MOI - VREB search - 25/06/08
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?
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Not much change in the total listings for 5 days. I wonder if we are nearing the peak for the year or if this is just a blip with more to come.
That's a good question Dave. What happen will probably depend on the answer to a large degree.
VREB area unit sales are down almost 1000 units through the first two quarters, so I think that's the other side of that equation. If listings slow, will sales pick up enough to cut into the backlog of expensive properties?
I had a look through the data from VREB to look at the impact on year over year prices when year over year sales dropped. In most years where sales went down, prices kept marching upwards (e.g. 80 to 81, 89 to 90, 91 to 92, 92 to 93, 93 to 94). The only big price drop during a sales drop was 94 to 95. It took four years of progressively lower sales before it started to impact price.
I wish they provided data on months of inventory against price changes. That would be more interesting.
So, I think history shows that sales unto themselves do not drive the direction of the market. Rather, we also need to look at the inventory.
In the case of Victoria, we are in sellers market for SFH and a balanced market for condos and townhomes.
You correctly point out that different things are happening in different segments. High ends SFHs are not selling well but prices near the median are. Resale condos are doing OK, but new product has been much slower.
If listings do peak sometime soon, then it would be hard to see prices correcting.
"So, I think history shows that sales unto themselves do not drive the direction of the market. Rather, we also need to look at the inventory.
In the case of Victoria, we are in sellers market for SFH and a balanced market for condos and townhomes. "
First you say that we need to look at the inventory to determine the direction of the market. Then you just conclude the direction of the market?
Can you go ahead and justify how you call 11 months of condo inventory "balanced"?
Dave,
its possible that this year everyone tried to get the jump on their neighbours and listed earlier, and so listing pace could slacken.
On the other hand, the past couple years inventory has increased steadily from the spring to October. If that happens again this year, you will see over a year of condo inventory on the market.
If that happens, the balance goes out the window.
I find the big drop in total sales volume YOY another somewhat untold story. I'll try to put out a graph this weekend to show what I mean...
I would suggest adding a "total" row to your spreadsheet which includes all housing types. The breakdown is interesting but sometimes I just want to see the overall MOI and listing totals.
Aleks,
thanks for the suggestion, I'll see what I can do!