More bad news south of the border.

The headlining story on MSNBC right now is home sales rise a bit but prices fall sharply.

Michelle Meyer, an economist at Lehman Bros., said the rise in sales was partly a response to falling prices and a recent dip in mortgage rates

“The pickup in home sales reflects stabilization in demand and the first signs that the housing market is beginning to balance,” she said in a note to clients.

Economist Joel Naroff of Naroff Economic Advisors said the report “does not point to a major housing meltdown,” but he noted that there is a “huge” supply of unsold homes and condominiums on the market.

The number of homes on the market is up 34 percent from a year ago and represents a supply of more than seven months at current sales rates, compared with an average of just four or five months in the boom years of 1999 through 2005.

“The housing market is far from the bottom,” Naroff said in a research note. “Sellers will have to overcome their state of denial and start dropping prices even more to clear this market. And once that happens, we will then have to convince buyers that prices have stopped falling. We are a long way from that point.”

There are concerns at the federal level that if the housing slump across the USA continues or gets worse that it could cause bigger problems for the US economy that has already started to slow down. Its suprising that this is a problem across most of the country. What ever happened to the maxim “all real estate is local”?

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ken
ken
13 years ago

so if some one can learn from 81 history he can make $300.000 per condo and $800.000 per house…So all I have to do to get rich is hold onto items that are rapidly losing value? Awesome!Thanks for the advice.

dingus
dingus
13 years ago

"Why did people sell their houses here in 81 for half the price they were worth the year before?"Because maybe they didn't want to ride it down another 50%? Because maybe they had to sell for personal reasons? Because maybe they found they couldn't afford what they had? Because maybe they figured they were still up from their purchase price anyway? Because maybe they're slightly irrational humans in the process of panicking?For that matter, why sell when prices are rising? Aren't you writing off tens of thousands of dollars of free money? My point is, by your logic there, no one would ever sell. Yet, golly, they do. I think it's more likely people hold when the market's rising, try to sell as close to the peak as possible. If they see the downside of the peak, they';re all the… Read more »

Anonymous
Anonymous
13 years ago

well done digi you got some data handy.your point of view is a part of real estate life.Pundit always saying if price goes down or going down hold you property if you can digi said… Not everyone has the ability to wait around and only sell if they see a profit, that only happens in fantasy land. Why did people sell their houses here in 81 for half the price they were worth the year before? Why are people selling in the US when prices are down?Now see people who sold in 81 they might have lost atleast $150.000 per condo and aproximately $400.000 per house so if some one can learn from 81 history he can make $300.000 per condo and $800.000 per house…

digi
digi
13 years ago

people sell to make profit if there is no profit who will sellNot everyone has the ability to wait around and only sell if they see a profit, that only happens in fantasy land. Why did people sell their houses here in 81 for half the price they were worth the year before? Why are people selling in the US when prices are down?You also seem to assume that all owners bought in the last year at that price. If you see prices going down you might want to sell before they drop too far, particularly if you bought more than a couple of years ago and you own a leaky condo.

Anonymous
Anonymous
13 years ago

Price up=development cost(nevergoesdown)Sales=price upprice down=no salesPrice up =lots of sellerno buyerPrice down=lots of buyerNo Sellerpeople sell to make profit if there is no profit who will sell

dingus
dingus
13 years ago

Uh…If more and more people are "left behind" — who's left to buy? Prices are only set by people paying them. If no one can pay the ask, then there's no sale, or the price reduces until there is.

ken
ken
13 years ago

thats mean you should have been bought some thing a year back but you did not and how would you do that now.sure, hindsight is 20/20, but in the last year by renting I've managed to save close to $40k without missing out on travel or spending like normal and I don't have to: -sell the place I live when I try to find a buyer to give me $40k more than I bought it for.-pay realtors and lawyers fees to get access to my supposed gains.and I didn't have to dump extra money into maintenance and taxes. The new water heater that went in? the landlord payed for it and my rent stays the same.

betamax
betamax
13 years ago

d_oush: I just don't think it follows that just because condo prices have dropped 12% in the western US that its going to happen here.It won't happen here because prices dropped in the US; it will happen here for similar reasons that it happened there.With d_oush's 'straw men' and the anonymous illiterate's rambling, the bull argument is hardly convincing here.

Anonymous
Anonymous
13 years ago

I can think of a lot of things to do with an extra $40k. 11:14 AM thats mean you should have been bought some thing a year back but you did not and how would you do that now.

dingus
dingus
13 years ago

"Let me be clear: I don't think that we will continue to see price increases like we have in the past couple of years, but that doesn't necessarily mean that prices will drop. If they do I expect it would be a very minor drop, maybe 5 or 10%.I just don't think it follows that just because condo prices have dropped 12% in the western US that its going to happen here." Why not? Just because it's hard to imagine? The same soft landing bumpf was spouted in the US too. Why would Vancouver be immune? Affordability is worse than most US bust markets, our economy is predominately geared to servicing theirs, our local economy is construction, weed, and construction, local incomes lag those of Thunder Bay.Name one market, asset, commodity or whatever that increases 20% a year without coughing… Read more »

ken
ken
13 years ago

d_oush: I'm surprised to hear you change your tune. Even mentioning the possibility of a price drop seems very unlike you. A 5 or 10% drop is equal to a 10 or 20% increase, and on a $400k condo would be $40k.I can think of a lot of things to do with an extra $40k.

d_oush
d_oush
13 years ago

Let me be clear: I don't think that we will continue to see price increases like we have in the past couple of years, but that doesn't necessarily mean that prices will drop. If they do I expect it would be a very minor drop, maybe 5 or 10%.I just don't think it follows that just because condo prices have dropped 12% in the western US that its going to happen here.

dingus
dingus
13 years ago

"Why does anyone even care what is happening in the US market? They are a different country, We are not them.Its as simple as that." Slamdunk, my friend. You bet. Good thing we have a completely independent and self sustaining economy!

paulb
paulb
13 years ago

Then go buy some investment condos. Perhaps some assignmnets in New West

d_oush
d_oush
13 years ago

Why does anyone even care what is happening in the US market? They are a different country, We are not them.Its as simple as that.

ReductiMat
ReductiMat
13 years ago

To the anonymous fellow: I just picked up some commas and periods at Costco. I have more than enough for the next year and would have no problem lending you my surplus. Let me know.

Anonymous
Anonymous
13 years ago

I'm sure I overheard those cavemen from the Geico insurance commercials talking about real estate yesterday…Me goed du lurned nuw tryks to bettr lyfe en nuw ecconomee. I tel u by roocks en durt tu maike guud prawfit en futura.

solipsist
solipsist
13 years ago

I am an onion/"patata" latke.By me sure soon befour price rest my case sireosley. Boarder town make me loco lyke wiserossijrock sed.

paulb
paulb
13 years ago

Wow what insight… tell me more

Anonymous
Anonymous
13 years ago

Are these the desperate ramblings of an illiterate flipper with a seriously incomplete knowledge of history, much less current events south of the border? Standard always being set then people follow that one border is not enough look at world price never reverse and affordability is never been issue nor it is going to be its depend on people where they wants to live.think between you and your parents then you and your friends you will find the answer and money to buy.if you don't you have to rent it and live life to the fullest.

wizardofozziejurock
wizardofozziejurock
13 years ago

I think we should change that tired aphorism to:All real estate is "loco".The same can be said of that last anonymous post:"so any body wants to live in home do not wait buy it price will not take a reverse turn ever even after 2010."Are these the desperate ramblings of an illiterate flipper with a seriously incomplete knowledge of history, much less current events south of the border?

dingus
dingus
13 years ago

Well THAT'S clear enough.

Anonymous
Anonymous
13 years ago

No surprise,same old story,but its not true thing is houses/condo's is not a onion or patato its one unit sells for millions,Can any one tell how many house should be selling in a year?no one is sure no solid answer.I think too many have been sold in 05,06 definitely mkt. will slow down when there is no buyer but sellers only,and only few will sell on low price so price will not go down who want to lose people sell to make profit who will sell if price does not full fill desire to sell.so any body wants to live in home do not wait buy it price will not take a reverse turn ever even after 2010.

digi
digi
13 years ago

Is there any info out there about which markets have dropped the most and what their average incomes and rents look like? It would be interesting to see and compare to Vancouver.