New Post, YEAH!

Ok, here's a new post.

Picked up today's Macleans. Front cover was the housing bust. Read it online, it's ok.

I've been enjoying Garth Turner's posts these days. Seems that since he lost his political seat, he has much more time for his blog. Maybe he found his calling.

Oh yeah, real estate in Victoria. At this point, it looks like February average SFH sales price should come in around $520k, median at $485k. Total SFH sales should be around 200 for the month, big improvement over January, a far cry from previous Februaries.

Thursday Freebie

Lots of discussion and comments over the past week - good time to have a create a new post.

Front page of the Financial Post website right now has the following four articles.
- Canadian Housing in "Sustained downturn"
- Construction plans plunge, StatsCan reports
- House sales slip, prices stable
- Housing slump hits home

Also, from the Globe and Mail - Victoria's market is 30 to 35% overvalued.

Wow, everyone is so negative all of a sudden. Go figure! Have they been reading those bear blogs???

The Housing Boom is Officially Over!

Thanks to anonymous for mentioning this occasion on Craigslist.

Yes, according to The Globe and Mail, and specifically Douglas Porter, deputy chief economist at BMO Nesbitt Burns Inc., the housing boom in Canada is now officially over. First quarter statistics are what helped him come to that conclusion.

Certainly, we are seeing this in Victoria. Inventory is ballooning and sales are the lowest in years.

Will we follow in the footsteps of our neighbours south of the border? Perhaps. Perhaps not. But the market is definitely not what it was in the previous 2 or 3 years.

Discuss away!

Slow Growth, Cool Market

Front page of today's TC had articles regarding Victoria's economic growth and real estate market. HouseHuntVictoria has insight on the related article in The Globe and Mail.

Victoria's economic growth to slow - rather significantly as well. 2006 had growth pegged at 3.7%. 2007 is forecasted at 2.8%.

Real estate market expected to cool over the long term - Victoria's current market is 10% above trend, according to Scotia Economics' Adrienne Warren. Quote from Cameron Muir "... it is reasonable to expect that when this current cycle is over that home prices will moderate for a while in order to give household incomes a chance to catch up with the pricing regime."

Does this mean that I may not be priced out forever?! Is today maybe not the best time to buy? Perhaps the future is better than the present for getting into the market. I'm surprised by Mr. Muir's statement. He may be starting to see the light.

What is news... Part 2

Real estate has again made it on to the front page of the Times Colonist. Jack Knox has made an attempt to present the "other side" of the coin. He did bring up the affordability issue caused by today's prices, which can be appreciated. And, of course, the old cliches "Victoria is the place people want to be" and "It's paradise here" were thrown in. I can't totally disagree with those cliches, but they do discourage me. If the housing market does not change, Victoria may become a modern day setting of the apocalyptic movie "Children of Men", where the youngest person in the city is around 20 years old. Families can't afford to live here, and yet, having been caught yesterday afternoon in the horrendous Colwood crawl, I'd hate to live in the Western Communities or up Island if a daily commute into downtown Victoria were required. Better mass transit or a couple overpasses on that highway are long overdue! What a sad state of affairs.

Quick check on what level of income is required to purchase that house. Feel free to correct me if I'm wrong. With an asking price of $325000, how about a 20% down payment ($65000) to avoid CMHC. Then using an amortization period of 25 years, with a 5 year fixed term of 6.18% (from RBC), on a mortgage of 260000. This equates to a monthly payment of $1687.

If the mortgage payment is 32% of pre-tax income, monthly income required is $5272. Annual income required is $63264. It looks like it would be possible for a young family to purchase that home, but I can't see them being happy there for long.

What is News?

After spitting my morning coffee all over the front page of today's Times Colonist, I decided that my vacation was officially over. I could be silent no longer. It was time to get back on the blogging horse.

What is news? Wikipedia defines news as "...any new information or information on current events which is relayed by print, broadcast, Internet, or word of mouth to a third party or mass audience." Is the absurd asking sales price of a piece of personal property news? Is it worthy of the full front page of a newspaper with a circulation of 73000? Perhaps, if items for sale with stupid asking prices are indeed newsworthy, I should inform the Times Colonist that I have a broken wristwatch, which originally I purchased for $140, now for sale for $9700!? Now, that is newsworthy! NOT! Neither is the sale of the Oak Bay mansion on today's front page newsworthy. A beautiful home. Definitely. Worthy of the front page of the Homes section in Saturday's paper. Sure. But, please! Give it up!

HHV's blog on today's issue is priceless. Thanks HHV.

I am getting very tired of the coverage of the real estate market by the MSM in Canada. Is anyone else?

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

Canada's Strong Housing Market

The Globe and Mail's real estate article today is a comparison in housing market strength between Canada and the U.S. - "Canada's Housing Sector Defies US Trend."

Now that the monthly stats have come out, it does appear that the housing market is not yet declining or degrading in most Canadian cities - Victoria, Vancouver, Edmonton, Toronto, etc. Trends are pushing the market into more of a buyer's market, but the collapse has not yet happened.

We all know about the situation in the US. Things are pretty bad, and I feel sorry for the poor schmuk who got all pumped up after watching "Property Ladder" on TLC, went out and made a huge sub-prime mortgage, hired some cheap labour, and now is stuck with his or her McMansion. Well, maybe by now the mortgage lender is stuck with it, or perhaps the mortgage lender has imploded already. If I had been in a position one year ago to attempt a house flip, I may have. Shoot, if the people on that show could make >$100k per flip, why couldn't I? Thankfully, I wasn't in that position in the US at that time. On the other hand, here in Victoria, money could have been made.

One thing, the comments from Mr. Dugan of CMHC. His comments aren't that far off. But why, whenever a rep of CMHC gives comments, does it sound like they are cheerleaders for Real Estate? Isn't CMHC, a government agency, supposed to be unbiased and neutral? So often, their comments are no more valuable than those of, say, a Realtor. It's like they have something to gain from propping up the real estate market.

Finally, the housing numbers at the bottom of the G&M article are not a fair comparison. They compare Canada's resale home sales and prices against the US's new home numbers.