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Okay, perhaps nobody else has gotten tired of this, but it's something I couldn't help noticing about MSM coverage of our housing market. First, the obvious: constant references to how the market is returning to a more balanced state, which is better for buyers and sellers. How is it better? Supposedly a moderation of price increases that were starting to make the whole market unaffordable. The increase of listings is good because it means there is more choice after several years with frenzied activity.

However, what is this balance, really? Is housing more affordable? No, it's clear that its not. What's the one thing that would make it more affordable?

Umm, yeah, lower prices.

Does the MSM foresee lower prices in the near future? Of course not, instead, they look forward to a cooling of the red hot market and a continuation of single digit annual price gains.

This is not going to solve any of the problems of unaffordability! The present market is severely unaffordable by almost any historical measure. Don't believe me? Read this.

Now over at Housing Doom, they've picked up on the repetition of some of these arguments in Canada, and how they eerily mirror some of the same arguments made by the MSM in the US right around the time the American market started tanking. We even get a quote from VREB President Tony Joe in the Canadian story published in the Vancouver Sun in a story title: "Victoria real estate market gets 'back to normal' as industry sees signs housing boom is over".

Compare that to these comments from a story in the USA Today back in 2006: "Phoenix: Prices, sales tumble, but that's 'getting back to normal'.

"The declines appear so dramatic because Phoenix's housing market last year (and for the past several years) was so hyperinflated. "Last year was just one of those atrocities that happens rarely," in terms of bidding wars and soaring prices, says Camille Sullivan, also an agent at Realty Executives. "I've never seen it before, and I've been doing this for 25 years. It was a very difficult time." Sullivan says the market is "stabilizing and getting back to normal." There are now about 47,500 homes for sale. That's about an eight-month supply, about the national average."

Is this deja-vu all over again?

Let's face it, Victoria is one of the most unaffordable housing markets in North America, which is nothing to celebrate. Talking about a slowdown to single digit increases? Nothing but a smokescreen.

Bring on the double digit price drops, and the sooner, the better!

Then the MSM can really report things are better for buyers. And considering gains sellers have made on paper in recent years, why exactly is it so darn painful for them to give back 10% or 20% anyway?

Rhetorical question - of course.

***Newsflash*** as of the weekend (July 12-13) the graffiti has been removed. But it lives on here forever...

This "Months Of Inventory" (MOI) snapshot was based on MLS searches done for the VREB area on June 27, 2008.

What a difference a couple of days make. Big jumps in the listings, to test the theroy of Dave from the previous MOI entry that listings are starting to stall.

Single family home listings reached a total over 1012 above the median and 1437 over all. Condo inventory increased slightly to 1261 total.

There are now 356 million dollar plus properties listed. That's 14.83 months of inventory. Balance that!

I'll borrow my June VREB predictions from a post I made over at HHV; feel free to come back and congratulate or tell me "I told you so!", when I'm either right or way wrong.

SFH - Median of $530,000, Average of $570,000 for SFH. Sales of 380-400.

Condos - Median of $280,000 for condos. Sales of around 180.

Townhouses - Median of $380,000 for townhouses. Sales of around 60.

Where do you think the numbers will fall for June?

Just for Aleks, please note the new total moi number. I get that by taking all the unit sales from May 2008, and then dividing the current listings by those unit sales. Thanks for the suggestion Aleks.

They try to tell people to get into dropping markets, because they might be bottoming out.  Why?  What's the hurry?  Even if they bottom out, does anyone expect these bombed out US markets (Miami, Vegas, Phoenix etc) to come right back up like a yo-yo or something?  I doubt it....

Ignore the feel good spin, concentrate on the facts off the top of the show.  Including some obligatory and off-putting rumours of war...

This "Months Of Inventory" (MOI) snapshot was based on MLS searches done for the VREB area on June 25, 2008.

In general, inventory is still incrementally increasing, compared to my last VREB area search on June 20, 2008.

Single family home listings reached a total over 1000 above the median; that's close to 5 months of expensive single family home inventory.  Below the median, things remain tight, lending some sense of urgency to the local market for all those first time buyers still struggling to get in.  Meanwhile, for those struggling to get out or trade up, long waits and price reductions have unfortunately been taking hold.  Condo inventory increased slightly. There are still 10 plus months of above median condo inventory on the market, so if you are selling an expensive condo, get a blanket and get some rest, we'll wake you up later and let you know how that's going.

There are now 348 million dollar plus properties listed.  Since only 24 properties sold in this segment last month, the situation is dire for anyone selling to settle an estate or divvy up for a divorce.  Can any paper millionaire be expected to wait that long?  Oh, I guess they already waited a lot longer at Villa Madrona, where they have now tried dropping the asking price by $4,000,000 to see if some tire kickers might be lingering in the neighbourhood.  At $11,000,000, who could resist?

This graph says it all, comparing last May (HOT) with this year (not). Looking at the graph, sales volumes were much higher in the lower price ranges a year ago. This year, houses are not listing and selling in those same price ranges, maybe because specuvestors think their houses are worth much more after owning for a whole year - time enough for a profitable flip, right? Looking at the price brackets where sales were a year ago, is it any wonder the Okanagan real estate market is in a tailspin now? All the affordable properties are gone. Or have been delusionally listed way too high. Bring them back down for the second half of 2008 into 2009, and maybe the market could revive a bit.

Ozzie mentions with affordable US resort destinations now competing for Canadian recreational buyers, and the strong Canadian dollar, it's only a matter of time until prices in BC start to come down.  A drop in buyers around the province and an increase in listings makes this inevitable.

This "Months Of Inventory" (MOI) snapshot was based on MLS searches done for the VREB area on June 20, 2008.

There was another jump in single family home listings. Maybe everybody is planning on selling this weekend and decided to get that house on the market quick. Condos did something unusual - they actually decreased above the median slightly. Of course, there are still 10 plus months of above median condo inventory on the market, but I guess that's better than another incremental increase - an incremental decrease!

There are now more than 344 million dollar plus properties listed, while only 24 such properties sold last month in the VREB area. Yikes, more than 14 months of expensive inventory with no sign of Alberta moneybags anywhere.

While I think there must be some total limit on townhouse stock that would prevent too many more from being listed, apparently that's wrong, as another 30 or so were added in the last few days, for a new total of 431.

Yes, average prices are being maintained, but for how much longer? Any bets on what June sales will bring? If PCS is any guide, anecdotally, some houses are selling, but not many, and listings are still piling on.

In Langford right now, there are 170 houses listed (results will fluctuate over time). Today the cheapest house starts at $387,000 and sits empty. When will this house (MLS®: 242635) find a buyer? ...Maybe sooner than this house (MLS®: 241376), which is zoned R2 and sits on 5 acres. But $2,400,000 in Langford?!? This is R2 - you can build a duplex.

I hope this is some kind of joke.

A twist on a situation where the soundtrack should be courtesy of the Talking Heads:"Burning Down the House".

"Broke, facing foreclosure?  Don't worry, call Vinny... for $10,000 up front, your problems could be over.... and you can sleep well in that new cheaper house...."

This "Months Of Inventory" (MOI) snapshot was based on MLS searches done for the VREB area on June 16, 2008.

As usual, there are more single family homes and condos listed since the last time I did a search on June 6, 2008. In fact, there are more of everything, including an incredible 14 months of million $ plus inventory.

We can thank CREA for announcing today that inventory is increasing, while dollar volume and unit sales are dropping throughout BC.

Of course, average prices are still somehow maintained. For how much longer?

This video is making the point that urban living is cheaper than suburban living - but with expensive gas prices - big mortgages don't make sense.

Are people with expensive houses in Sooke and Langford taking notes?

This "Months Of Inventory" (MOI) snapshot was based on MLS searches done for the VREB area on June 6, 2008.

There are more single family homes and condos listed since the last time I did a search on June 3, 2008.

There are more than 10 months of above median condo inventory, and more than seven months of condo inventory over all.

As usual, the months of million dollar plus inventory just keep chugging higher over 13.5 months at most recent count.

Wouldn't want to be trying to unload a million dollar condo right now...

Ozzie says Vancouver prices are untenable. Ozzie spins like a weather vane. Ozzie mentions people trying to unload presale assignments on Craigslist. Check here for a sample. Meet Ozzie the Bear, he calls for price drops, but explains it's "not the end of the world". What's next, Rob Chipman sound bites?

These people need to call Patrick Killelea.

One of the neat things about running your own web-site is the opportunity to exam your site logs and see where visitors arrive from. For the most part, I watch the logs to block various web-sites from linking or otherwise polluting this web-site with spam. Sometimes when checking the logs other interesting stuff appears.

Anyway, today my site started getting a lot of hits from the forums at Castanet, which is billed as the Okanagan's Discussion Forum. Checking the links, I found a very interesting discussion about "Popping Kelowna's Housing Bubble: The Canadian Credit Crunch". The topic has now reached 2396 posts and 160 pages since December 2007. The link is here.

I was wondering how things were going after spending some time in Kelowna last summer. So I decided to checking up on the situation. The Okanagan Mainline Real Estate Board has yet to release the numbers for May 2008. However, the graph here for April 2007/April 2008 (YOY) compares inventory numbers for family home listings for the two years.

The most interesting thing about this graph is how the pattern of listings was quite different last year compared to this year. A year ago there were many more listings in the lower price brackets, and also, not surprisingly, more sales.

This year we see sharply higher listing prices, along with higher volumes and lower sales.

Is it too much to draw a correlation between the higher asking prices, higher inventories and the falling sales?

No wonder so many people are frequenting internet forums in the Okanagan and elsewhere with concerns about real estate! It looks like the great BC real estate bubble ended before most people realized it was over.

Not surprisingly, the tone of some of the exchanges about a Kelowna bubble at Castanet sound bitter and worried.

Here in Victoria, some of the more popular bear sites (HHV, VicTruth) can get a few hundred posts about whether a housing bubble exists in Victoria, but in the Okanagan this is obviously more of a hot button topic. Is it all because of Robert Zoost?

So to any guests from the Okanagan, welcome to Cheaprealty. Take a look around; I hope you see something interesting. Anyone who wants to post here or in the forum about the current state of affairs in the Okanagan, go ahead, it's appreciated.

You can post or answer comments without signing in or signing up, but to start your own topics, you'll have to sign up. Why not have some fun? Maybe we can get some posts arguing about the existence of a housing bubble in Victoria, when all the realtors and recent buyers start showing up who are searching the inetrnet to find out why it's different now.

I'm looking forward to the day when the wider public finds these bear sites and we can get a few thousand answers going on any topic. So welcome anyone from Kelowna and jump in.

Peace for now.

Middle class foreclosures are making people homeless in Santa Barbara.  Safe parking programs are making it possible for the growing numbers of car campers to sleep in relative peace.

This "Months Of Inventory" (MOI) snapshot was
based on MLS searches done for the VREB area on June 3, 2008.

This is the first table based on the May adjustments to the sales numbers. They
don't do a lot to improve the situation for anyone hoping for better looking
numbers. The goal posts moved a bit lower, increasing the number of single
family homes available above the median, and compared to my last search on May 29,
2008, there are fewer condos listed.

Townhouse listings held steady at 401 units versus 404 a few days ago, while
condo listings dropped from 1254 to 1209 - not sure why, unless a bunch of
listings expired at the end of the month. Sales did not increase enough to
account for the difference, in fact, condo sales plummeted compared to the
previous month. Single family homes listed went from 1323 to 1333 - despite 441
single family homes selling in May.

Million dollar plus properties listed increased to 323. Based on the sales of
such properties in April (24), this are now 13.45 months of high priced
inventory.

The spin has already started from the local real estate industry, but it is
mixed with some sober messages - unrealistic sale prices don't lead to sales in
this type of market. Will the sellers get this message before some properties
sit for a long time?

Here are some stories that catch the flavour of the local market:

Times Colonist piece on the cooling
market in Victoria.

A decrease of 25% in sales is seen as a return to "a normal market"
in Vancouver, according to some realtors
quoted in the Sun, anyway.

Calgary is in a slump, with home
resales dropping more than 30%. Despite that, the Calgary Herald is
publishing articles calling the Comox
Valley a recreational playground.

Ouch.

Feel free to add any comments on these or other topics of
your choice.

Well, the month of May 2008 was nothing special in terms of the local property market. Prices are not collapsing (yet), but inventory is shooting way up and sales are treading water. Take a look at the accompanying VREB graph, it shows just what's happening with inventory, which is on a steep upward trajectory into territory never seen before during the bull run of the last 6-7 years.

Fewer million dollar plus properties sold, leading to a situation where there are now 13.63 months of million dollar plus inventory. As of today, there are 327 such properties of all types listed, while only 24 such properties sold in the last month.

Sales of single family homes and condos refuse to take off, despite the so called low unemployment, excellent wages and low mortgage rates touted by the real estate industry as supports for the current boom.

This market is about to become oversaturated with inventory while at the same time a shortage of buyers willing or able to spend these prodigious sums has become a reality. Can this turn around so summer 2008 sizzles?

Here are the latest VREB numbers, and here are the sources for April stats and May stats:

Average

SFH average is down from $630,295 in April to $601,987 in May.

Condo average is up from $326,983 in April to $336,153 in May.

Townhouse average is up from $420,917 in April to $435,058 in May.

Median

SFH median is down from $558,000 in April to $545,000 in May.

Condo median is up from $294,950 in April to $295,500 in May.

Townhouse median is down from $409,900 in April to $394,900 in May.

The trajectory on the May graph for active listings is amazing. Did I mention, according to Tony Joe, VREB President: "There were 1,850 new listings in May - the highest number for a single month in over 18-years"?

Yes, there's never been a better time to buy, except of course, later, when prices are lower.