Vancouver Housing Market – is the psychology shifting?

Earlier this summer it seems like everyone I talked to about real estate thought there was only one direction prices would ever go – Up. Several co-workers we looking for places to buy before they were ‘priced out’ of the market, and everybody knew somebody who’s condo had gone way up in value and of course no one wanted to miss out of the money train. But lately things seemed to have changed.

Yesterday the topic came up at work and the majority of coworkers are now expecting a crash or ‘correction’ – this is a dramatic shift from just 5 months ago, within the same group of people. A few people who were home shopping in my office bought this summer, and the one that hasn’t has an ‘absolute top price’ for a condo that is more than $100k less than todays prices – he’s interested in buying, but at todays prices he’d prefer to rent and be able to take time off to travel and snowboard. Everybody else either already owns or isn’t interested in looking to buy.

I would have taken this discussion as an isolated incident, but then I saw bc_cele’s comment over at the Vancouver Housing Blog mentioning a very similar experience from the very same day, and more and more I’m running into people with negative opinions on real estate in vancouver – from dissapointment at being priced out to downright ridicule of the market. With dissapointing sales numbers in July have we seen the peak of the market, or will the August numbers jump right back and start climbing again?

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Clarke
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Clarke

"Ridicule is a very powerful social force, and when it breaks out of the blogs and into the mainstream media, look out. It's what turns hot trends into dead ends." I do not see us at the ridicule stage yet. I think the market is tipping at this stage, but it will take a lot more evidence before the bulk of people have their perceptions change.

Anonymous
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Anonymous

August will be as slow or slower than July. There has been more media attention directed to the US real estate market and their economy. RE sales are off big time, their economy is rolling over, we will feel the outcome. When the recession in the US starts all of it's trading partners will feel the pain.

bc_cele
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bc_cele
Anonymous said… The end of summer is traditionally a slow time for real estate, I don't think that means that psychology is shifting. So then why are people suddenly thinking that the market is going down?For a little thought experiment – how likely is it that you would hear someone talk about real estate? Once started, how likely is it for someone to mention that the market is due to go down and that everything is overpriced? Now how likely is it that you hear this conversation twice in one day? The answer is not very likely.Let's look at it another way. The fact is that you could have a conversation about just about any topic. Did you hear any conversations about Michael Ballack's fine today? Did people think he deserved it? For the recrod Michael Ballack is a footballer… Read more »
bc_cele
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bc_cele

stuckinburnaby said… Are there any actual statistics being kept on frequency of price reductions? You can find a running total over at Rob Chipman's blog. You can track them over time if you put it into a spreadsheet.

Anonymous
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Anonymous

In the long run, we're all dead. Prices will drop in the short run. If you have the choice of buying now or buying in two years, you're almost certainly going to be better off buying in two years.

D_Oush
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D_Oush

I mean in the long run prices will keep going up, and you're part of the demand. If prices flatten will you buy? Are you going to wait forever for prices to drop? How much of a drop would it take you to buy?

Anonymous
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Anonymous

"Price drops? That will never happen."Never's a long time. At our house, we continue to rent, save our money for a DP, and stalk the housing market news.Just Paying Attention

D_Oush
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D_Oush

I'm not seeing any change of opinion on the market – we've got a strong economy and lots of demand. If anything we may see prices flatten out a bit for affordability reasons, but price drops? That will never happen.

the pope
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the pope

stuck-I'm sure there are, but you probably need to be a realtor to access them.personally I think 'PRICE REDUCED!' signs smacks of desperation, I prefer the more positive 'NEW PRICE!' sign I saw recently…maybe its lower, maybe its higher!

stuckinburnaby
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stuckinburnaby

Are there any actual statistics being kept on frequency of price reductions?

Anonymous
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Anonymous

July and August are slow months, traditionally so you may have a point. Does that also explain the numerous price reductions I have witnessed (Burnaby & New West area)? I subscribe to RE notification emails through a few realtors and I've seen more price reductions this summer than at any other time over the last two years.

legum
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legum

speaking of VHB – the best quote on the topic of ridicule comes from wizzardofozziejurock over there:"The housing bubble is no longer a subject of despair, it's a subject of ridicule. Has anyone else noticed this? Ridicule is a very powerful social force, and when it breaks out of the blogs and into the mainstream media, look out. It's what turns hot trends into dead ends."

ken
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ken

anon- I've also heard that fall and winter are traditionaly a slow time for real estate, and to expect a slow next spring in the market in vancouver.. I think that covers the bases eh?

Anonymous
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Anonymous

The end of summer is traditionally a slow time for real estate, I don't think that means that psychology is shifting.