CMHC "Housing Now" Report for July

First things first, for VG, here's the front page of the Edmonton Sun from earlier this week.

CMHC has released their "Housing Now" report for July. Housing starts for July 2007 were up 116.5% from July 2006. Year to date, starts are 18.9% higher in 2007.

Housing units under construction has the wow factor. There are 3278 housing units currently under construction in Greater Victoria. This is 52% higher than last July. Of that number, 2252 of those units are condos!

CMHC's average SFH selling price dropped slightly from June to July. Looking at their sales-to-active listings ratio, it appears to still be a sellers market. The townhome and condos markets are not quite as hot as the SFH market. Average selling price showed a month-over-month drop for both townhomes and condos.

Alberta's Wealth Rollercoaster

Hat tip to anonymous at 5:21pm. How do like the front page of the Edmonton Sun today? I dare say, it will be a cold day you-know-where before the local media puts a title like this on their front page!

The whole article can be found here. Average sale price in Calgary continues to drop as well.

Remember buddy here who bought two condos at Bear Mountain last fall? Unless he is independently wealthy, how long before him, and the tens of dozens of other Albertans, Americans, Irish, whoever, that bought condos out here as investments, start to sell off their properties because their artificial wealth back home has whithered away? How long before our active MLS listings hits 4000, 5000, 6000??? When will it start to skyrocket? And how high will it go?










Perhaps, an applicable analogy is to liken our current listings inventory to a rubber band. It continues to be stretched until finally, it's released, and away it goes!

August 25 Week Ending Stats

Single family home listings on MLS.ca are up slightly this week. The largest increase saw 8 more homes listed in the price range of $300k to $400k. There are 11 fewer homes listed in the $400k to $500k range.

Year over year, MLS.ca listings of 2 bedroom condos and 3 bedroom SFH are down significantly from last year. 3 bedroom townhomes listings have decreased since June, but are still up year over year.

Here's a good article to read in the New York Times regarding Countrywide Financial Corp. Housing Panic rants on about this company and it's CEO. I think it's justified. He has not bought a share in his own company since 1987! I'd bet on Countrywide going belly-up. Any guesses on what impact that would have on housing and real estate in Canada?

Writer's Block

Sorry folks. I haven't been posting or writing or much of anything lately. I've recently switched positions at work and have been coming home pretty beat. I've got a little case of writer's block and I feel a little real estated out.

I'm getting tired of the constant cheer leading of the local real estate market by the media. I can't comprehend how they can say, in the same breath, that the U.S. market is so up the creek, but here in Victoria, prices will NEVER go down!

I have been enjoying the stock market roller-coaster over the past couple weeks. I'd sure love to be able to drink coffee and watch CNBC all day. It's like watching a basketball game!

I'm also finding the Alberta market quite interesting. Inventory is through the roof in Edmonton (and Calgary). Calgary's Real Estate Board has a 30 day rolling average selling price. It's been going down the past couple weeks. It was over $500k (up to around $507k I believe), and currently sits at $491k. I wonder if Alberta's market will be a sign of things to come for us.

Please carry on with the great comments! Thanks!

August 18 Week Ending Stats

The number of active listings of SFH in Greater Victoria continued to decline this week.

- There are 969 SFH currently listed on MLS.ca
- This is 34 less than last week.
- This is 207 fewer listings than our recent peak on June 23 (there were 1176 SFH listings that day)

Houses are either selling or people are delisting their homes. I believe that it is the former. Sold stickers continue to be plastered against realtor signs. The market below $600000 continues to be quite hot, while above $600000, not so hot. I don't have proof, but that's what it appears to be.

It's quite perplexing how inventory is decreasing at this time of the year. Late summer and heading into fall, inventory should be increasing. I think Vancouver is seeing the same happenings. Rob Chipman's inventory is down from the peak of 2 months ago as well.

Possible reasons - a run on the market since interest rates appear (or appeared) to be rising. Perhaps it's the ever increasing popularity of 40 year mortgages. Yet more moms and dads are helping their kids. Any other ideas?

I've added another blog link under "The Nationals" section at the side. Titled "Canadian Mortgage Trends", it looks to contain some good bits of information.

Condemnation

A couple of note worthy articles in today's TC.

Four Rental Buildings Condemned. The landlord refuses to perform any upkeep on the buildings, and voila! Let's tear down the buildings and do something different - build luxury condos!

Unbuilt Building Condemned. Well, not quite. The Wing condo project in Vic West continues to be an eyesore, yet the local community association doesn't appear to want to do anything about it. I don't get the statement from Diane Carr "... it's not the community's obligation to make up for a bad investment on the part of the investors. That's not our problem." Alright, then forget about offers from developers who want to do something with that mess, and enjoy your eyesore!

I think that Victoria is being overbuilt at this time, however, I would sooner have a building, that perhaps doesn't please everyone, than an eyesore empty concrete-laden lot. My $0.02.

What do you think?

A local developer has approached me with an idea of theirs and would like some feedback. I offered to post their idea, and ask your opinions of it. Here goes...

A new home has been built in the city - 2000 sq. ft., maple, granite, wired for home theatre, all the good stuff. Rent would be set at $2500 / month. After one year, the renter would have the option of using their rent paid during the year ($30000) as a down payment on the purchase of the home. The home has an asking price of $500k. If the renter provides an additional $30000 for the down payment, the developer will borrow the renter an additional $40000 (at a 9% interest rate) for down payment. Total down payment would then equal $100k. As this is 20% of the purchase price, the purchaser qualifies for a conventional mortgage.

What do you think?

July Housing Starts and June New Housing Price Index

CMHC has released July housing starts numbers for Vancouver Island and Victoria. For Victoria, July 2007 housing starts were more than double that of July 2006. Year-to-date, housing starts in Victoria are up 19% in 2007 over 2006.

B.C., as a whole, and nationally, housing starts are down.

Statistics Canada has released the New Housing Price Index for June. Victoria had the second lowest price increase from June 2006 to June 2007, at 0.5%. The lowest price increase belongs to Windsor, ON, at -2.3%.

Go figure. In Victoria, housing starts are up, and prices are stagnant. The rest of Canada is seeing price increases, yet housing starts have decreased. Supply and demand? Looks like it.

Focus on SFH Sales

As I did for condos and townhomes, I've made a few graphs for SFH sales and median prices for Greater Victoria, Victoria, Langford and Saanich.

The number of sales of single family homes in Greater Victoria is higher this year than 2005 and 2006. Median sale price is increasing, and has not been negative year-over-year since 2005.

The City of Victoria has had high sales numbers the past couple of months. The median sale price is down from earlier this year. June's median sale price was negative year-over-year.

Langford has had an average number of SFH sales thus far this year. The median sale price is increasing.

Saanich home sales have been on a tear the past two months. Median sale price is consistently increasing at around 10% year-over-year.

All regions' year-over-year median price increases (%) have risen from late 2006 and early 2007. It's difficult to determine a definitive pattern due to our small market. There have been very few year-over-year monthly decreases since 2005.

I plan to have graphs for other municipalities in the future. Hopefully this provides a little food-for-thought.

August 4 Week Ending Stats

Due to what appeared as irregularities in the number of listings on the new MLS.ca website, I haven't been posting weekly numbers. However, I have been recording the numbers, as funky as they seem.

My graph for 2 bedroom condos, 3 bedroom townhomes, and 3 bedroom SFH is now over one year old. The number of listings for condos and SFH is lower today than it was one year ago. Townhome listings are up from last year. Inventory in all three segments has dropped over the past month.

The number of SFH listings on MLS.ca has dropped over the past month in every price segment except in the $600k to $700k range. The number of homes available for under $500k continues to steadily decrease. Woe to the first time home buyers.

The percentage of SFH listed for over $700k continues to rise. Is there an end in sight? Today, 71% of SFH listed on MLS for Greater Victoria have an asking price of $500k and higher. Woe to the first time home buyers.

The obvious correlation between the rising median price of SFH and SFH listings is simply that there is nothing available for under $500k!

FTB, give your collective heads a shake! That $390000 POS 2 bedroom shack is not worth it!

The Effect in Canada

I wanted to quickly throw out this link to everyone. Finally, the MSM has published an explanation of how whats happening in the U.S. will affect Canada. It's from the Halifax Daily News.

Hat tip to Housing Doom. Thanks.

July Sales Numbers

The VREB's sales numbers for Victoria for July show that the local real estate market continues to be both resilient and oblivious to what is happening south of the border. The numbers of sales this July blew away previous July numbers. It was the highest number of sales for July in 15 years. Greater Victoria saw higher average and median prices for SFH. Condo prices dropped, townhome prices were a mixed bag.

Year over year, the median price of a SFH in Greater Victoria is up 17.4% Last July's median was $438500. This July, $515000.

The number of SFH sales in Saanich continues to amaze me. This July, 150 sales. July 2005 and July 2006 had 113 and 110 sales, respectively.

Condo sales for Greater Victoria appear to have plateaued. Quantity of sales is consistent, prices are rising ever so slowly. This has to concern the developers who have hundreds of units available for sale.

The number of townhomes sold this July in Greater Victoria was the highest monthly amount for the years of which I have data (2005 - 2007). Year over year median prices are up 8.5%. Again, Saanich sold townhomes like they are going out of style. 47 this July. 23 and 17 the previous two Julys.

With the number of active real estate listings having decreased in July, prices should remain steady for the coming couple months. Inventory, according to VREB, is up only marginally from last year. Taking this into consideration, I'd say, don't expect to get any deals on SFH priced less than $500000.

I'd have to disagree with HHV, this was a month for the bulls. Listings down, sales up, prices up. I'm giving the Bulls a field goal. Score: Bulls 26, Bears 3.

In Canada, specifically Victoria, it's still tough being a bear.