A reader sent in this link to this story in the Globe and Mail about Vancouvers current real estate slow-down.
When Stephen Webber and his wife put their Vancouver-area townhouse up for sale in September, they expected to close a deal within a month.
After several open houses, nearly a dozen private showings and two price cuts, they’re still waiting.
â€œWe have been surprised by the lack of activity,â€ Mr. Webber says. â€œIt seems there is a lot of supply out there. Buyers have more choices. There is not that rush. And there might be hesitation because of what’s going on in the States.â€
If buyers are not rushing, it may be because they don’t have to. The frenzy that characterized the Vancouver housing market since 2004 is disappearing, replaced by one in which buyers have more than mere hours to make a decision. Instead of multiple offers, bidding wars and homes being snapped up virtually overnight, the current market is characterized by growing number of listings, a slower rate of price increases and even price cuts.
The article is a bit confusing – it lays out all the reasons for the current slowdown: Lack of affordability and drying up of speculative activity, and how thats led to less buyers and price drops, but then goes on to relay the same old reliable quotes from Bob Rennie and Rick Valouche saying everythings great! I found the following particularly confusing:
But anybody hoping that prices may come back within reach for first-time buyers is likely to be disappointed. Slowdown or no, Vancouver real estate remains too expensive for many. A search for a single-family, detached home under $600,000 on Vancouver’s west side yields three listings, all on land leased from the Musqueam Indian Band. (A fight over lease rates between leaseholders and the band in the 1990s led to a court case and a plunge in market value for homes on band land.) A heritage home in Mount Pleasant is listed at $799,000, despite having suffered a fire last year.
â€œAffordability is a big issue in Vancouver. And affordability is likely getting worse at a [September] rate of increase of nearly 17 per cent. Because there’s very little chance that the income growth will grow at the same rate,â€ says Craig Alexander, deputy chief economist with TD Economics.
So if I understand that correctly, prices can’t come down because they are too high and affordability is getting worse? Very strange that those very factors seem to be the only thing that caused the price drops currently happening all over the US, and yet here they will only cause prices to rise slower. Well, I guess they’re the experts.