CMHC "Housing Now" Report for September

CMHC has released their September 2007 edition of "Housing Now" for Victoria. It can be viewed here.

Highlights include:
- 17.8% fewer starts in September 2007 versus September 2006.
- 21.9% more units under construction this September versus last.

There was a significant average price increase between August and September.

The poll on the sidebar has produced interesting, yet not surprising, results. Most readers of this blog are bearish on real estate, but there are some bulls out there. I think that 2008 will be a critical year for real estate prices. If there are no price declines next year, I will probably start to believe that this time it is different.

October 27 Week Ending Stats

The number of listings on MLS.ca is down this Saturday in comparison to last Saturday. There are 22 fewer SFH, 11 fewer townhomes, and 17 fewer condos.

I'm gonna go out on a limb this week. I'm calling Victoria's average SFH sale price in September ($584193) as the peak average price for Victoria for the next couple years. With winter coming, what's going on in the U.S. and Alberta, and rising mortgage rates, I think we've hit the top. April 2008 will be the first time since March 2007 that Victoria has a year over year decrease in average SFH price. Average monthly prices for the summer of 2008 will be lower than the summer of 2007.

Of course, I am 100% amateur, and have nothing riding on this prediction (aside from house prices moving further from my affordability level if I'm wrong). Put only as much stock into this as you want.

As I write, I have friends bidding on a house in Victoria. As strongly as I feel, I try not to influence their decision. If I am wrong, and they hold back because of me, thus falling further behind the rising prices, I'm partially responsible. I don't want to be. Everyone needs to be responsible for their own decisions. If you are comfortable with the numbers, go ahead and seal the deal. I think that good things will come to those who wait.

Update: My friends bidding on the house did not get it. Reason being - after offers were supposed to be in, the selling realtor continued to show the house, and tell new interested parties what the current high offer was. It's pretty easy to place the highest offer when you know what second place will be. The ethics of some in the realtor profession continue to disappoint me.

October 20 Week Ending Stats

SFH listings on MLS are down slightly this week. Here's a new graph for perspective on how the SFH market has changed from one year ago. I'll probably continue to graph SFH listings numbers in this format from now on.

Condo listings continue to rise. 1243 condos listed on MLS this morning. There were 1214 last Saturday, 1181 two weeks ago, 1138 three weeks ago. This rise in condos listings will put the VREB month end active listings numbers above September 2007 and above October 2006. I think we may actually come close to our peak listings from June of this year. This would put the market at six months of inventory.

In the circle of people I know, a few of them have mentioned that they think the market is softening, and are debating on putting their homes up for sale. They don't need to sell, but if they can get such and such a price, they would sell. That's fine for them, but I don't think that approach is selling homes today. A home in Victoria needs to be very competitively priced to sell quickly. This appears to also apply to new condo and townhome developments.

Take Casa Bella townhomes in Langford in comparison to the townhomes of Reflections, The Pearl on Hillside, and Richmond Gate. Casa Bella has sold like hotcakes, the others are not, to say the least. Casa Bella homes are the same size or larger, and priced less than the others. It doesn't surprise me that they have essentially sold out (21 - three bedroom units). Reflections has not sold one townhome, The Pearl has sold 2 of their 5, Richond Gate has sold 2 of their 6.

I know this sounds like a plug for Casa Bella. It's not intended to be. I think they represented value for your money compared to others. That's what it takes to sell in today's market.

I wonder how long the developers (or whoever put the initial investment forward) of Tuscany Village, Richmond Gate, The Breakwater, The Julia, and others, can hold out before we see some real price decreases.

What a relief!

Phew! What a relief! Boy, I'll be able to sleep good tonight!

Why, you ask? Well, it's because Re/Max has released their 2008 housing market forecast. I'm now ready to jump on board and buy the biggest house I possibly can. This is because it's going to rise in value by 5% next year. That's more than my savings account is getting! Besides, 5% of $500000 is a gain of $25000. Yippee, our real estate market has legs! And this is despite everything that is happening around us!

Seriously, why is any stock given to reports like this. The TC of course eats it up. Even if by fluke they are right, it's a totally biased report. It's totally useless. If even CMHC's numbers are suspect, how can a real estate firms' report be given any validation?

Sorry about the lack of blogging these days. I think I've hit the October doldrums. No, I've had those for a while. Real estate is getting a little boring. I want to see some action. Lets' see some price drops, crashes, and other signs of desperation. I don't want to see people get hurt, but my patience is growing thin.

October 13 Week Ending Stats

The number of condo listings on MLS.ca for Greater Victoria was significantly up again this week. From reading the daily hotsheets, the increase appears to have been partially caused by the additional listings from the new Radius residential project. The number of two bedroom condos available on MLS has increased by 57 in two weeks.

SFH listed on MLS is up by 7 this week, but the total number is still down from previous weeks. Today, there are two SFH listed for under $300k. One year ago, on October 14, there were 33. Today, there are 83 SFH listed for between $300k and $400k. One year ago, 227.

August New Housing Price Index

Stats Canada has release the New Housing Price Index for August.

The price of a new home in Victoria rose 0.4% between August 2006 and August 2007. Of the cities surveyed, this was the third smallest increase. Windsor (-2.8%) and Charlottetown (0.2%) lead the way. Canada as a whole had an increase of 6.5%.

September Housing Starts

CMHC has released the housing starts numbers for September. For Victoria, more starts than in August, less than September 2006, fewer year to date in 2007 than 2006. Canada-wide, it was big news.

A sizzling condominium market propelled Canadian housing starts in September to their highest level since 1978, a 19.6 percent monthly jump, which well exceeded analysts' expectations.

Perhaps I'm naive, but I don't quite get it. The housing market in the U.S. is officially in the tank. 50/50 chance of recession there. Good chance we follow. Our population growth isn't exactly setting land speed records. Is it just plain cool to have two or three properties under your belt? Are Canadians still speculating? Who's buying or going to buy all these properties???

October 6 Week Ending Stats

MLS listings were up and down this week. There are 43 more condo listings today than there were last Saturday. I believe this is largely due to the release of units at the new Radius development. Kudos to them for listing on MLS. This will increase the month end inventory numbers, and thus give a truer picture of the number of homes that are for sale, unlike those condo developments that have hundreds of units for sale, but their inventory numbers are not taken into account by the VREB because they are not listed on MLS. Shame on them.

Single family home listings are down by 27 this week. Victoria is definitely not having the run-up in SFH inventory like cities in Alberta are. This leads me to think that SFH in Victoria are built for home-dwellers, not speculators. Otherwise, we should be seeing more of a rush to the exit, as evidenced in Alberta. Barring external forces, the SFH market should remain steady for a while to come. I wouldn't say the same for the condo market.

I meant to post this earlier in the week. There was an interesting article in Macleans regarding a possible coming recession, titled "Can you say recession?" Hat tip to whoever pointed it out to me - I wish I could remember. If you have the time, give it a read.

September Sales Numbers

I've now officially been forever priced out of the market!

Just kidding - that happened a long time ago!

Well, September numbers are out. My guesses were close. Total sales = 632. Total inventory = 3381 listings. Average prices up month over month in every category. Average prices up year over year everywhere. It's very reassuring that "There were 17 single family home sales of over $1 million and this had a significant impact on the overall average. Nearly a quarter of all single family homes sold for less than $425,000." Thank goodness for that!

Due to a shortness of time this evening, I'm gonna let the graphs do the talking.

Condo sales graph.

Townhome sales graph.

Single Family home sales graph.

Months of inventory graph.
Oh yeah, 3 points for the Bears. It's the end of the 3rd quarter. Bulls 26 Bears 13.