Big Rate Cut

As everyone has heard, the U.S. Federal Reserve cut the overnight lending rate by 50 basis points, or 0.5%. The experts were somewhat surprised. I am surprised that they were surprised. Yet, their response was exactly what I had heard it would be, if there was a cut of that size. The experts are afraid of what lies ahead.

What does lie ahead? What does it bring for me and my family, the city and province I live in, and for Canada?

A person could theorize and hypothesize until the cows come home. Even with that, they could still not get it right. If any one person could predict what was going to happen, well, they'd be very rich. Perhaps that is why statements from Warren Buffet and the likes are well heeded.

I have no idea. That's why I started this blog. But here's what I could possibly see. Rate cut in the U.S. - U.S. dollar drops - CAN$ rises - CAN exports continue to fall (except oil) - things slow even further in export reliant regions of CAN - CAN economy slows - rate cuts in CAN - housing market????

I'm no expert. What do you think? Where will B.C.'s and Canada's economies be in 1 year from now? 5 years from now?

September 15 Week Ending Stats

The number of listings available on MLS.ca for Greater Victoria increased this past week. This includes
- 39 more condos.
- 3 more townhomes.
- 32 more SFH.

The largest increase in listings of SFH by price breakdown was in the $300k to $400k range. There are 10 more houses on MLS.ca in this price range this week.

Even with the increase in SFH listings, the pie chart breakdown is still very top heavy.

I think the increase in listings this past week is the beginning of the traditional run-up of inventory in the fall months. With the associated decrease in sales during fall, the months supply of inventory will increase. The September sales numbers will be very interesting.

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.

July New Housing Price Index

Statistics Canada has released the New Housing Price Index for July.

Once again, Victoria is showing some of the slowest month over month and year over year new house price gains. For the period of July 2006 to July 2007, Victoria had a 1.1% change in the new house price index. Tops was Saskatoon at 51.4%.

"For Canada, the pace of growth in new housing prices slowed for the 11th consecutive month in July. It went from 7.8% in June to 7.7% in July.

Saskatoon set a record high year-over-year increase for the fifth consecutive month. Prices in Winnipeg were 15.7% higher than in July 2006 in the wake of land shortages and development costs. New housing prices in Edmonton continued to increase at a fast pace with a year-over-year increase of 38.4%, due to hikes in land values from developers."

Go figure.

August Housing Starts

CMHC's housing starts report showed significant decreases in month over month and year over year housing starts for Greater Victoria. August 2007 had 110 housings starts. In comparison, July 2007 had 236 and August 2006 had 374. The number of housing starts for the year to date has 2007 only slightly behind 2006.

Does this signal anything? Is construction slowing down? I don't believe that one slow month represents a trend. With any new project coming online, next month's starts could be equally impressively high.

September 8 Week Ending Stats

It's September. Fall is coming, the kids are back in school, and housing inventory should start to increase as the number of sales continues decreasing.

There was a slight SFH inventory increase this past week. The biggest changes are 5 fewer homes priced between $300k and $400k and 7 more homes priced between $500k and $600k. As of today, 72% of all single family homes listed on MLS.ca have an asking price of $500000 or higher.

I know this isn't a Calgary or Alberta housing market blog, but I love watching the average sale price posted on CREB's website drop. Calgary's average sale price has gone from $491k on August 23 (the peak was around $507k) to $477.5k today. That's nearly $14k in 16 days! I wonder how many Albertans will be scurrying to purchase our properties as their bubble bursts!

August Sales Numbers

HHV and Roger beat me to the punch for commentary on the VREB's release of the August sales numbers. Check out their blogs for some great insight.

All that's left is for me to bore you with some graphs, and an update to the football score.

Median single family home prices. Ouch, how the median in Victoria is dropping. The rest of the Capital Region District is really having to take up the slack.

Looking at sales of SFH in the past two years, the number of sales is higher this year. Median price appreciation continues at double digit or high single digit gains.

Condo sales numbers continue to be strong. However, the median price appreciation has been marginal the past couple of months.

This summer has been hot for sales of townhomes in Greater Victoria. The median sales price has been flat the past four months.

And finally, the Bears have scored a touchdown this month. The average sales price for condos and townhomes were lower than the six month rolling average. Without the sale of the $5million+ home in Oak Bay, average price of SFH would also have been lower than the six month average. Score: Bulls 26 Bears 10.

September 1 Week Ending Stats

Short entry today. SFH inventory on MLS.ca up slightly this past week. Townhome and condo inventory down slightly.

Tuesday should bring us August sales numbers. I'm guessing active listings will decrease to between 3300 and 3200 for the month. MLS sales to be above last year - between 750 and 800. Generally, I think sales prices will be down a little, not much. Any other guesses or predictions?

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!