on teh same cycle. If you look at the pricing in the market, we are just coming to the peak of that doubling phase. If you look at the properties on the market, it is a good indicator that that hump is being crossed and there will be a downward shift over the next 12months. There is more property currently on the market then there has been in like 7 years. Every month there is less being sold. The Victoria Real Estate Board has very good published statisics if you want to take a look for yourself. While no one can predict the future, I would say the likely hook of atleast a 2 to 3% drop is high, and a good change of a few more points beyond that. In a market where a house will run you 500 large, 3% is a nice size of change. For those that think your average starter home is going to drop down $200k, I have news for you... people are going to still expect to pay over $400k if not more for a starter home, but I feel there is still a bit of time before the market is just right to buy in. Another indicator is new condo developments. There are several in the city (Dockside Green, Reflections..) that can't continue development do to lack of pre-sales. This is a great indicator of the bottom side of the market going down, and that will suck in all the other prices. For anyone holding out in a 50% reduction in housing prices, good luck - it won't happen. If you want to save your self $25 - $30k I'd bank on buying in Q4 2008 / Q1 2009.

Another thing to keep in mind is that waiting to save that few extra thousand may end up burning you on interest rates. No one can predict the rates, but there are a lot of people floating variable rate mortgages. There are also alot of talk and fear rates are going to go up. This is starting to cause a shift from variable to fixed rates. One thing you can count on is the banks taking advantage of the demand and bumping the rates up of a fixed rate mortgage. Some lenders are already trending this way.

My best bet at this point is to watch the market like a hawk, have all your ducks in a row to get your mortgage. Wait as long as you can, and then get a pre-approval and a rate hold on a fixed rate mortgage before it bumps. Hopefully your lender will guarentee it for 120days, then start to move on houing. That gives you 4 months at todays rates to find a house and for the market to shift a bit further.

Those are my thoughts and plan at this point.

[Great68]

Well, Phase 3 of Dockside Green has been put on hold because they haven't sold all the units from Phase 2 yet.

That's not a good sign, the whole Dockside Green site is supposed to be 10 phases, 1000 units when all done, and they're having trouble selling their 250th unit.

Of course, $350K for 600sq ft is a freaking rip off, even for the location and all the frilly "Green" things that place has to offer. These condos are no "starter homes".

I guess it only appeals to the trendy urban greenie weenie, latte sipping, beret wearing, haiku writing motherfuckers.

I didn't buy right when I moved here because I bet on prices dropping. I'm happy it might be actually happening.

[sixthgear]

prices come down, rates go up. Best to see if you come out ahead with this "down turn". Personally, we are still going forward with building a new house. Our house may "drop" 15-20K, but it is still way higher than what we paid for it.

[Victoria SiR]

If rates aren't in the equation the situation changes.

[Enraged]

historically, variable rate mortgages cost less, but there is, obviously, a risk. I'm looking at buying in Q1 2009, so I have been watching all of the listings on mls. more and more are being relisted at lower prices.

it's good to see there are like-minded people in Victoria who realize that $300k for a 650 sqft 1 bedroom condo is not a good deal...

[Vette Dood]

In my opinion, rates are always in the equation. Even if I had enough money to flat out buy a house I wouldn't. Id spread it across 20% down on as many houses I could that had a 2bdrm suite, mortage 80%, double rent the property and have the two suites pay off the mortgage for you. Thats just one option though.. with the market topping off, and lots of money to play around it may be more cost effective to use the large sum of cash to invest else ware for a 'lower' risk investment, but a higher return then would be payed in mortgage rates. Then either rent a full house or put 20% down to cover the mortgage and pay the interest rates on the principal. There are good reasons why investors don't think property is a good / safe investment and would rather rent then pay a mortgage and invest money into something with higher / safer return. There are plenty of places that are moderate risk to dump money into with 12% dividends, I don't think property is going to get that kind of pace anymore.

[Great68]

it's good to see there are like-minded people in Victoria who realize that $300k for a 650 sqft 1 bedroom condo is not a good deal...

You couldn't even fit a queen sized bed in the Master Bedroom of a typical suite at Dockside.

And if only people could see how shitty these things were actually built (Like I have), they'd be running away...

[rental_metard]

I guess it only appeals to the trendy urban greenie weenie, latte sipping, beret wearing, haiku writing motherfuckers.

dottie ?:haha:

[sixthgear]

If rates aren't in the equation the situation changes.

Yes, if you paying for it 100% up front then interest rates are not in the equation. Sadly, 99% of buyers aren't in the situation to pay for a new place all at once. A small change in the rate can sometimes be the difference between someone affording a place and not affording it. Personally though, if you can't take a change in the rate, you shouldn't be looking at a place worth that much.

[Vette Dood]

if you can't take a change in the rate, you shouldn't be looking at a place worth that much.

Example: USA

[TouringTeg]

I don't think there is anyway rates can stay as low as they are. Interest rates will need to be rasied to slow down the inflation rate. With gas and food prices skyrocketing and a slowing economy worldwide there aren't as many buyers. I agree that we aren't going to see anything crazy like houses under 300k. Victoria is still very desirable and boomers are looking to retire somewhere nice.

We bought our condo in Q4 07 and are happy. We plan on keeping it and renting it out and buying again. We were considering buying again earlier this year but it was clear prices were going to start coming down.

[Victoria SiR]

Yes, if you paying for it 100% up front then interest rates are not in the equation. Sadly, 99% of first time buyers aren't in the situation to pay for a new place all at once. A small change in the rate can sometimes be the difference between someone affording a place and not affording it. Personally though, if you can't take a change in the rate, you shouldn't be looking at a place worth that much.

Fixed for accuracy.

[sixthgear]

Fixed for accuracy.

Not really. I am a 3rd time buyer and I don't have 100% to put down.

[dustinb]

I bought my house when I was 22. 8 years later it's worth ... 4 times more. And guess what, when I bought it for $130,000, it was just as tough as it is now to get money. Banks were WAY less likely to give money out to people, and interest rates were significantly higher. We couldn't get over $150,000 from the banks, and my wife and I both had very good income and a large down payment. So even if prices drop (especially because of economy), then interest rates are going to go up and banks aren't going to give money out.

On another note, but I want houses to stay as expensive as possible. It's not that I don't want you guys to get houses, but equity is king and it really has given me financial freedom. However, I can also see not wanting to get into a $400,000 mortage. Especially if the markets do crash and interest rates go through the roof.

[Black SC2]

This may be weak advice, but it helped her ladyship and I a tonne when it came to purchasing our house; get something with a mortgage helper in it. Having the rental income allowed us to get into a house size/ locale that we otherwise couldn't afford, and will also help us ride out potential rough times ahead. There seems to be a fair bit of land zoned as R2, so if you're looking around, keep those areas in mind. Illegal suites can be more trouble than they're worth, and you can't claim the potential rental income when it comes to shopping for a mortgage.

[Great68]

This may be weak advice, but it helped her ladyship and I a tonne when it came to purchasing our house; get something with a mortgage helper in it. Having the rental income allowed us to get into a house size/ locale that we otherwise couldn't afford, and will also help us ride out potential rough times ahead. There seems to be a fair bit of land zoned as R2, so if you're looking around, keep those areas in mind. Illegal suites can be more trouble than they're worth, and you can't claim the potential rental income when it comes to shopping for a mortgage.

Werd.

Mortgage helpers helped my cousin buy a $550K house as his first home. Granted the house needs A LOT of work, but he's a journeyman carpenterso for him it's easy. Houses with legal suites already built into them are hard to find though. I know when I was looking for a place to rent only a few of them turned out to be fully legal.

[Nightwalker]

Good time for this thread, I have an appointment with my loan officer to discuss this on Tuesday. I'm looking now but probably won't be after anything till 4th quarter, or 1st quarter 09.

[ostampflee]

If prices do come down, I dont think it'll be more than 5-10% and the market will bounce 2-3 years after that. Don't wait, just buy what you can really afford. Look for value, we love our house, but we also purchased it as we believed it had the most upside... great street, nice architecture, what could be a beautiful yard, and it needed a bit of work. I waited 3 years, the end result, I ended up paying twice what I could have. My house sold for $230k two years ago and $130k two years before that.

I'm extremely happy that I'm paying historic low interest rates for the next 5 years... it just means I'm paying principle off faster.

[MidnightMechanic]

Another possibly 'weak' bit of advise that may help; make weekly payments, not biweekly. It sounds laughable, but the intrest that accrues on an extra 7 days per payment, can really add up. Especially if you're paying $500+k, and for 25+ years. Get your mortgage agent to crunch the numbers.

[ostampflee]

Good advice! Weekly payments (payment*12/52) would save me approx $15k over the life of the mortgage. Accelerated weekly payments (payment/4) are saving me $150k but I end up paying I think an extra $2000 a year.

A good mortgage broker really helps, don't borrow from a big bank!

[aspect]

I like how RS has changed in the past 4 years, haha.

Anyway, I am also scoping for a house/condo early-mid next year. The market cooling off a bit is great news for me, especially considering the same thing is happening in vancouver (where we are looking). I don't expect a serious drop in prices but at least sellers will have to be a bit more realistic.

[Enraged]

recommendations on local brokers?

[ostampflee]

I had two different brokers (yeah, I switched during closing)... I liked Hans @ Invis (I think thats what his name was) better. His office is on the street that runs parallel to the PatBay right off of Quadra.

Looking back, I didn't like my realtor nearly as much... we wasted a lot of time and opportunity not looking in Sooke like I wanted to begin with.

[sixthgear]

I use Select Mortgage. Deenu at the Goldstream location.

[Benny95TA]

recommendations on local brokers?

One of my oldest friends is a broker. He just moved to Vancouver, but he can still help you out if you are interested. He's helped some friends of mine even though he new he wasn't going to make any $ from it. Send me a PM if you want his contact info.

[projectcivic]

I think we will see a correction here in Victoria but for those people who think the market here will crash and house prices will drop below $250,000 for a house. Keep dreaming, its not going to happen. My mom was showing me a graph (she is a realtor) showing the house pricing trends over the past 25 years. It showed 2 corrections in that time, one correction was 3% and the other was 6% I think. That means if that trend was to happen here at a 6% correction, we would see a $450,000 house going now for $423,000. Still not a crash if you ask me. Houses here in Victoria are still selling fast if they are priced correctly.You just don't see the deal where someone listed there house at $600,000 (worth $450,000) and selling in 48hours.
4 years ago when we were right in the huge spike in prices my mom told me there was a aprox. only 1000 houses on the market here in Victoria so choices were few so people with crappy houses could ask what ever they wanted. Well right now there is something close to 4800 on the market. So if your not pricing it right, it won't show and therefore not sell.

[mr.slave]

im wondering what soaring oil prices will do to realestate not in the town cores..

[sixthgear]

One of my oldest friends is a broker. He just moved to Vancouver, but he can still help you out if you are interested. He's helped some friends of mine even though he new he wasn't going to make any $ from it. Send me a PM if you want his contact info.

Interesting that he wouldn't make $ from it. The brokers generally get paid by the lender, not the client.

[boxeraddict]

You couldn't even fit a queen sized bed in the Master Bedroom of a typical suite at Dockside.

And if only people could see how shitty these things were actually built (Like I have), they'd be running away...

I'd be worried about how high the strata fees will be to maintain all of the enviro-friendly features, and what the assessments will be when that stuff breaks down and needs replacing.

My building might not water the plants with our own sewage but at least I don't have to worry about being hit with a 5k assessment to replace our treatment plant :p

[Benny95TA]

Interesting that he wouldn't make $ from it. The brokers generally get paid by the lender, not the client.

He's helped with advice, even when the deal wasn't going through him... in other words: he's good shit. :)

[Narayan]

Working at the bank I receive the MLS sales report of property listings and properties sold.

Sales are down across the boards on a average of 40%

Prices are increasing still but at a low rate of 3-4%

(these numbers are comparing this year to last year FYI)

It's already a buyers market especially on higher value Holmes.

But is it still out of reach for most family's? damn right it is.

I have 2 kids a wife,a good paying job and a town house in Langley that's about 4 years old. I would love to buy a house but doubling my mortgage to 400,000 from 200,000 makes me want to puke in my mouth.

I even considered relocating to Chilliwack where affordablility is alot better ( new 2500sqf house for under 400,000) but moving to Chilliwack also makes me want to puke in my mouth... HAHA

[fenge]

I think we will see a correction here in Victoria but for those people who think the market here will crash and house prices will drop below $250,000 for a house. Keep dreaming, its not going to happen. My mom was showing me a graph (she is a realtor) showing the house pricing trends over the past 25 years. It showed 2 corrections in that time, one correction was 3% and the other was 6% I think. That means if that trend was to happen here at a 6% correction, we would see a $450,000 house going now for $423,000. Still not a crash if you ask me. Houses here in Victoria are still selling fast if they are priced correctly.You just don't see the deal where someone listed there house at $600,000 (worth $450,000) and selling in 48hours.
4 years ago when we were right in the huge spike in prices my mom told me there was a aprox. only 1000 houses on the market here in Victoria so choices were few so people with crappy houses could ask what ever they wanted. Well right now there is something close to 4800 on the market. So if your not pricing it right, it won't show and therefore not sell.

From 1981 to 1982 there was a 43% drop in inflation adjusted SFH prices in Victoria. In 1994 there was a 11% drop. This is from the VREB's own stats.

If there was a 40% correction in housing prices I wouldn't be surprised. It is happening in the US, the UK, India, Spain... why not Canada. Oh wait, prices are already down 10% in Calgary.

I'm not praying for a housing crash--don't get me wrong. Many of my friends have recently bought into the hype and purchased $500 homes as first time buyers. But what if prices go down a modest 10%, and rates start to climb to back up to normal levels?

I'm going to wait and see what happens. The next few months should get really interesting.

[Narayan]

Here are the MLS stats I was discussing above...

May MLS Statistics:

The number of residential units sold in B.C. on the Multiple Listing Service® (MLS®) declined 30.7% in May compared to the same month last year, with 8,101 units sold. Residential sales dollar volume reached $3.85 billion this month, a 26.6% drop compared to the same month last year, while the average residential home price reached $475,656, an increase of 5.9% compared to May 2007.

Greater Vancouver: The number of residential units sold in May reached 3,065, a drop of 30.5% compared to the same month last year, while dollar volumes decreased 26.6% to $1.9 billion. The average residential home price reached $624,639 this month, an increase of 5.6% compared to May of last year.

Fraser Valley: The number of units sold in May declined 25.1% compared to the same month last year, with 1,531 units sold. Dollar volumes also dropped 25.9% to $662.4 million, as did the average residential home price which declined 1.1% compared to May of last year reaching $432,679.

Chilliwack: May sales declined 39.6% to 239 units, while dollar volumes reached $75.5 million, a 37.6% drop compared to the same month last year. The average residential home price continued to climb in May reaching $315,721, a 3.4% increase compared to May of last year.

Victoria: Sales in May reached 736 units, an 18.6% decline compared to the same month last year. Dollar volumes also dropped 12.4% to $378 million, while the average residential home price reached $514,100, a 7.6% increase compared to May of last year.

Vancouver Island: The number of residential units sold in May reached 725, a decline of 36.5% compared to the same month last year. Dollar volumes declined 32.6% reaching $241.7 million, while the average residential home price rose 6.1% to $333,348.

Okanagan (including South Okanagan): The Okanagan and South Okanagan markets recorded 795 units sold in May, a decrease of 38.9% compared to May of last year, while dollar volumes declined 33.3% to $320 million.

Kamloops: Dollar volumes dropped 35.5% compared to the same month last year reaching $72.4 million in May. The number of sales dropped 40.4% with 238 units sold, while the average residential home price jumped 8.1% compared to May of last year reaching $304,242.

[fenge]

Declining sales, check. Prices are next.

[Vette Dood]

I agree. Get your finances together now and be ready to jump. Later in the year and the start of next year should clarify what is going to happen. For me, I don't want to be putting together everything then, i'll be waiting idle and ready to go.

[projectcivic]

From 1981 to 1982 there was a 43% drop in inflation adjusted SFH prices in Victoria. In 1994 there was a 11% drop. This is from the VREB's own stats.

If there was a 40% correction in housing prices I wouldn't be surprised. It is happening in the US, the UK, India, Spain... why not Canada. Oh wait, prices are already down 10% in Calgary.

I'm not praying for a housing crash--don't get me wrong. Many of my friends have recently bought into the hype and purchased $500 homes as first time buyers. But what if prices go down a modest 10%, and rates start to climb to back up to normal levels?

I'm going to wait and see what happens. The next few months should get really interesting.

Interesting, I am not sure where my numbers came from then cause I cant deny your stats there. Either way, I still don't believe we will see a huge drop in prices, a modest drop maybe but don't expect a $450,000 house to come under $350,000

[Narayan]

Interesting, I am not sure where my numbers came from then cause I cant deny your stats there. Either way, I still don't believe we will see a huge drop in prices, a modest drop maybe but don't expect a $450,000 house to come under $350,000

WOW 450,000 house that aint 20-30+ years old in a good location! TELL ME WHERE!

lol

[fenge]

Interesting, I am not sure where my numbers came from then cause I cant deny your stats there. Either way, I still don't believe we will see a huge drop in prices, a modest drop maybe but don't expect a $450,000 house to come under $350,000

I agree--I just can't see it happening. But it has happened in many other cities around the globe. Almost every large city in the USA except NY and San Francisco has seen a housing meltdown. To continue thinking that we are somehow different or special could be very painful if you're planning on buying a house this year, or next year.

Take a look at this listing (http://www.realtor.com/search/listingdetail.aspx?mlslid=80046732): Sold in Jan 04 for $326K, flipped in Feb 07 for $560K, now listed at $280K. A 50% drop in little more than a year.

I'm not deliberately trying to cherry pick here--there are literally thousands of examples like this across the country.

[Nightwalker]

I like how RS has changed in the past 4 years, haha.

lol no doubt, we're all growing up eh?

[projectcivic]

I agree--I just can't see it happening. But it has happened in many other cities around the globe. Almost every large city in the USA except NY and San Francisco has seen a housing meltdown. To continue thinking that we are somehow different or special could be very painful if you're planning on buying a house this year, or next year.

Take a look at this listing (http://www.realtor.com/search/listingdetail.aspx?mlslid=80046732): Sold in Jan 04 for $326K, flipped in Feb 07 for $560K, now listed at $280K. A 50% drop in little more than a year.

I'm not deliberately trying to cherry pick here--there are literally thousands of examples like this across the country.

I believe that our lending practises are different here in Canada so hopefully we won't see the same mass forclosure rate here. I don't think we are ammune to a crash but I think in a way we are a very different market here in Canada

[sixthgear]

I agree--I just can't see it happening. But it has happened in many other cities around the globe. Almost every large city in the USA except NY and San Francisco has seen a housing meltdown. To continue thinking that we are somehow different or special could be very painful if you're planning on buying a house this year, or next year.

Take a look at this listing (http://www.realtor.com/search/listingdetail.aspx?mlslid=80046732): Sold in Jan 04 for $326K, flipped in Feb 07 for $560K, now listed at $280K. A 50% drop in little more than a year.

I'm not deliberately trying to cherry pick here--there are literally thousands of examples like this across the country.

Don't mix the sub prime mess in the US with Canada. We are going to see some impact, but not the same as them.

[fenge]

I acknowledge that our lending practices are quite different than the states, but subprime mortgages didn't "cause" the housing meltdown. It was just the canary in the coalmine.

[mr.slave]

its only gunna go down so much till people will be all like
holly fuck thats a good deal and start buyin the shit up again.

[Great68]

Maybe I'm morbid, but I can't wait until all the old fart seniors start dying off and their properties start showing up on the market.

[mr.slave]

Maybe I'm morbid, but I can't wait until all the old fart seniors start dying off and their properties start showing up on the market.

they got some nice properties too.:thumbsup::D

[sixthgear]

And the normally have family who want a tonne of cash from those properties. :p

[ostampflee]

^^^ Bingo.

And the estate sale process is more like an auction.

[rental_metard]

speaking of old people croaking and homes going up for sale. a house JUST went up for sale on the 3900 block of Saanich rd. Uphill drive way, white house, the lady that lives there used to have birds, without a cage, and when we used to deliver food there would be bird shit everywhere and the house stunk. So unless you plan on ripping everything up don't even waste your time.

[fenge]

Divide it up into 8 suites, hold until olympics. It's easy!

[Paradox]

i'm actually looking at houses in Prince George of all places, the town is probably about to either fall flat on its face or totally recover from mining, no-one knows. either way i cannot afford to live on this island.

the only good thing about PG is you can get a 4-5 bedroom house with a basement for 200-300k whereas here you are looking upwards of a million.

in vancouver they were saying it takes 76% of your annual income to afford to 'live' whereas northern BC you are only looking at about 32%. then again you have to live in snow most of the year.

[Vette Dood]

Well here is where things now get interesting. No more 100% financing. No more 40yr mortgages. In a housing market where homes for sale are on the rise, sales are down... and now less people are going to be able to qualify / afford a mortgage. If this doesn't have housing price drop written all over it I don't know what will. If you have 5% and can afford a 35yr (note a new 45% TDS, up from 40% normally) I think there is going to be advantages to waiting 6 months.....

http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2008/07/cmhc-drops-100.html

MHC Drops 100% Financing and 40-Year Amortizations

BREAKING NEWS

This will be a big surprise to many. The Department of Finance has just announced that it will no longer back the following:

* 100% financing (5% will now be the minimum downpayment on an insured mortgage)
* 40 year amortizations (35 years will be the new maximum on insured mortgages)

The government will also require the following with all new mortgages it backs:

* A new 620 minimum credit score requirement
* 45% maximum TDS ratio
* New loan documentation standards

The new rules will take effect October 15, 2008. This affects CMHC insured mortgages as well as mortgages insured by Genworth, AIG, etc. Insured mortgages are generally those with less than 20% down. Certain conventional mortgages are also insured, however.

In a statement earlier today, the Department of Finance said, "Today’s announcement marks a responsible and measured approach by the Government to ensure Canada’s housing market remains strong and to reduce the risk of a U.S.-style housing bubble developing in Canada."

These new rules pertain only to new, government-backed insured mortgages. This will not affect existing mortgages

[Buster]

I'd like to dig up an old thread where I was one a a few who were talking about this. Real Estate cycles, it is the way it works. I'm old enough to have seen it happen twice, soon to be three times. If you are in any position to buy I would sit it our for a up to a year.

I watch real estate in Sidney quite a bit and I have seen prices drop and houses sit for 6 months to a year reguarly b/c people/developers are trying to cash in.

Even 5% is too low an amount too put down. Honestly, the interest over 25-30yrs is killer, and only putting 5% down makes sense to the banks but no one else. And at that little of a downpayment, a 10-15% price correction could mean bloodshed.

[Great68]

I'd like to dig up an old thread where I was one a a few who were talking about this. Real Estate cycles, it is the way it works. I'm old enough to have seen it happen twice, soon to be three times. If you are in any position to buy I would sit it our for a up to a year.

I watch real estate in Sidney quite a bit and I have seen prices drop and houses sit for 6 months to a year reguarly b/c people/developers are trying to cash in.

Even 5% is too low an amount too put down. Honestly, the interest over 25-30yrs is killer, and only putting 5% down makes sense to the banks but no one else. And at that little of a downpayment, a 10-15% price correction could mean bloodshed.

Exactly. Although I do not think we will ever see Pre-Year 2000 pricing, the market will HAVE to drop at some point. It's how markets work.

The only thing that seems like a sure bet to never go down these days is the price of oil.

[fenge]

Thank god we closed that barn door before the... hey! Where did the horse go?

[Vette Dood]

Here is a graph of the housing price cycles (see if you can spot them :P ) in victoria:

http://www.alkihaul.com/files/cycle.jpg

[fenge]

The cycles become more obvious if you correct for inflation.

http://img60.imageshack.us/img60/7016/sfd2007dropbd8.jpg

[TouringTeg]

Just saw this on the news and I am suprised.

This is definitely going to have an impact in markets where housing prices are high. A 600,000 house will require a 30,000 downpayment. Like Chris Olsen said on CTV it's the new buyers that fuel the market.

[Black SC2]

Does that tell the whole story though? Are there fewer homes available in the $400k range than in past years, or is the market being padded by an increase in $750k+ homes? When we were looking two years ago, even though the average price on the graph shows around $500k, there was a very large selection at or slightly under $400k from what I remember.

[Vette Dood]

You'd have to go look at the median prices for all those years.

In June, the average price in Victoria was $520k, and the median was $478k. Where in Colwood it was $478k average and $458k median. The Greater Victoria average for June was $520k with a median of $538k, and a 6 month average of $601k. Comparibly the 6month average, 6 months ago was $586k. So this indicates a slight increase still, but based on the longer averages, the increase rate is slowing down and 'hopefully' will level out.
Given all this, you are entirely correct, even though the average house is $601k in GVA, I can assure you there are plenty of homes for sale currently in the $450k to $550k, and for the around $500k there are some really nice places... it is funny to talk like $500k is a value price though :(

[rental_metard]

Do you guys ever watch "house hunters international" on tv? Live here, and drive a civic or move to somewhere in the south and drive an A5. hmmm.....

[gilligan]

A lot to read, but good reads. I bolded what I thought was the most important part. You're comparing to numbers from 2007, which was a RECORD year.


Andrew Duffy

Canwest News Service

Saturday, June 28, 2008

Victoria real estate market gets 'back to normal' as industry sees signs housing boom is over

B.C. affected by U.S. mortgage crisis

VICTORIA -- Real estate sales are down in the provincial capital. The number of sales and the total value are lower, and the real estate industry is seeing signs that Victoria's housing boom is over.

"We are definitely seeing a shift in the marketplace, although it's certainly not a time for panic," said Victoria Real Estate Board president Tony Joe. "For people hoping home values will be plummeting any time in the future, I don't think that's going to be happening any time soon."

Joe said the market has been cool so far in 2008, but that's in comparison to 2007, an "exceptionally busy year when we exceeded all the numbers."

"We're also looking over the last five or six years and what we're finding is things are just coming back to normal," he said.

According to Landcor Data's first-quarter residential home sales summary, the economic malaise in the U.S. fuelled by the sub-prime mortgage crisis is having an effect on B.C. and Vancouver Island.

The Island, Fraser Valley and northern B.C. have all seen the total value of sales in the first quarter drop compared with the first quarter of 2007, the first time all three regions have seen a quarterly decrease in the past four years.

"The cooling-off period is not unique to this region, and not to the province of B.C. The North American economy as a whole has seen a dramatic change in market value in the past year," said Landcor president Rudy Nielsen. "It not only affected the housing prices in certain American markets, but it has been trickling into the demand for homes, the job market and commodity markets around the globe over the past year."

Over the first quarter of this year there were 4,661 sales of homes on the Island, a drop of 11 per cent, while the total value of those sales dropped 1.95 per cent to $1.7 billion.

Provincially there were 26,860 home sales in the first quarter, down 11.8 per cent from the first quarter of 2007, although total value was up 5.6 per cent to $11.69 billion.

"Speculation, both from investors and home owners expecting a major financial payoff, makes housing more volatile than other economic sectors," said Nielsen. "Recently, consumer confidence has dwindled, causing the market to correct. This is the normal real estate cycle and this is what we're seeing throughout B.C."

Derrick Penner

Vancouver Sun

Thursday, July 03, 2008

It's a buyer's market

Typical prices down slightly from benchmark prices in May

Metro Vancouver's real estate markets are officially in favour of the buyers looking for new homes following another month of declining sales and rising inventories, the Real Estate Board of Greater Vancouver has confirmed in its latest report.

Metro Vancouver's real estate markets are officially in favour of the buyers looking for new homes following another month of declining sales and rising inventories, the Real Estate Board of Greater Vancouver has confirmed in its latest report.

Lower Mainland house hunters are now in a buyer's market with prices that have eased slightly off of earlier-year highs, according to the latest report from the Real Estate Board of Greater Vancouver.

The region saw 2,425 sales registered through the Multiple Listing Service in June, the board reported, a 43-per-cent decline from the same month a year ago.

At the same time, owners listed 6,546 properties, an 18 per cent increase from the same month a year ago. On June 30, Greater Vancouver's inventory of unsold properties stood at 18,260, a 54-per-cent increase from a year ago.

And while so-called benchmark prices in June were still up over the same month a year ago, in many markets typical prices were down slightly from benchmark prices in May.

The Greater Vancouver benchmark price for a detached house was $765,654 in June, up 7.3 per cent from the same month a year ago, but down from the May benchmark of $771,250.

"When a market is in buyer's market conditions, there is little upward pressure on home prices," which is reflected in those May-to-June changes Cameron Muir, chief economist for the B.C. Real Estate Association said in an interview.

However, Muir doesn't see any factors that would drive prices down.

Consumer confidence is lower than it was a year ago and Vancouver's high prices have squeezed some buyers out of the market, Muir said, but the region's overall economy remains strong with solid job creation and positive levels of population migration.

"There is no indication, at this point, of any kind of substantial decline in prices," he added.

Dave Watt, president of the Real Estate Board of Greater Vancouver, said the homes that are selling are still selling relatively quickly, but the market is becoming increasingly competitive.

"The buyer sure knows about your competition, because of the power of the Internet," Watt said. "For sellers today, you'd better know about your competition."

Maple Ridge realtor Ron Antalek, with Re/Max Ridge Meadows, said it is the sellers who still try to set new all-time highs with their prices that are watching their properties sit.

"In general, the average [price] is reasonably stable, but not really showing any price increases," Antalek added. "We're seeing sale prices, in some occasions, equal to last year."

Watt said realtors are starting to see more sellers reduce their asking prices.

Fraser Valley markets also showed a slowing of sales and rising inventories that pushed the region into buyer's territory.

Fraser Valley realtors recorded 1,418 MLS sales, a 31-per-cent decline from the same month a year ago.

At the same time, 3,236 new listings hit the market, bringing the valley's total inventory of unsold homes to 11,295, a 47-per-cent increase from the same month a year ago.

The Fraser Valley's average detached house price hit $561,771 in June, a six-per-cent increase from the same month a year ago.

Muir added that he expects to see some balancing out in the market as the year progresses as sellers readjust their expectations and either re-price their properties given today's realities, or pull their listings off the market.


Derrick Penner

Vancouver Sun

Friday, July 04, 2008

House hunters see a slender ray of light

Prices ease slightly as unsold properties are up by 54 per cent over '07

Lower Mainland house hunters are now in a buyer's market with prices that have eased slightly off of earlier-year highs, according to the latest report from the Real Estate Board of Greater Vancouver.

The region saw 2,425 sales registered through the Multiple Listing Service in June, the board reported, a 43-per-cent decline from the same month a year ago.

At the same time, owners listed 6,546 properties, an 18-per-cent increase from the same month a year ago. On June 30, Greater Vancouver's inventory of unsold properties stood at 18,260, a 54-per-cent increase from a year ago.

And while so-called benchmark prices in June were still up over the same month a year ago, in many markets typical prices were down slightly from benchmark prices in May.

The Greater Vancouver benchmark price for a detached house was $765,654 in June, up 7.3 per cent from the same month a year ago, but down from the May benchmark of $771,250.

"When a market is in buyer's market conditions, there is little upward pressure on home prices," which is reflected in those May-to-June changes Cameron Muir, chief economist for the B.C. Real Estate Association said in an interview.

However, Muir doesn't see any factors that would drive prices down.

Consumer confidence is lower than it was a year ago and Vancouver's high prices have squeezed some buyers out of the market, Muir said, but the region's overall economy remains strong with solid job creation and positive levels of population migration.

"There is no indication, at this point, of any kind of substantial decline in prices," he added.

Dave Watt, president of the Real Estate Board of Greater Vancouver, said the homes that are selling are still selling relatively quickly, but the market is becoming increasingly competitive.

"The buyer sure knows about your competition, because of the power of the Internet," Watt said. "For sellers today, you'd better know about your competition."

Maple Ridge realtor Ron Antalek, with Re/Max Ridge Meadows, said it is the sellers who still try to set new all-time highs with their prices that are watching their properties sit.

"In general, the average [price] is reasonably stable, but not really showing any price increases," Antalek added. "We're seeing sale prices, in some occasions, equal to last year."

Watt said realtors are starting to see more sellers reduce their asking prices. Fraser Valley markets also showed a slowing of sales and rising inventories that pushed the region into buyer's territory.

Fraser Valley realtors recorded 1,418 MLS sales, a 31-per-cent decline from the same month a year ago.

At the same time, 3,236 new listings hit the market, bringing the valley's total inventory of unsold homes to 11,295, a 47-per-cent increase from the same month a year ago.

The Fraser Valley's average detached house price hit $561,771 in June, a six-per-cent increase from the same month a year ago.

Muir added that he expects to see some balancing out in the market as the year progresses as sellers readjust their expectations and either re-price their properties given today's realities, or pull their listings off the market.

[sixthgear]

I love the term "single family dwellings". I don't know of many new SFD's that don't have a suite in them. This has been a HUGE trend in the past 5 years (out in the western communities for sure), and as such the price of those houses has gone up because people are getting a very large house with an 'income helper'. This has helped to push up the "single family" average price a bunch in the last few years.

The stats are interesting but you have to remember that they are gathering stats at a high level to enable them to track it long term. They don't really change the stats to match current trends because that would negate any comparison with their historical data.

[fenge]

Does that tell the whole story though? Are there fewer homes available in the $400k range than in past years, or is the market being padded by an increase in $750k+ homes? When we were looking two years ago, even though the average price on the graph shows around $500k, there was a very large selection at or slightly under $400k from what I remember.

Absolutely right--it's a given that the median price will be quite a bit lower. The graph only shows the difference in pricing between two different years. I.e. if average prices rose 80% between 2001 and 2008, the median almost certainly rose by the same amount. The median usually follows the average exactly, just at a lower sale price.

Gilligan: 2007 was a record year, as was the year before it, and the year before it, etc etc. That's what a housing boom (or bubble in this case) is. Nevermind the obvious conflict of interest the sun and province have when it comes to real estate. Front page: "real estate is good!", followed by 10 pages of condo advertisements.

I love it how people call this a shift from a sellers market to a buyers market. How can it be a good time to buy if there's a huge chance your house will tank in value over the next couple years.

[sixthgear]

I love it how people call this a shift from a sellers market to a buyers market. How can it be a good time to buy if there's a huge chance your house will tank in value over the next couple years.

You only care if your house value "tanks" if you need to re-mortgage it. Otherwise what does it matter? The other time is if you have loans against the equity in your house and the bank calls the loan.

If you have either, it isn't a big deal if your house price drops some.

[fenge]

You only care if your house value "tanks" if you need to re-mortgage it. Otherwise what does it matter? The other time is if you have loans against the equity in your house and the bank calls the loan.

If you have either, it isn't a big deal if your house price drops some.

Or if you have to sell. Like if you get divorced, or if you have to move for work, or because of a family member's illness. There are many reasons a drop in the value of your house can destroy you financially.

[sixthgear]

Or if you have to sell. Like if you get divorced, or if you have to move for work, or because of a family member's illness. There are many reasons a drop in the value of your house can destroy you financially.

Sounds like you should always rent then eh. :) Property looks to be too risky.

[Buster]

As far as investments go, you should rent. If you are disciplined you'll have far more cash in the bank in no time. And it makes way more sense for people that need to mortgage their soul to even get close to the median house price.

[sixthgear]

On average Buster, more money is made in real estate by "normal" investors that almost any other form of investment. Most of the other good investments are real estate related (such as investing in mortgage companies).

An example of this is myself. Starting with 10K I know am running a profit of around 200K in just over 4 years. That is very hard to do starting with a low amount of seed money (legally at least) with very little risk. There are tonnes of different stories I am sure, but most of the people I know have all profited (if they decide to exercise their profits) from real estate.

[Vette Dood]

There is a large difference between investing in real estate with money or lower interest financing from private investment institutions and mortgaging yourself to the nuts to buy a property and call it an investment.

Buying a house and taking a high ratio mortgage (95% +) will almost never be a better long term investment then many other investment channels. You can securly make 12% through dividends on investments year over year in comparison to a mortgage at 5 to 6% interest plus property tax, plus maitence, plus plus plus. You would have to return like 20% property value increase year after year for a mortgaged home purchase to be a good investment. However owning your own home has a intagible return that can be measured - living under your own roof.

Yes you can make money mortgaging and catching a huge upswing in the market, but you can do the same in the stock market. However if you catch a down swing in property prices, and your mortgage is huge you are potentialy gambling with someone elses money. Unless you want to ride it out, but then it has just become a long term investment. Catching the property price spike was a great oppertunity for many.. but it could be the same for a lucky stock on any day of the week. The only problem with mortgages as investments and it being your primary residence, you don't really have a cash in option unless you leave the city or go back to renting unfortunatly, which means its hard to keep investing that money in other channels for further profit.

[Nightwalker]

My ducks are in a row and now I'm seriously looking for something, probably for this winter.

[Great68]

This latest trend is great.

One of my buddies bought a condo in Maple Ridge last year, he lined up for 6 hours or something stupid like that to get in on the pre-sales. It won't be built until mid-late 2009.

It's funny because once he bought it he was gloating to me about it, he would be living near "Downtown" Maple Ridge (Come on, how can you brag about Maple Ridge) with a river view WOOOOOOO .

He then proceeded to brag about how his condo's value is going to skyrocket in no time.

Well with the recent news about the way real estate is going, he's not gloating anymore.

My mom works for the Land Title Authority of BC, and she says that they have seen a drop in volume there already.

[fenge]

Sounds like you should always rent then eh. :) Property looks to be too risky.

Haha, I probably sound like it, I know. Truth is I'm fairly risky investment wise.

What I meant is that if you buy at the peak, and the market turns and your house is worth less than your mortgage, you just leveraged that 20K downpayment into 100K of debt. It works both ways right?

I think it is great that you were able to cash in on the market. But, if you don't mind me asking, is your money still tied up in equity? You haven't actually made a cent until you sell.

[fenge]

He then proceeded to brag about how his condo's value is going to skyrocket in no time.

Well with the recent news about the way real estate is going, he's not gloating anymore.

I'm curious about how many of this year's condo presales were bought on the presumption of 40 year mortgages. A shift to 35 years isn't going to hurt that bad, but on top of the interest rate bump we might be seeing next week, this has the potential to finish the condo market pretty quick.

Was it Warren Buffet? The worst reason to buy something is "because it's going up".

[sixthgear]

Haha, I probably sound like it, I know. Truth is I'm fairly risky investment wise.

What I meant is that if you buy at the peak, and the market turns and your house is worth less than your mortgage, you just leveraged that 20K downpayment into 100K of debt. It works both ways right?

I think it is great that you were able to cash in on the market. But, if you don't mind me asking, is your money still tied up in equity? You haven't actually made a cent until you sell.


My money is currently tied up in Equity. I have no need for it at this time so I am not worried about it. And when I need it, it will have grown tax free (with the exception of a small property tax).

You are right, people can lose money in real estate. This is more true if you treat real estate like some day trader looks at the stock market. It has to be viewed with a longer term approach. Victoria is a very good market for real estate investing. It always has been and I think it always will be. Would I try this in Cranbrook, I don't think so because you don't get the returns to the overall upward trend in the pricing.

To each their own when it comes to where they put their money, but I have not seen the stock market perform that well in several years so at this time, I will keep my money where it is.

[fenge]

My money is currently tied up in Equity. I have no need for it at this time so I am not worried about it. And when I need it, it will have grown tax free (with the exception of a small property tax).

You are right, people can lose money in real estate. This is more true if you treat real estate like some day trader looks at the stock market. It has to be viewed with a longer term approach. Victoria is a very good market for real estate investing. It always has been and I think it always will be. Would I try this in Cranbrook, I don't think so because you don't get the returns to the overall upward trend in the pricing.

To each their own when it comes to where they put their money, but I have not seen the stock market perform that well in several years so at this time, I will keep my money where it is.

It sounds like we're having a vicious agreement. If I had looked at the market as a first time buyer in 2005 or even 2006, I would have probably jumped in with both feet. At the 2008 prices, no way. Housing prices appreciate long term, there's no question--but if the current trend continues we'll have $5-million fixer uppers by the time I'm ready to raise a family. It's nonsense.

It looks like BMO, TD and CIBC (I think) have all scrapped the subprim... ahem... 40-year mortgage well in advance of the October deadline.

[fenge]

It seems like a lot of places went up for sale this weekend, especially along Craigflower between Tillicum and Admirals. Signs everywhere.

[projectcivic]

Yeah I noticed that too. Its funny cause everyone is selling in a rush cause of the fear of a crash but they don't seem to relieze they are feeding the lower prices!

[TouringTeg]

The same thing is happening in housing and stock markets. Plenty of sellers and not enough buyers.

I'm in PEI right now and there are beautiful homes on huge lots for 250k. Definitely a different lifestyle out here.

[mr.slave]

Yeah I noticed that too. Its funny cause everyone is selling in a rush cause of the fear of a crash but they don't seem to relieze they are feeding the lower prices!

i bet they do know this.

[sixthgear]

Yeah I noticed that too. Its funny cause everyone is selling in a rush cause of the fear of a crash but they don't seem to relieze they are feeding the lower prices!

This is traditionally a very hot time in the market. There will be houses on the market for sure, but there has not been as many as usual.

[fenge]

This is traditionally a very hot time in the market. There will be houses on the market for sure, but there has not been as many as usual.

Actually, inventory is up more than 25% compared to this time last year. There are a lot more places for sale right now than usual. It doesn't help that sales are down 20%.

http://img136.imageshack.us/img136/2170/n1junenw3.jpg

Graphs from http://www.members.shaw.ca/needinbox/

[Great68]

I wonder how many listings are people who need to sell quick, vs people who are not in a hurry and are fishing their properties to cash in on an investment.

[projectcivic]

Good question, I know of atleast one person who is selling right now with no need to sell. They bought a house 25years ago, used it as a rental for the past 18years and now have gotten tired of the upkeep on it so they are remodeling it and cashing in. They figure its been paid off for the past 5years, they paid $85000 originally so even if they only get $350,000 for it, they are way up

[Nightwalker]

Homebuyers get a break as B.C. house prices flatten
Gillian Shaw, Vancouver Sun
Published: Tuesday, July 15, 2008

"Muir said market conditions favour the buyer in all parts of of the province except for Victoria and northeastern B.C. "

http://www.canada.com/globaltv/bc/story.html?id=15a8eb5b-e2a1-4cf3-a341-130518aa92d1

[Vette Dood]

Fuck Victoria.... lol. It will tail off here too.

[fenge]

Muir is hilarious. A month ago he was calling for 9 percent gains this year. 2 weeks ago it was going to track inflation (gains of what, 3-4 percent?). Today its "fairly flat or drop a couple percent a year".

I don't know how that guy retains any credibility.

[projectcivic]

honestly, you can't take any "experts" opinion as anything more then that, an opinion. No one really knows where things are going. Being a homeowner I believe we are going to see a decline in prices but it won't be as harsh as the american situation and I have a hard time believing anyone "waiting" is going to come out much further ahead then I did by buying last year, I just can't see the prices drop that much. I also believe it will bounce back in a few years and being an owner I still made a wise choice to buy instead of renting. Do I pay more then I did when I rented, yes. Could I have saved more and invested it better then in a condo at this time, maybe but I enjoy calling it my place, to me there is a nice feeling to walk into your own place knwoing no one can say no to a colour choice, etc. And at the end of the day, does everything we spend money on have to be considered an investment? Cause if it does, I guess pretty much everyone on RS is investing their hard earned money poorly.

[Vette Dood]

Like Projectcivic explained, purchasing property is an investment that returns more then just dollers and cents.

[fenge]

No housing bubble in Canada: Flaherty (http://www.financialpost.com/story.html?id=659488) from today

Bernanke: There's No Housing Bubble to Go Bust (http://www.washingtonpost.com/wp-dyn/content/article/2005/10/26/AR2005102602255.html) from Oct 2005

When the government stats denying it, you know you're in trouble.

[projectcivic]

intereseting i guess but i still we are comparing 2 different situations

[fenge]

From The Globe and Mail: (http://www.reportonbusiness.com/servlet/story/RTGAM.20080715.whousing0715/BNStory/Business/?page=rss&id=RTGAM.20080715.whousing0715)

Last month, BMO Nesbitt Burns Inc. economist Douglas Porter raised the possibility of an overall drop in home prices in Canada. Most industry watchers have stayed with the view that home prices will rise slightly this year.

In June, Mr. Porter said it was “unnerving” to note that Canada’s housing market performance appears to be tracking that of the U.S. but with a two-year lag, although he also sees a number of differences between the two markets.

He said he was tracking prices in the “middle ground,” cities such as Toronto, Montreal and Ottawa, which still have fairly robust economic fundamentals but haven’t been supercharged by the commodities boom.

Prices in those cities all rose moderately year-over-year in June, up 3.7 per cent in Toronto, 4 per cent in Montreal and 6.8 per cent in Ottawa.

Take from that what you will.

[sixthgear]

Because this is somewhat of an interesting topic.... The prices and housing market are doing fairly well now.

Source: http://www.vreb.org <-- Victoria Real Estate Board

October 1, 2009

The Victoria area real estate market showed signs of growing strength last month as property sales rose to their highest level for the month of September since 1992 accompanied by modest price increases for single family homes and condominiums. A total of 776 homes and other properties sold in September through the Victoria Real Estate Board’s Multiple Listing Service® (MLS®), up from the 764 sales in August and up nearly 50 per cent compared to the 512 sales in September of last year.

Victoria Real Estate Board President, Chris Markham, says the market has clearly recovered and now appears to be very stable, "The last seven months have shown a steady improvement in sales and price stability. It’s very encouraging when we look back over the past several years and see sales now exceeding typical levels for this time of year."

There were 3,419 properties available for sale at the end of September, down 28 per cent from the 4,754 properties available in the same month a year ago. "We are now seeing some renewed upward pressure on prices as a result of the declining inventory," noted Markham.

The average price for single family homes sold in Greater Victoria last month was $619,936, up from $596,498 in August. Markham noted that the average price was affected by 24 sales of over $1 million. "These included five sales of over $2 million, three in Saanich East, one in Victoria and one on the Gulf Islands which had a significant impact on the overall average price," he stated. The median price increased $10,000 to $550,000. The six-month average was $581,498. The overall average price for condominiums was $325,106 last month, up from $317,312 in August. The average for the last six months was $311,546. The median price for condominiums in September was $295,000. The average price of all townhomes sold last month was $441,966 down from $455,430 in August. The median price dropped slightly to $415,000. The six month average was $426,521.

MLS® sales last month included 437 single family homes, 197 condominiums, 79 townhomes and 15 manufactured homes.

2 year Graph of average selling prices (monthly)
http://www.vreb.org/pdf/vrebgap.pdf

**There are several things in Sept that play into the increased average price (such as sales over 1 million), but looking at the chart, it is interesting.

[ChrisStang]

Excellent. I have been up to my armpits in home renos for about a year now, with the end still fairly far off. Looks like I'll be getting back some return on my investment though which is nice.

[Enraged]

of course VREB is going to say everything is fine, their livelyhood depends on it. the only reason that the market didnt tank was the Bank of Canada dropped rates to the lowest ever... the next year should be interesting, rising canadian dollar, tanking us dollar, rising interest rates, rising unemployment....

[sixthgear]

of course VREB is going to say everything is fine, their livelyhood depends on it. the only reason that the market didnt tank was the Bank of Canada dropped rates to the lowest ever... the next year should be interesting, rising canadian dollar, tanking us dollar, rising interest rates, rising unemployment....


Do you want the economy to tank? Just wondering

[ostampflee]

Rising unemployment, say what?

Stats Can disagrees with you:
http://www.cbc.ca/money/story/2009/10/09/unemployment-rate-jobless-statistics-labour.html?ref=rss

[Enraged]

Do you want the economy to tank? Just wondering

In terms of housing, yes. House prices are completely out of whack with wages, and it's not sustainable. If prices continue at this rate, 25 years from now a $500k house is going to be $10,000,000. Is that sustainable?

Realistically, it won't tank, but values could likely go down 10-20% and then probably remain flat for a number of years.

Rising unemployment, say what?

Stats Can disagrees with you:
http://www.cbc.ca/money/story/2009/10/09/unemployment-rate-jobless-statistics-labour.html?ref=rss

One month does not a trend make. Thats also national. Also keep in mind that those stats don't include people who have given up and aren't looking for work, have dropped to part-time, etc. A few things I have read say it's closer to 17% in North America. Plus with the US dollar dropping, Canadian manufacturing could take a hit in the next few months.

Also, we are different here: http://www.timescolonist.com/business/Victoria+jobless+rates+climb+while+rest+country+se es+more+employment/2086671/story.html Sad to see that we are nearly double the unemployment number from this time last year.

I'm of the opinion that things will get worse before they get better, but it is up to an individual to decide for themselves when/if to buy. I just don't want my friends buying into something they can barely afford, only to find 5 years from now when their fixed rate 4% mortgage jumps to 6%, that they can no longer afford the payments, and their 35 year mortgage means they haven't built up any equity.

Again, it's up to the individual to weigh both sides of the argument and decide for themselves. For many, it is worth the risk, for me, it's not.

[projectcivic]

I understand where your coming from but if your friend can't afford the payments at 6% compared to 4% then he should have never bought in the first place. He was already living beyond his means. No amount of doom and gloom can stop that type of idiocy. (sp?)

[ostampflee]

In terms of housing, yes. House prices are completely out of whack with wages, and it's not sustainable. If prices continue at this rate, 25 years from now a $500k house is going to be $10,000,000. Is that sustainable?

Realistically, it won't tank, but values could likely go down 10-20% and then probably remain flat for a number of years.



Nobody said the market wouldn't slow down and I'd say a $500k house is more than affordable for a couple with established careers. Condo's are still more than affordable for the younger bunch... not everyone gets to have a 2500sqft house with a pool for their first home.



One month does not a trend make. Thats also national. Also keep in mind that those stats don't include people who have given up and aren't looking for work, have dropped to part-time, etc. A few things I have read say it's closer to 17% in North America. Plus with the US dollar dropping, Canadian manufacturing could take a hit in the next few months.

Also, we are different here: http://www.timescolonist.com/business/Victoria+jobless+rates+climb+while+rest+country+se es+more+employment/2086671/story.html Sad to see that we are nearly double the unemployment number from this time last year.

I'm of the opinion that things will get worse before they get better, but it is up to an individual to decide for themselves when/if to buy. I just don't want my friends buying into something they can barely afford, only to find 5 years from now when their fixed rate 4% mortgage jumps to 6%, that they can no longer afford the payments, and their 35 year mortgage means they haven't built up any equity.

Again, it's up to the individual to weigh both sides of the argument and decide for themselves. For many, it is worth the risk, for me, it's not.

Trends start somewhere and if you actually read the article, the gain was due to new full time employment, not part time as you suggest. Last year you couldn't throw a rock without finding a job. When McDonalds was offering $12/hr and benefits to flip a burger, there was obviously a shortage of workers. That's obviously corrected itself, and 6% unemployment isn't that far from the norm. Besides, don't a lot of the tourism based industries do substantial _seasonal_ layoffs right about now?

I travel a lot, and the slight correction we've seen here is nothing compared to other areas. I don't notice many vacant buildings here but everywhere else I go, there's lots of 'em.

[Black SC2]

Manufacturing has taken a shit already. Vic Ship just laid off 200+ workers in the past few weeks. From what I hear in the welding circles, a lot of the bigger fab shops are running on low staffing levels. I popped in at the boilermakers' hall last week, and the lady there told me things are as slow as she's seen them in 10 years. Not to say we aren't going to see improvement this coming year, but things are still tight for a lot of people.

[Enraged]

I understand where your coming from but if your friend can't afford the payments at 6% compared to 4% then he should have never bought in the first place. He was already living beyond his means. No amount of doom and gloom can stop that type of idiocy. (sp?)

I completely agree. Now you have to wonder how many people are in the same situation? Or worse yet, borrowed money for the 5% down...

[Enraged]

Nobody said the market wouldn't slow down and I'd say a $500k house is more than affordable for a couple with established careers. Condo's are still more than affordable for the younger bunch... not everyone gets to have a 2500sqft house with a pool for their first home.

I agree, but when the median house price is 7x median family income, something has to give.



Trends start somewhere and if you actually read the article, the gain was due to new full time employment, not part time as you suggest. Last year you couldn't throw a rock without finding a job. When McDonalds was offering $12/hr and benefits to flip a burger, there was obviously a shortage of workers. That's obviously corrected itself, and 6% unemployment isn't that far from the norm. Besides, don't a lot of the tourism based industries do substantial _seasonal_ layoffs right about now?

True, trends have to start somewhere. My comment regarding part time and such was that the stats in that article (all in general, all unemployment numbers) don't usually include part time jobs, etc, so the "true" unemployment number can often be higher than the reported number.

If you look over the TC article I posted, not all the jobs lost were in seasonal employment, there were other areas like tech jobs as well.

[Enraged]

Manufacturing has taken a shit already. Vic Ship just laid off 200+ workers in the past few weeks. From what I hear in the welding circles, a lot of the bigger fab shops are running on low staffing levels. I popped in at the boilermakers' hall last week, and the lady there told me things are as slow as she's seen them in 10 years. Not to say we aren't going to see improvement this coming year, but things are still tight for a lot of people.

Vic ship just lost a fairly large govt contract, but I was under the impression they were still busy. That sucks.

[Enraged]

10% YOY drop on new house prices in Victoria according to Statscan: http://www.statcan.gc.ca/daily-quotidien/091013/t091013a1-eng.htm