June 30 Week Ending Stats

This week had a decrease in the number of single family home listings on MLS.ca for Greater Victoria. The largest decrease in listings were SFH with an asking price higher than $700000. There was in increase in listings of SFH with prices between $300k and $400k and between $500k and $600k.

Condo listings on MLS.ca appear to have spiked, however, that may be due to the new search feature. It appears that townhomes are sometimes included in the results when searching for condos. Last week had 547 - 2 bedroom condo listings. This week - 612.

Tomorrow is July. VREB will likely release the June sales numbers on Tuesday, the 3rd. I have a gut feeling that the number of sales for June will be over 900. Driving around town, there appear to be a lot of "Sold" signs. A sales number of 900 would be nearly a 20% increase from last year. I think that inventory will also have increased, but not by much. Regarding prices, I don't have the faintest idea. This blogs commenter's say that property sales are selling for under list. This doesn't necessitate a decrease in average selling price though. I'm looking forward to the numbers in a couple days.

Have a great long weekend! Happy Canada Day!

CMHC "Housing Now" Report for May

CMHC released the May edition of "Housing Now" for Victoria, yesterday. You can find it here.

There wasn't much new news reported in the report. Victoria's condo construction remains at a 30 year high. Regarding all forms of housing, year to date starts are 11.7% higher than last year. The number of units under construction this May was 55% higher than May 2006. Yet, the number of units absorbed year to date are down 26.3% from last year. There is going to be a major glut of units come on stream in the next couple years. I honestly believe the developers are building too much, too fast, too soon.

Here's the graph of average SFH sale prices comparing the numbers from CMHC and the VREB. CMHC's average is lower because they remove waterfront, acreage, duplex, and manufactured home sales.

Focus on Townhome Sales

Some generalizations can be made regarding townhome sales in Greater Victoria over the past couple years - marginal median price increases, slightly declining sales numbers. However, the only consistent aspect of townhome sales in individual regions is their inconsistency. Some months have brought huge sales numbers, other months, very small sales numbers. Some months, huge year-over-year median price increases, others, large negative year-over-year prices.

The volume of townhome sales in Greater Victoria since 2005 has decreased ever so slightly. Median sales prices have risen marginally during that same period of time.

The City of Victoria had more townhome sales in 2005 than 2006 and thus far this year. The median price was all over the graph in 2005. 2006 and 2007 have not seen any real median sales prices increases.

In Langford, townhome sales numbers are showing monthly increases this year over previous years, with the exception of May of 2006. Median prices have been steadily rising.

Saanich has seen consistent townhomes sales over the past 2 1/2 years. The monthly median price flip-flopped back and forth in 2005 and 2006. 2007 has seen a monthly year-over-year price increase each month. December 2006 had a very distorted median price due to very low sales volume.

Finally, year-over-year percent increases of median sales prices. There is no obvious trend. I would attribute this to there having not been a huge run-up in sales prices of townhomes since 2005. Even with the continued building of luxury properties, the median price of townhomes have not risen as substantially as that of single family homes. Or have they?

June 23 Week Ending Stats

My apologies, my Saturday graphs must be getting very boring already. They appear the same every week. But believe me, every Saturday morning, I glean MLS.ca, put the numbers into my spreadsheet, and create a new graph. The trend is the same every week. Rising inventory of expensive homes, stable inventory of lower priced homes. Expensive homes continue to be a larger percentage of the homes for sale, while "entry level" homes' piece of the pie chart continues to decline.

This week, 23 more SFH listed on MLS. Notably, 9 of them in the $500k - $600k price range, 9 of them priced above $700k.

The percentage of homes for sale with an asking price of less than $500k continues to decrease. Only 32.7% of SFH listed have such an asking price.
There are 199 SFH listed today with an asking price of $1 million or higher. For comparison, Calgary, with nearly equal real estate prices and 3 times our population, there are 253 SFH listed for $1 million and above.

My rant today. We all know that the run-up in prices was due to low interest rates, the mass media, deceptive realtors and alternative mortgage options. I've probably missed pointing my finger at someone. Today, all of the sheeple have become complacent and accepted that today's prices are realistic and, simply put, that's the price of a home. I don't believe that out-of-towners and baby boomers are buying up our average single family homes with plans of retiring to them in the coming years. Why would they buy a house now, then have the house and yard sit empty for months on end (assuming they'd live here for only part of the year)? It makes much more sense for them to be buying condos and townhomes - low maintenance properties. Thus, Victoria's rise in SFH prices is the fault of people living in Victoria. Now, as inventory rises, and prices stay the same, again it's the fault of the locals. Luxury condos built for out-of-towners is an entirely different market. Why are young families murdering their futures by taking out $400000 mortgages? Because we've been deceived that it's a necessary evil to having your own home! Something has gotta give...

Today's Cartoon

Hat tip to the Times Colonist for today's cartoon. Is this the TSN turning point?

On another note, phase 4 of the Railyards development has a price review underway. I'd say, 90% chance prices are going down, 10% chance prices are going up.

Which development is next?

Deception!

I'm outraged! The latest ad for Reflections in Langford is absolute and total deception! The ad states that you can now buy a 2 bedroom condo valued at $334900 for zero money down, thus giving you a $995 monthly payment for the first twelve months (whatever that means!). First of all, zero money down is a poor financial decision (we are now NO different than what went on in the U.S.). Secondly, $995 a month, yeah right. Put into a mortgage calculator the $334900 purchase price, 40 year amortization, 5.99% interest rate, what do you get - $1823.23 a month! What the...!!! I wonder, is it Peter Gaby or the developers sensing a serious downturn that are willing to pay for half your mortgage for the first year!

People, don't do it! It's all lies!

Sorry, I've gotta take some deep breaths here. If Gaby and/or the developer wanted to maintain a stitch of integrity, they'd simply lower the prices and present the real purchase numbers. However, they know that to present that same monthly mortgage payment, even with the 40 year amortization, the price of that particular condo would have to be $183000. Wow, that's almost reasonable!

June 16 Week Ending Stats

Inventory of MLS.ca listings are up this week. There are 23 more SFH listings this Saturday than last Saturday. The largest increase in inventory is homes priced above $700000.

I've been tracking the number of listings of 3 bedroom SFH, 3 bedroom townhomes, and 2 bedroom condos for nearly 1 year. The number of listings of 3 bd SFH and 2 bd condos are nearly at the levels of last summer. Listings of 3 bd townhomes are more than double last year at this time.

With the rising interest rates this past month, will this affect your mortgage payments or spending habits? Do you know of family and friends that are concerned / not concerned about the rising rates?

CTV had an online poll on whether an interest rate hike was welcomed to slow inflation. 65% of respondents did not welcome the interest rate hike. I think this is indicative of the current household mortgage situation - people's lives will be affected by rising rates. As a non-mortgage holder, I certainly welcome the rising rates, as I believe that inflation is much higher than the Bank of Canada is depicting it as. Inflation affects everyone, not just homeowners.

Statscan New Home Prices

With regards to new home prices, Victoria is leading the country. Not in the year to year increase, but rather, the year to year decrease! New home prices have fallen 1.2% between April 2006 and April 2007. In fact, they fell 0.9% between March and April of this year! The only other city to have an annual decrease in prices was Windsor.

I'm not dreaming this up. These are Stats Canada figures that were released today. You can read it here.

Edmonton remains on a tear. Up 40.5% in the past year. That's gonna be a painful fall. Wait, I thought everyone wanted to live here!? Once again, apparently not.

I doubt that the local media will be reporting on this one...

May Housing Starts

CMHC has released the housing starts numbers for Victoria for May. You can find them here.

There were 138 housing starts in May. The majority of them came in Langford and Colwood. There were slightly fewer starts in May 2007 than in May 2006. However, for the year to date, housing starts are up nearly 12%.

We continue to see construction volumes not seen since 1976. If you build it, they will come? We'll see. I think there's a storm brewing out at sea.

June 9 Week Ending Stats

MLS single family home listings took a drop in the first days of June. The number of listings rebounded slightly this past week. SFHs listed are not at the level they were at the end of May. The number of SFH listed for under $500k continues to decreases, while the quantity of SFH listed for above $500k continues to increase.

Where will the rising trend of expensive home listings end? More than 38% of SFH listed have an asking price of more than $700000. Will there at some time be more than 50% of SFH listings with an asking price higher than $700k? Are all asking prices migrating upwards, or are the expensive SFHs not selling?

Even as the number of luxury SFH listed continues to increase, the median sale price of SFH for Greater Victoria has decreased the past 2 months. This points to a weak high-end SFH market, and strong demand for entry level homes. (I don't believe a $400k home is truly an entry level home. Simply, that's what double income no kid couples are willing to take on as a mortgage.) The day that people start to listen and believe that these are ridiculous prices is the day that things change.

There were 184 SFH with a million dollar plus price tag available today.

Focus on Condo Sales

Using stats given by the VREB, I've done up graphs of median condo sale prices and condo sales numbers for Greater Victoria, Victoria proper, Saanich, and Langford. I was hoping that by creating these graphs, I'd have some great revelation. I didn't, but you might.

Greater Victoria has shown quite consistent sales numbers for the past 2 years. It appears that the median price has or is peaking, as increases since last summer have been marginal.

Victoria proper has seen strong sales thus far this year. There are still some significant year-over-year median price increases.

Sales in Saanich (East and West), with the exception of February and April, have been slightly less than previous years. Median prices appear to have stalled out as well.

Langford sales, thus far this year, have been similar to the past two years. Of course, May 2006 was an anomaly. Prices have been all over, but do appear to still be rising.

I've also thrown together a graph for the year-over-year median price increases. There is definitely a downward trend. This past month, Langford had the first YOY negative median price increase.

May Sales Numbers

The Victoria Real Estate Board released the May sales statistics today. I definitely appreciate the promptness of VREB in releasing the monthly numbers. Thanks!

So, sales are up, listings are up, but prices are down slightly. If the average SFH selling price was about $200000 less, I'd say Victoria was in a pretty good real estate / housing market position. However, average and medians are still ridiculous.

I expected the monthly inventory to be higher than it was. Active listings for May was 3462. With the high number of sales, 963, we currently have 3.6 months of inventory. According to that, we are still in a seller's market. However, if you add to the inventory the thousands of condos and townhomes you could buy today but are not listed on MLS, the picture changes.

Saanich, Sooke, and Langford had busy SFH sales months. It's pretty amazing how the real estate face of Langford is changing. Can you believe that the average selling price of a home in Langford (let's say it with a twang) is over 1/2 million dollars! Some of those homes on Bear Mountain must be selling. It surprises me because watching the listings for the region on MLS is like watching Fred Flintstone run past the same rock and window over and over again.

Victoria proper didn't have a huge number of SFH sales, and the median and average prices took a hit. Again, there was a significant number of waterfront homes sold, skewing the numbers.

The condo market is showing signs of softening. May 2007 had a drop of 11% in sales versus May 2006. Also, even with the increased sales number for this past month, 11 fewer condos sold in May than April. Average selling price was $6000 less than the 6 month average. I've heard others say that the first market segment to show signs of weakness in a declining housing market is the condo market. I'd say that we are seeing that now.

Townhome sales were strong in May - 83 sales with an increase in average selling price. There were 20 townhomes sold in Saanich East!

I'm happy to announce that I didn't go into a bout of depression after reading this months numbers. As "strong" as they were, this was a bearish month. Inventory is continuing to rise, affordability is going nowhere, and we know that interest rate hikes are coming. Prices dropped slightly, but it was nothing that I am going to write home about.

The Bears are on the scoreboard with a field goal. The score is Bulls 16, Bears 3, with 5 minutes left in the 1st half.