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REBGV benchmark prices April 2007

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Well the REBGV has just released their sales stats from april – thanks agentwill for my copy. So where did prices go last month according to the Real estate boards benchmark figures?

Up.

Yep, thats right – we have a new ‘high score’ in every category – The detached benchmark was at $695,069, the attached benchmark hit $432,490 and apartments where at $355,108. Here’s my standard short-term tracking graph updated with last months numbers:

Real estate in the GVRD is now more expensive than its ever been with prices drifting farther and farther away from rental values – one of my favorite examples was a house listed through Rob Chipmans office. It was rented for $1200 per month and was put on the market with an asking price of $620k. I’m not even going to bother running the numbers on that.

Apparently its not even worth building new rental property in Vancouver anymore – you just can’t get the cash you can from condo-hungry buyers.. So where does it all end? Your guess is as good as mine, but the number of listings are going up and the number of sales are dropping so I guess eventually we’ll figure out if there’s anything to that old ‘supply and demand’ theory.

So there you go – Numbers up in every category, this must be an interesting time to be a speculator.. Deal or no deal? Do you let it ride? Can prices go up even more? .. We’ll just have to wait until next month to find out.

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-\/-

Thanks!

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digi

-/-: Check out this graph (its a PDF) its got the real prices from 1975 to 2006. That early eighties crash looks mighty painful for anyone who bought at the peak.

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-\/-

Crabman,thanks for the emotional support.I had a look at your graph on prices. I hope they are nominal and not inflation adjusted, otherwise they would not be as good for bears: the retreat after the 1982 peak was very small.Actually looking at the graph made me think we might as well buy now, as we would be screwed anyway……if prices go up by 100% and retreat by 15%, what's the big deal…..Need some more bearish evidence to feel better…..

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Andrew

Quoth m-: "Heh– seriously, one-week is the typical subject length that I've encountered over the last few years. When I bought my place, I had no subjects. When I sold my place, two of three offers had no subjects. The third had a subject, with a 3-day limit, and we turned them down."1 week seems to be the typical length of subjects… assuming there are any. With the market slowly turning, rumor has it that people are once again able to make offers *with* subjects on them, and have them accepted.When we bought our place 18 months ago, we put the standard list of subjects on there (including subject to inspection, very important in my book). What put the ball in our court was that they were a large, multi-generational family living in the place, and we were quite flexible… Read more »

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jesse

"It isn't different this time"Yes it is. This has been the longest sustained period of appreciation in 30 years and one of the lowest in terms of population growth.

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Crabman

-V-I feel your pain! This whole thing is taking a lot longer than any of us thought. When you feel depressed, just look at a graph from the early 80's. To modify John Templetons famous saying: "The five most encouraging words for Vancouver RE bears are "It isn't different this time".According to this document, less than 6% of households could afford a house in 2005, and less than 18% could afford a 2 bdrm condo! This is an impossible situation that will have to correct itself, it's only a matter of time.

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rentah

From the markets perspective, the sale is made at the moment the price is agreed upon: that's the crucial sale point. Not later with possession etc. Thus the time lag appears relevant.

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M-

Subjects? What are those? Heh– seriously, one-week is the typical subject length that I've encountered over the last few years. When I bought my place, I had no subjects. When I sold my place, two of three offers had no subjects. The third had a subject, with a 3-day limit, and we turned them down.

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freako

"According to MLS, my property sold one month ago."What do you mean by "according to MLS"? I am no authority, but off the top of my head, the sale recordedi when the subjects clear, not acceptance, nor the date of completion. It's been a while since I sold a property, but I think it generally takes two to three weeks for subjects to come off from acceptanbe. Hence over half of April sales were in March.

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M-

Freako:I've seen yourself and at least one other person note that sales data lags listing data by a month, but I wonder about that.According to MLS, my property sold one month ago. Yet I'm still living in it, and I've got more time in it before the close date. MLS doesn't refer to the close date. The "sold" date on MLS is the date that we sat down with a few buyers' realtors and negotiated offers. So I wonder– I guess it depends on the statistics. Can a realtor who peruses this blog chime in on whether the reported sales data is "close" dates or "sale" dates?

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craigpbbrett

For what its worth, out of the 16 municipalities listed in the GVRD stats for April, 10 of them had flat or falling sales compared with March.The data for sales and especially listings suggests that we are approaching a bear market. Whether prices continue to rise in the next few months is immaterial — the basis for that rise is being steadily eroded.

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freako

"The truth is this: based on the large listing increase I genuinely thought Vancouver's RE crazy run was over. I must have been wrong, I am running out of faith in a crash…"As mentioned earlier, listings are real time, but sales are lagging. Most of the sales reported in April really were made in March when the offer was accepted. The recent upswing in listings across the board may or may not pressure prices. We won't know until the May numbers are out."The problem with average/median pricing is the home quality is not factored in"The REGV numbers are benchmarked, and thus adjusted for quality.

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-\/-

REBGV data are quality adjusted and benchmarked…I thought about selection but it does not seem the explanation for the numbers. truth is prices are going up…..it beats me!

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jesse

This is not unexpected. With your ear to the ground and perusing Rob's site why is this a surprise? Two comments:1) Sales volume is down and inventory is up. Patience.2) The problem with average/median pricing is the home quality is not factored in. That said, the market still looks pretty strong in general but price declines can be hidden by the bottom part of the market not moving.

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-\/-

The truth is this: based on the large listing increase I genuinely thought Vancouver's RE crazy run was over. I must have been wrong, I am running out of faith in a crash…..I am sure it will arrive when nobody expects it any longer.

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mohican

"I'm talking about the Chinese stock market, not necessarily their economy"If anyone wants to see a really big bubble you only need to look at the Chinese stock market over the past two years . In one word – nuts. See this commentary by Andy Xie on the Chinese stock market .

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rentah

freako said: Consequently our affordability situation is insane.V said: I am starting to doubt my own reasoning as this craze goes on and on…..help!—–The market has definitely now extended beyond credibility. All of the renters that I know are feeling excessively squeezed. There is high anxiety and I personally know of one recent case of frantic panic buying. I hear talk amongst professionals of leaving the city. The owners also seem stirred up about the state of the market.From a sentiment and psychological perspective, the volume is now cranked to 'Eleven'.This is what one sees in the vicinity of a top, but I said that before when the volume was at 9.5, 10.0, and 10.5.We could go higher. 12 is unheard of but not impossible.(see aleks' Keynes quote above)**Talking of insanity, I have this crazy hunch that we'll hit our… Read more »

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Aleks

"I need a word of authority telling me that economic laws still apply to this city or, at least, explaining to me where I got them wrong…..""The market can stay irrational longer than you can stay solvent." – John Maynard Keynes

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-\/-

Well, right now I am a bit down….I need a word of authority telling me that economic laws still apply to this city or, at least, explaining to me where I got them wrong…..Is it possible I am underestimating immigration, Hong Kong investors, supply restrictions or income?I am starting to doubt my own reasoning as this craze goes on and on…..help!

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blueskies

Is this Vancover Spring 2008? article < </a> No Spring Thaw for HousingSource: Business WeekPublication date: May 3, 2007 selected quotes (bear spin 🙂 )…….. The housing market has not hit bottom. ……..The latest numbers……. spring of 2007 …… worst real estate seasons in years…….. the usual throngs of spring buyers just aren't there……. sharpest plunge in 18 years and the beginning of what is sure to be an illuminating spring season………. April is going to be the month that reveals that things really aren't good……….most of the blame has fallen on the new stricter lending that has reduced the pool of potential buyers…….the many sellers who are struggling to make their mortgage payments and holding out desperately for a spring buying boom could be in for a shock, at least, and foreclosure at worst."Many people think, 'if I can… Read more »

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markx

From anecdotal experience, asking rents are a lot higher than last year, but rental quality seem to be down. After we moved out, our handlord increased rent by 23%. The previous year's increased was 5%, with us staying for another year. But the new tenants were a family with young children, and utility were included. On the other hand, wages at the low end are going up pretty fast, including fast food sector. The economy is essentially in negative unemployment territory, it would be interesting to see how this construction boom play out.

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Drachen

Patiently WaitingI think a lot of the problem in housing shortage is because of the building boom. In my neighbourhood at least a dozen multi suite houses and two apartment buildings are unoccupied right now because they are either being torn down, fixed up, renovated, built new or are sitting on the market. And I'm not talking about a big neighbourhood, it's easily 5% of the housing around here, maybe as much as 10%.

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mold city

Patiently waiting: I don't know – the craigslist stuff doesnt look any different to me than it ever does – there are lots of places listed there. They also tend to be overpriced since they're free to list and people like to see what they can get.

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Patiently Waiting

Anyone here read the apartment wanted ads on Craigslist lately? The desperation is shocking. How can we have a housing crisis during a building boom? Something is horribly wrong with this city. And now they are advertising for more people to come here. What a sick joke.

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freako

"…would have only about a grand a month left for ALL the other good things in life. How is this humanly possible."Well it certainly wouldn't be comfortable.. "But $100K is well above median income. I don't know what decile, but its up there. And this is for the MEDIAN detached in the GV (which ranges from Vancouver to Maple Ridge).Let's assume that appreciation returns to its "normal" 5% from here on, which apprently many believe will be the case.Detached will appreciate just shy of $3K a month. Watch out San Franscisco/Oakland, Vancouver is heading straight for the title of most EXPENSIVE city in ALL of North America. NAR releases q1 numbers on the 15th. I suspect that the four metros still ahead of Vancouver will be down a fair bit from q4 2006. Depending on the exchange rate, we are… Read more »

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