Thursday, May 31, 2007
I wish that CMHC would release these reports sooner. Today's report is for April, while tomorrow is June. April is old news already.
The big news is the large number of starts in April, combining with the current high level of construction in Greater Victoria. There are currently 3010 housing units under construction, a 45% rise over April of 2006. However, year to date, there is a 17% decrease on the number of units absorbed. Looks like overbuilding to me.
CMHC reports the average price of single detached dwellings from VREB statistics, however, they remove waterfront, acreage, duplex, and manufactured homes. This provides quite a different number for the average price. CMHC's average SFH price for April was $524600. VREB's average SFH price was $568710. That's a difference of $44100. Any ideas why CMHC removes those homes from the equation?
A quick chart comparing CMHC to VREB numbers for SFH average selling price.
Wednesday, May 30, 2007
It turns out that the big banks will not approve mortgages for these homes, as they do not control the home in the event of a foreclosure. In such a case, the home is returned to the affordable housing pool, and resold at the original selling price. However, there are other lenders willing to take on those mortgages.
I'd assume that those same banks would approve a mortgage of that size to the same family if it was for a home not in the affordable housing pool. Like a beast waiting to devour, the bank would take possession of that foreclosed house. I must be a little naive, because it doesn't quite make sense to me. I guess that in a rising real estate market, the banks believe that they would profit from controlling a foreclosed home. As is happening in the U.S., in a falling market, lending standards are getting tighter, and perhaps that same family would not get mortgage approval regardless of whether the home is an affordable housing pool home or not.
The related news article can be found here.
Info on the affordable housing program can be found here.
Monday, May 28, 2007
Saturday, May 26, 2007
Month end is upon us this upcoming week. My sales number and price predictions have no basis and are usually wrong, therefore I'm not going to bother. However, it's safe to say that active listings are continuing to rise. In mid-May, CFAX1070 had it's weekly real estate cheerleading bit with a representative from VREB. The rep said that at that time, there were 3500 active listings in Greater Victoria. Based on their statement, and how the listing numbers are looking from this month, I'd say that the number of active listings for the region in May will ring in around 3600. Last year, there were 2900 active listings. That equates to a 24% rise year-over-year.
For comparison's sake, what's the difference in population to active listings ratio between Vancouver and Victoria (I like how Bubble Markets Inventory Tracking does this). My numbers won't be exact. Greater Vancouver - population (2006) 2181000. Listings (from Chipman) 12077. Ratio = 1:181. Greater Victoria - population (2006) 345000. Listings (from MLS today) 2262. Ratio = 1:153.
Well, maybe it's not that significant. Interesting, nevertheless. Another comparison. Phoenix currently has a ratio of 1:68. We have a ways to go.
Tuesday, May 22, 2007
Total number of units - 5187. That's some serious inventory. My count of the number sold is 984. Don't put much stock in that number. As you can see, there are a lot of question marks throughout the table.
My thoughts - the developers are still on full throttle, straight ahead! Are they right about the future of Victoria's housing market? They are vesting a LOT of financal resources. These are smart people, they know what is happening in the US, yet they must feel that things will be different here. I don't know. Seeing the developers propose more and more, it makes me question my stance. However, when I look at the numbers, the inventory, the quantity of units sold, I think they must be crazy. Maybe they aren't. The next couple years will be very interesting. Enjoy!
|Bayview Phase I||Victoria||101||?||2008||?||W||VV|
|Bayview Phase II||Victoria||?||?||2008||?||W||VV|
|Bayview Phase III||Victoria||?||?||2008||?||W||VV|
|Synergy - Dockside Green||Victoria||100||?||2008||?||-||VV|
|Balance - Dockside Green||Victoria||100||?||2009||?||W||VV|
|Mayfair Walk||Victoria||30||26||2007||250- 430||W||-|
|Redstone Townhomes||Victoria||9||1||2007||501- 620||W||-|
|The Breakwater||Victoria||19||5||2007?||379- 510||W||-|
|The Falls||Victoria||155||?||2009||578 -?||W||VV|
|The Palladian||Victoria||29||5||2007||350- 522||W||-|
|The Gateway at The Railyards||Victoria||62||23||2007?||383- 502||W||-|
|The Chelsea||Victoria||66||22||2008?||545- 850||W||-|
|The Adria||Victoria||21||?||2006||441- 481||W||-|
|The Harriet Gardens||Victoria||24||24||2007||315- 334||W||-|
|Cherry Bank Hotel Condos||Victoria||51||?||2008||?||-||-|
|The Leiser Building||Victoria||?||?||?||?||W||-|
|The SoHo||Victoria||15||8||2007||363- 446||W||-|
|The Hudson Tower I||Victoria||178||?||2010||?||W||VV|
|The Hudson Tower II||Victoria||129||?||2012||?||W||VV|
|The Hudson Tower III||Victoria||85||?||2013||?||W||VV|
|Oak Bay Beach Hotel||Oak Bay||?||?||2009||?||W||-|
|Admirals Landing||Esquimalt||40||5||2007?||348- 478||W||-|
|Swallow’s Landing||Esquimalt||110||?||2007||535 - ?||W||VV|
|The Greenside at Gorge Vale||Esquimalt||36||36||2007?||360||W||-|
|The Ironwood at Gorge Vale Phase 4||Esquimalt||8||7||2007?||364||W||-|
|The Anchorage||Esquimalt||41||?||?||380- 621||W||-|
|Carey Hill Walk||Saanich||38||24||2007||322- 412||W||-|
|Oak Street Village||Saanich||37||9||2008?||290- 473||W||-|
|Richmond Gate||Saanich||54||36||2007?||343- 490||W||-|
|The Julia||Saanich||30||?||2007||372- 420||W||-|
|Tuscany Village||Saanich||91||51||2007||430- 484||W||-|
|Sayward Hill||Saanich||34||20||2007?||384- 645||W||-|
|Viewmont Heights||Saanich||46||19||?||308- 466||W||-|
|Carriage Point||Central Saanich||26||?||2007?||369||W||-|
|Holly Farm Townhomes||Central Saanich||15||10||2007?||?||W||-|
|4570 Elk Lake Drive||Central Saanich||47||?||?||?||-||-|
|The Pier||North Saanich||70||?||2007||581- 618||W||VV|
|Pacific Place Condos||North Saanich||10||?||?||?||W||-|
|The Meadows||North Saanich||59||?||?||?||W||-|
|Harbour Landing||North Saanich||5||?||?||575- 725||W||-|
|The Aspen||View Royal||75||?||2008?||340- 400||W||-|
|South Valley Estates Townhomes||View Royal||19||2||?||250||W||-|
|Royal Roads Place||Colwood||163||?||2009||?||-||VV|
|Wale Road Tower||Colwood||?||?||2009||?||-||VV|
|Aquattro Tower I||Colwood||?||?||?||?||W||VV|
|Aquattro Tower II||Colwood||?||?||?||?||W||VV|
|Aquattro Tower III||Colwood||?||?||?||?||W||VV|
|The Lookout at Royal Bay||Colwood||30||?||?||?||W||-|
|Hatley Ridge||Colwood||12||?||?||212- 262||W||-|
|McConnell Place||Langford||46||?||2007||312- 357||W||-|
|The Strathmore||Langford||45||18||2008||263- 348||W||-|
|The Deville Phase III||Langford||8||8||2007||200- 299||W||-|
|Jacklin / Sooke Road Tower||Langford||?||?||2009?||?||-||VV|
|St. Andrew’s Walk||Langford||135||135||?||?||W||-|
|Tara on Deville||Langford||?||?||?||?||W||-|
|Casa Bella Townhomes||Langford||21||4||?||214- 251||W||-|
|The Way Townhomes||Langford||20||?||?||234||-||-|
Saturday, May 19, 2007
Their 2008 at a glance:
- Victoria's housing markets buoyed by strong economy.
- Resale market sales to edge down, prices to inch up.
- New homebuilding to ease in 2007-08.
- Higher new home prices.
- Rental vacancies low.
I can appreciate their breakdown on page 3 of MLS House sales by market. For interest sake, I quickly calculated the price per square foot for each region. They are as follows:
- Victoria City - $251 / ft2
- Oak Bay - $270 / ft2
- Esquimalt - $222 / ft2
- Saanich East - $221 / ft2
- Saanich West - $199 / ft2
- Central Saanich - $208 / ft2
- North Saanich - $238 / ft2
- Sidney - $236 / ft2
- West Shore - $197 / ft2
Not surprisingly, West Shore and Saanich West are the least expensive on a square footage basis. What does surprise me a little is that Esquimalt is more costly than Saanich East.
CMHC's forecasts include decreasing sales through 2007 and 2008. They also forecast a decrease in listings for 2008. I think they base this forecast on there being a decrease in construction activity and thus new listings in 2008.
They are forecasting a 15% decrease in new SFH building this year, with an increase in 2008. All other home types are forecasted with a decrease in new construction.
Prices are forecasted to rise, with 2008 having an increase in line with current inflation numbers.
Rental prices will continue to rise and vacancy will remain tight, loosening ever so slightly in 2008. I can't agree with that, as affordability for home purchasing is not getting any better, according to their home price increases. Unless home renters start moving away, rental vacancy will not loosen.
Finally, they see 5 year mortgage rates as increasing through 2008.
A lot of CMHC's forecasts appear to be quite conservative. They aren't stepping out on a limb with any bold predictions. They see the economy and housing continuing to hum along for the next 18 months. This may be, but with what's happening in the US, and the world in general, I'm expecting things to not go quite so smoothly.
Inventory of homes with asking prices of more than $700k continues to skyrocket. 36.6% of all SFH listings on MLS are in that price range. On the million dollar home front, there are 7 more listings on MLS this week, bringing the total to 184.
Listings of condos and townhomes appear to be flat over the past couple of weeks.
- Through an email service of a local realtor, I received a newsletter this week where the top article was on the "Secrets to making a lowball offer". I had a good snicker.
- How did you like the usual full page ad today in the TC for Tuscany Village? "Priced well below appraised value."
Friday, May 18, 2007
To compare, 5 out of 59 people list Vancouver in their top five places to live. 0 out of the 59 people list Victoria.
This statistic comes from a very statistically accurate source - the comments on Housing Panic's website. Check it out here.
Of course, this is silly. I think most of us Victorians love our city. If we didn't, there certainly wouldn't be much reason to stay!
Tuesday, May 15, 2007
Is this something that we need to be doing more of? Should we be preaching on the street corner that house prices are too high, that renting is cheaper than buying, that North America's economy is in for a rude awakening? When friends talk about jumping into this market with heavy hearts, I try to tell them that there is no shame in waiting it out. Things will get better. We have to believe that. We have to have faith!
There are many signs out there that things are awry. I love the following sites because they remind me to stay strong.
Irvine Housing Blog's Anatomy of a Credit Bubble
Priced Out Forever's Action Page
Don't Buy Stuff You Can't Afford
Today's housing market is as much out of context as the Scripture above. I do believe that we can have an impact by telling others that high prices and unaffordability are not here to stay. The bottom line is - don't do something foolish out of fear.
Saturday, May 12, 2007
The number of listings for three bedroom SFH and townhomes continues to rise. Listings for two bedroom condos appears to be all over the map. There has been a large decrease in the last two weeks.
I'm suspecting that this month is shaping up to have a decrease in average price for SFH. The reason being that inventory of high priced homes is building rapidly, while lower priced home inventory is not. Through this, I'm lead to think that homes with sub-$500k prices are selling in higher quantities than home with the higher prices. I could be wrong - I usually am.
Tuesday, May 8, 2007
Housing starts for Victoria for the year thus far are 15% higher than the January - April period of 2006. April was a big month for Victoria, with 300 new starts, 193 of them being condos in Victoria proper.
"Victoria's under construction volumes have now reached their highest level since September 1976, meaning this generation of builders is experiencing their busiest year ever," said Peggy Prill, Market Analyst at CMHC Victoria.
The Metro Victoria Condo Supply graph is amazing. More than 2000 units under construction! However, the graph shows nearly 0 as inventory. I don't understand that.
Wow, the highest level of home construction in 31 years, more than 2000 condo units under construction. I'm very curious as to what the construction related employment numbers are like for our city. Does anyone have access to this information?
Most of Victoria's large condo developments are due for completion within the next 3 years. As buildings are completed, will new buildings and developments take their place? Are we at a permanently high construction level plateau? If not, what will all the people with construction related jobs do when development slows? I'm guessing that Wendy's and Tim's will have an easier time filling their job vacancies.
Sunday, May 6, 2007
From yesterday's numbers, let's assume that there were 1653 SFH listed in April. I've been tracking the number of SFH listed on MLS for over $1 million for a couple weeks. Yesterday, we had 169 SFH listed with asking prices of $1 million or higher. This represents 15.5% of all SFH listings. 15.5% of April's 1653 SFH listings is 256 listings. According to VREB, 28 SFH sold for over $1000000 in April. This gives us 9.1 months of inventory for SFH priced over $1000000.That is definitely a buyer's market!
Attention! Everyone in the market for buying a $1 million dollar home - name your price to the seller, because their home is going to be sitting for a long time! Everyone selling a million dollar plus home, you'd better be sharpening your pencil if you truly want to sell your house!
And yes, the asking price for this home is $1.15 million. There are almost 5 acres, but seriously! Get real!
Saturday, May 5, 2007
The number of listings for SFH priced above $500k continues to rise faster than SFH listed under $500k.
I'm trying to wrap my head around some stats based on April's numbers and today's SFH "asking price" dollar range percentages. The median selling price for SFH in April was $489000. Therefore, more that 50% of SFH sold for less than $500k, less than 50% of SFH sold for more than $500k. Based on the number of listings on MLS today, 36.8% of SFH have an asking price of <= $500k, 63.2% of SFH have an asking price of >=$500k.
Some of the following numbers are estimates, but I think the general idea will come across. Based on my calculations, approximately 50% of the listings for Greater Victoria on MLS are SFH. According to VREB, there were 3305 active listings in April. Let's assume then that 50% of the active listings were SFH, 1653.
Using today's MLS percentage numbers, if there were 1653 SFH listed in April, 36.8% will have been listed for under $500k. This gives us 608 SFH under $500k. 63.2% will have been listed for over $500k. This gives us 1045.
467 SFH were sold in April. The median was $489000. More than 233.5 SFH sold for less than $500k, less than 233.5 SFH sold for more than $500k. For simplicity, I'll use those numbers. SFH under $500k, 233.5 sales, 608 listings, this equals 2.6 months of inventory. SFH over $500k, 233.5 sales, 1045 listings, this equals 4.5 months of inventory.
What does this all point to? Price compression? Sputtering upper-end? A seller's market? Perhaps a number of things. A quick search on the web regarding months-of-inventory and 6.0 came up as the MOI switching point between seller's and buyer's markets. This leads me to believe that based on April's numbers, Victoria's Real Estate market is still a seller's market, with homes priced under $500k very much favouring sellers. Homes prices over $500k are moving closer to a buyer's market, but not yet there.
Spring is a busy selling season. The MOI should move closer to a buyer's market over the summer. However, for a major shift, we will need significantly more listings and / or fewer sales.
Tuesday, May 1, 2007
SFH hit a record high for average sales price. $568,710 - that's a chunk of change. In fact, if you were to buy that average home with loonies, it would take 3981 kilograms of loonies! There were 28 sales of $1 million+ SFH. The VREB's prez had the decency to mention that this skews the average. Quick calculation - if the 28 high-priced SFH that sold for $1 million each (which they didn't) were taken out of the SFH average, the new average would be $541201. That's just below last months average. Average selling price in each region other than Saanich West and Central Saanich was higher than the rolling six month average. The number of sales for April was higher than last year, but lower than April 2005.
Median sales price for SFH for Victoria proper was higher than last month, however, median sales price for the CRD was lower than last month by $1000.
The average sales price for condos in April just squeaked in higher than the six month rolling average. The sale of 15 waterfront condos helped pull the average higher. Number of sales was strong in comparison to April last year - 238 in 2007 vs. 188 in 2006.
There were more townhomes sold this April than last April as well. Average selling price was marginally higher than the six month rolling average.
Regarding active listings, the number is getting higher and higher. There were approx 700 more listings this April than last - a 25% increase. We are about 150 listings less than the peak last September. May 2006 was a big listings month. If May 2007 is also a big listings month, we'll smash through last years' record listings no problem.
In looking at the numbers more closely, they aren't as strong as I had originally thought. However, I was surprised at the quantity of sales. I admit, I spend way too much time on MLS. I see the same houses each day. That is a bit of an exaggeration, but, based on that, I thought there was going to be a low sales number. I'm guessing that houses that sell, sell fast. Houses that don't sell, sit there a long time.
The Bears have yet to score a point this year. The Bulls have kicked another field gold. The score is now Bulls 16, Bears 0. Hopefully we get a game out of this one. The real $64000 question is whether the Canucks can give us a game to cheer about!