CMHC "Housing Now" Report for March

CMHC released the March edition of "Housing Now" for Victoria today. It can be found here.

Items of note:

• Housing starts year to date are nearly equal for 2006 and 2007.


• Units under construction year to date are way up for 2007. Most notably, condos are up 55.3%.


• Units completed and not absorbed are up 35% year to date.


• Months of inventory based on March 2007 numbers - SFH 2.22, townhomes 2.87, condos 3.12

I'd disregard the months of inventory for condos, as so many condo developments do not have their units listed on MLS. Based on the CMHC numbers given, the March MOI for SFH and TH are quite low. However, I'm confused with their numbers. A quick sum of the CMHC active listings for March equals 1827. VREB states that active listings for March were 3079. What gives?

April 28 Week Ending Stats

Once again, month end is nearly upon us. From an outsider's viewpoint, it appears that there has been a nice inventory increase in April. Based on MLS.ca listings, March 31 had 1021 single family homes listed. Today there are 1085 SFH listed. The largest jump came this last week. There are 51 more SFH listed this Saturday than last Saturday. Regarding all MLS.ca listings for Greater Victoria, there are 185 more property listings today than there were on March 31.

There were MLS listing increases for SFH in each price range this past week. Most noteworthy, there was an astounding 50% increase in SFH listed for under $300000! There are now a whopping 15 homes listed under $300k! Nine of those 15 are in Sooke. Great! Inventory of high-end homes continues to climb. 377 SFH are priced over $700k, with 165 of those being over $1 million.

As a percentage of all SFH listed on MLS, homes with an asking price of between $500k and $600k saw the largest increase this past week. There are 18 more listings on MLS in that range. A one percent increase for that price range was the result. 62.7% of all SFH listed on MLS have an asking price of $500k or higher.

How will April's VREB stats look? My best guesstimate - sales between 750 and 800, total MLS listings around 3300. Prices - SFH average up slightly ($550k), condo average below $300k, and townhome average $380k - $400k. That's my best shot in the dark. I hope I'm wrong on the prices. What's yours?

BCREA Housing Forecast for Victoria

The British Columbia Real Estate Association released it's first semi-annual housing forecast report today. It can be found here.

The conspiracist inside me poses a question. The question is not in regards to the content of the report. That can be discussed later. The question is, why has the BCREA come out with a housing forecast report, and why now?

Is it because they are seeing the market move in a direction that does not benefit them?

Perhaps, the purpose of the report is to renew buyers' confidence in the market. The report states that despite the shift in housing market conditions, "it is a gradual return to a balanced market". People need to hear this over and over again to feel confident in the market, and then go out there and buy that big house. I'm no different. If I keep hearing "it's a balanced market", "prices will keep rising", and "the economy is strong", I'll believe it and get mortgaged over my head. However, if the contrary is spoken, along the line of what Robert Shiller is saying these days, and then heeded, well, I'm gonna find a nice house to rent, and sign a 5 year lease.

Why did the BCREA not start putting out housing forecast reports 1, 2, 5 years ago? (or did they?) Is it because the market needed no pumping up back then?

From the BCREA website, on who they are, "The British Columbia Real Estate Association (BCREA) promotes the interests of the real estate profession on behalf of its member boards". The BCREA represents Realtors. Their profession suffers in a declining market. They have a vested interest in the real estate market. Therefore, their reports need to be examined with scrutiny.

Now to the report itself. Sales down, prices up. 'Nuf said.

Discounted Condos

We are seeing developers reducing their condo prices to make the sale. Two examples I've noticed in the past week.

1) Tuscany Village - For months, their full page ad in the Times Colonist stated how units have been held at June 2006 prices. This past week, in celebration of their on-site show suite, prices have been "temporarily" reduced. We'll see how "temporary" those prices are! Did anyone check out what the discounts were like?

2) Reflections in Langford - The website for Reflections has prices starting at $299,900. For months, the lowest priced unit on MLS for the development was $289,900. Today, there is a unit on MLS for $279,900. That's a $20,000 discount. Aren't you glad you didn't buy when it was first released! Won't you be glad in the future when you look back to your decision today to wait a little longer!

Any other discounted condos out there? I'm betting we'll see discounts at Carey Hill Walk, McConnell Place, the Juliet, and others. Just you wait...

April 21 Week Ending Stats

The number of homes listed on MLS for under $300000 declined again this week. Perform a quick search on MLS for SFH under $300k and you'll find only 10. Number of homes in the $300k - $400k range has been steady since January. There has be an gradual increase of homes available for between $400k - $500k since the low point in early January. Inventory of homes between $500k and $700k has been quite flat this year. For the first time since January 6, there are fewer homes listed this week than last with a price tag higher than $700k. However, the number of million dollar plus homes increased this past week.

Two bedroom condo listings jumped by 57 this week. I haven't investigated the reason behind this. I'd assume it was the release of a condo development to general MLS listings. Three bed SFH and townhome listings were flat.

I'm definitely noticing more front lawn realtor signs in my neighbourhood. Most of them are condo listings. I think that if you are serious about selling your home these days, you have to set your place apart from the rest. Either you need a smokin' price, or there has to be excellent value for the buyers' money. Unless you start with a steal of a deal, the days of flipping are over.

Selling via Realtor = Higher House Price?

Are people who are selling their homes justified in threatening the general public with an increased asking price for their house when they are forced into listing with a realtor?

I don't get it.

Today on Craigslist, the owners of a home in Royal Oak threatened us all that this was the last chance for us to buy their house privately, in their words "LAST CHANCE - We will be listing with a realtor next week and the price will be going up!"

I saw this same scenario play out earlier this year. A private house sale in Atkins was listed on Craigslist and UsedVictoria. They started at one price, lowered it after a while, then threatened that they were going to get a realtor. It didn't sell, they then listed with a realtor for their latter asking price. It still didn't sell, they lowered the price. It did finally sell, I believe for less than any of their asking prices.

What makes a home seller think that if their house does not sell privately for a certain price, that it will sell for a higher price when listed with a realtor? What makes the seller think that I may not be willing to buy their house at today's price, but I will buy it tomorrow at the realtor's higher price? Who these days, when buying a house, is not looking at Craigslist, UsedVictoria, and the TC on their own time?

Another Great Blog

I'm sorry Boss, I killed my lunch half-hour (and a little more) laughing at another great blog site poking holes in the Vancouver bubble. I think that we could have similar ad-euphemisms here in Victoria.

Check it out - condohype

April 14 Week Ending Stats

Based upon listings available for viewing on MLS, I'm seeing two trends take place. The first trend is a continued decline in affordability of SFH. The second trend is an increase in inventory of entry level 2 bedroom condos and 3 bedroom townhomes.

Today, there are only 11 SFH listings on MLS for under $300k. That is 1% of all SFH listings for Greater Victoria. I look at $300k as the ceiling for affordability for an average family earning an average income. With a 25% down payment, the average family would have a mortgage of $225k on a $300k SFH. 25 year amortization and a 5.25% interest rate would yield a monthly payment of $1341. Adding in taxes and utilities, that family would likely be looking at monthly obligations of between $1600 and $1700. Considering these numbers to be 32% of that family's gross income would require $60k to $64k annual income. There is next to nothing available in SFH for the average family in Victoria today!

Listings of SFH with an asking price of greater than $700k continues to increase. There was an increase in SFH listings for all price ranges except SFH less than $300k and SFH between $500k and $600k. There are 157 SFH with an asking price of $1 million or higher available for your MLS viewing pleasure. Enjoy!

Regarding the second trend I'm seeing, there are 39 listings of two bedroom condos for under $200k this week. That is the same quantity as last week. Of note, that is the most listings since I started recording in August of 2006.

There are 22 listings for townhomes under $300k this week. There were 27 sub $300k townhomes on October 14, 2006. Last September and October, Victoria had record levels of active listings. Today, we do not have the number of active listings as we did last September / October, however, we have nearly as many townhomes available for under $300k.

The following chart is simply an update of housing categories I'm personally interested in.

I believe that what we are seeing continues to point to the next year or two being very interesting for the Victoria housing market. It really looks like we are teetering on the edge. Hey, if you're looking for something to do this weekend, check out the following video. It's been mentioned a number of times in the comments. It's the roller coaster ride for the U.S. housing market.

March Housing Starts

CMHC released statistics for Vancouver Island March housing starts yesterday. It can be found here.

For Victoria, new housing starts in March of this year were down significantly from February and from March of last year. Year-to-date housing starts are around the same for this year and last year.

Of note, there were 79 housing starts for greater Victoria. 20 were in Langford, 11 were in Sooke, and 10 were in Victoria proper.

What do you make of the housing starts figure? I don't put too much value on one month's numbers. If the monthly starts continue to be low, then some speculation could be made that something is happening in the industry. However, one low month doesn't say much.

April 7 Week Ending Stats

There are a some interesting items from this weeks' gleaning of the listings on MLS. First, the number of three bedroom townhomes that are listed is at the highest number (124) since I started recording last July 8. Second, listings of two bedroom condos took a dive this past week. Condo listings appear to be nearly flat so far this year, which surprises me. However, listings of two bedroom condos with an asking price of less than $200000 is at the highest number (39) since I started recording. Admittedly, a lot of those condos are fractional ownership.

Thirdly, availability of SFH with an asking price of less than $300000 is at the lowest level since probably forever. There are only 13 homes listed for less than $300000. As a percentage, this is 1.28% of all SFH MLS listings. Flip side, the number of homes listed with an asking price of higher than $700000 continues to grow. There are currently 367 homes listed in that price range. There are 149 SFH with an asking price of $1 million or higher!

All SFH price ranges saw a decrease in listings this past week, except for the SFH with an asking price higher than $700000. Unfortunately, I can't say whether that is due to expiries, sales, or removal of listings. Is the market at a standoff between sellers and buyers? Or do the number of sales closely match the number of new listings? It would certainly be nice to have the inside scoop on what is happening. My apologies that I cannot provide such information.

62.6% of SFH listings have an asking price of $500000 or higher. Ouch.

March Sales Numbers

I think I may try being a bull for a while, not a bear. I was surprised by the March numbers. Sales for SFH were down only marginally from last year, down about 100 from March 2005. Listings, as we expected, are up. What got me was the median price for the region - $489900! That's not the average - that's the median! I had thought that the houses above $500k were sitting - maybe not.

I really don't know what to think of the numbers, other than there is still strength in the market. The US housing market has been suffering for a while now. I would have thought it would be spilling over somewhat by this time. Apparently not. Not yet, at least.

Here's the updated graph for median prices for Victoria proper and the Capital Region District.

What's next? Will April's median be over $500k? Will the average price for 2007 be a double digit increase from 2006?

Perhaps real estate is local, always goes up, they aren't making any more land, and it's truly different here. NOT!

I know that not everyone agreed with the football game score that I gave last month. That's fine. This month, maybe it's my delirious confusion, but I think I saw the Bulls score a touchdown. End of the first quarter, score - Bulls 13, Bears 0.