Victoria SFH prices down YOY and over the last 2 years

Condo prices are also down YOY and flat over two years. Attached has taken a big dive and is down 15% over two years (a thinner market so we won't read too much into that)

Here are the graphs from the VREB

SFH Average Greater Victoria

Nov 2009 = $617,987

Nov 2010 = $636,557

Nov 2011 = $592,034

Median 2009 = $555K

Median 2010 = $530K

Median 2011 = $530K

This is news IMVHO. Big drops in SFH Median and Average prices over the last two years according to the VREB stats.

So how did they deal with it their news release?

It doesn't seem to have been mentioned!

FVREB and then some

Here is the crux of the matter

MOI= 9

In November, the benchmark price of a detached home in the Fraser Valley was $532,086, an increase of 5.4 per cent compared to $504,848 in November 2010 and an increase of 0.3 per cent compared to October.

For townhouses, the benchmark price in November was $327,764, an increase of 2.5 per cent compared to the same month last year when it was $319,623 and up 0.7 per cent compared to October.

The benchmark price of apartments in November was $238,461, a decrease of 1.6 per cent compared to November 2010 and a decrease of 2.2 per cent compared to October.

Basically pretty flat prices YOY in the FV- up or down a couple of %. Probably a good place to get deals if you need to buy. Median prices are even flatter. Up less than inflation or down a tiny bit. Not much HAM money there.

Full package of stats.

...........................

Had an interesting discussion with a health economist this week-end which may explain why we accept HOT money from anywhere so readily.

He says that the Boomers who head into retirement will be taking out $3 in pensions, health benefits, drug benefits, seniors housing and medical costs for every $1 they put in, that's inflation adjusted dollars.

If his numbers are correct, where is the rest going to come from?

Our taxes are already prohibitively high, no one can even bring themselves to cut anything- drugs for example - there are lots of very expensive drugs that are not much better than cheaper ones, but the drug companies spend millions to convince doctors AND patients that the tiny difference is worth triple the price and that if the government doesn't pay for it, they are heartless SOB who are only interested in their pensions.

Likewise, he says, there are countless high tech medical tests and procedures done on very elderly patients which are of little benefit but who is going to say no! The heartless Government? The doctor who is getting paid to do it and maybe sued if they don't?

The US has just spent like drunken sailors and gave money to banks and Wall Street and don't like tax so they have a leaning tower of debt. We aren't far behind, but our betters have understood that with the HAM comes huge inflows of cash and economic activity and short term tax revenue, and this reduces the debt that we have to pile on, since we cannot say no to anyone.

Sure it brings huge social costs with it, but social costs be damned, at least we don't have to say......enough!

What did I tell you??

(Does a little dance and strut of victory)..

Here's what I thought would happen:

MOI 6.5

MOM price change -1-2% in most of the categories (attached is always an odd one)

YOY- I think we will still be up 4-5% YOY after October's disappointing rebound.

Here is what happened from Larry Yatter's number.

Average SFH down 2% MOM.

MOI 6.3

However we are up 8-9% YOY still.

All categories showed drops.

Listings 14% higher than last year and sales down 12%.

Very different from last year when we saw the summer lull give way to a fall buying spree and dropping inventory. Maybe we have finally seen home prices reach their maximum level of unaffordable frenzy, maybe the bubble can no longer be blown up.

Fall 2011 is very different from Fall 2010 but we need a lot more to declare this lunacy ended.

Is it a myth?

Some bear blogs are having a discussion as to whether the HAM buyers are driving our market or not.

My opinion is simple, in some areas they ARE they market. In others, like Pitt Meadows or Langley they are not much of a factor.

Take the North Shore. here is my anecdotal info. This year, I have had 3 friends sell their places. One bought smaller and banked the difference, one is renting and one moved to the Island with his family. ALL 3 sold to mainland Chinese buyers for MUCH higher than they had ever hoped for and in two cases for higher than their listing price as a HAM bidding war broke out.

Over the week-end I carried out my own unscientific experiment. I called up 5 newly listed rental homes in West Van on craigslist. 3 had Chinese agents who quickly admitted that their clients had just bought the homes and in fact two of them didn't even have possession yet. The other two were professionals agents- one volunteered that their client was from the Mainland and had just purchased it as an investment and had no intention of occupying for now. the last one would not reveal the ownership.

Based on my experience therefore it would seem that in some parts of Vancouver, the HAM money ARE the buyers PERIOD. The likelihood of being able to compete in the higher end market after 40% taxes unless you run a goldmine or are the CEO of Lululemon is zero...

Remember Landcor said that they estimate 74% of buyers in certain areas of Vancouver to be from off-shore. That is an astounding number and were it anywhere else in the world, there would be an outcry to legislate and regulate, but not here where we are the keepers of Hot money!

The only up-side I can see is that some people are making out like bandits, like my friends who sold, and some realtors who will hopefully be paying some taxes, and the Province will be getting the property transfer tax. It is btw desperate for any money it can get it's hands on with the deficit soaring, so if you think they are about to kill this golden goose, think again.

Any guesses for November's numbers..

MOI

Price change MOM, YOY - average or median or Benchmark for the 3 categories.

Here's mine:

MOI 6.5

MOM price change -1-2% in most of the categories (attached is always an odd one)

YOY- I think we will still be up 4-5% YOY after October's disappointing rebound.

For now the HAM frenzy seems to have moved to the North Shore..

Will the Market lead Housing..

As I noted in previous posts, our stock market has been leading house prices..

See here

The market topped in April and our home prices peaked in May. So we would seem to lag the stock-market by a month or so as you will see from Larry's excellent chart

In October the stock-market dropped and then rapidly rebounded and lo and behold, we had an unexpected bounce in our home prices. What now?

Well, we have had another shellacking in stocks in November. and the market is down 8% in two weeks. IF this relationship still holds we should see a dip in our prices too.

IF...

The sad state of the MSM

I know that you all move around the bear blog world. However in case you missed it here is the sorry state if our MSM which cannot even bother to check the most basic facts.

Here is the exchange between me and vreaa. Sad that we have such shoddy reporting

Fish10 on 22 November 2011 at 7:45 pm said:

Well done to everyone for pointing out the crass error of the National Post.
This is a great line from the Editor:

“We have confirmed that you are correct and the person used in the story works in condo marketing. If we had known this it would have been disclosed, and that change has been made in the online story.”

No kidding!

So how weak exactly is the journalism on this paper? They ask someone – what do you do? ‘Marketing’. They don’t even bother to ask, “marketing WHAT?” and then they run a rah rah RE storey.

This is what passes for information and analysis at this sorry paper.

Reply ↓

vreaa
on 22 November 2011 at 8:01 pm said:
Actually, it’s probably more sinister than that.
The reporter very likely knows that she works in RE (probably got the lead to interview her via contacts in the RE industry). Then intentionally omits the fact in the article.

Reply ↓

Fish10
on 22 November 2011 at 8:11 pm said:
You are probably right. It is inconcievable that they asked every other question except what she actually does for a living.

If the storey was a plant via the RE industry then things are truly messed up, in fact it shows what little respect we have for the integrity of the MSM (particularly some papers) that we even consider it possible.