Rites of Spring #33 The ups and downs of the Victoria B.C. Real Estate illusion

The House Price Illusion - buy now! Prices only can rise!Like Victoria, Vancouver, Toronto and other major Canadian cities, house prices go through cycles of boom and bust… up and down… near affordability and utter un-affordability.

Particularly in the Victoria and Vancouver B.C. markets.
Where a simple 2 bedroom 2 bathroom bungalow on a postage stamp sized lot can set you back 1/2 million dollars. This same house, 10 years ago, would have sat on the market for weeks or months and maybe netted 200G… a price that would have been considered obscene in any other location in Canada.

And yet there appear to be buyers eager to scope up these houses all over the lower Island and mainland… for now.
And the trend appears to indicate that a market, a mere year ago that was hotter than a stock car brake pad, seems to be cooling… a little faster than even I would have expected.

But not according to the likes of the B.C. Real Estate board, or the CMHC or our local rag, the Times-Colonist – a newspaper that seems to be little more than a trumpet for the Provincial real estate entity…
“Average home prices are anticipated to climb by six per cent this year over last, to $494,600, said Cameron Muir, B.C. Real Estate Association chief economist, said in his housing forecast released yesterday.

“That really represents the price increases that have already happened.” Prices reflect sales of all types of homes sold through the multiple listing service.

Say what?

My wife and I have been house shopping for quite a while – like hundreds of other folks on the lower Island and Vancouver – I have a computer listing of 100 houses in front of me – that are in our price range… and 53 of those houses have had price reductions of 20 to 60 thousand dollars. Some have been on the market for 60 days or more… gone are the 2 day price wars and sales markedly above asking price.

But don’t tell the Times Colonist or the B.C. Real Estate board that – they work hand in had in maintaining this illusory fever that lots of folks fall for.
And while the bubble may not burst, some of the air is getting out…

So take a deep breath. Save your money… for the time being.