REBGV benchmark prices April 2007
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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May 4th, 2007 at 5:34 pm
Thanks!
May 4th, 2007 at 4:01 pm
-\/-: 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.
May 4th, 2007 at 3:00 pm
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…..
May 4th, 2007 at 12:25 pm
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 on the move-in date.
May 4th, 2007 at 8:03 am
“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.
May 4th, 2007 at 7:45 am
-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.
May 3rd, 2007 at 9:56 pm
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.
May 3rd, 2007 at 8:51 pm
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.
May 3rd, 2007 at 6:53 pm
“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.
May 3rd, 2007 at 5:06 pm
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?
May 3rd, 2007 at 4:39 pm
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.
May 3rd, 2007 at 4:19 pm
“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.
May 3rd, 2007 at 4:18 pm
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!
May 3rd, 2007 at 3:58 pm
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.
May 3rd, 2007 at 3:18 pm
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.
May 3rd, 2007 at 3:01 pm
“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 .
May 3rd, 2007 at 1:25 pm
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 RE price peak at the very moment that the red-hot Chinese stock market implodes.
Not necessarily because I think that Chinese profits are funding Vancouver RE buys (some might be), but because there has been remarkable correlation between usually uncorrelated asset classes recently, all seemingly because of excess liquidity. So, when that turns, I would bet that RE here will turn, too.
This would be one mechanism whereby we may unshackel from the USA+1year time frame we’re currently locked into.
(Note: I’m talking about the Chinese stock market, not necessarily their economy.)
May 3rd, 2007 at 1:06 pm
“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
May 3rd, 2007 at 12:39 pm
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!
May 3rd, 2007 at 10:54 am
Is this Vancover Spring 2008?
article <
No Spring Thaw for Housing
Source: Business Week
Publication 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 just hang on ’til the spring,’ they will get an offer,” ……….. “This spring, they’ll be lucky to sell.”
May 3rd, 2007 at 10:40 am
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.
May 3rd, 2007 at 9:45 am
Patiently Waiting
I 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%.
May 3rd, 2007 at 7:21 am
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.
May 3rd, 2007 at 6:37 am
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.
May 3rd, 2007 at 5:59 am
“…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 catching them fast.
1. We are nearing the absolute top of North American real estate prices.
2. Our incomes are way way down there. Weren’t we below Windsor or something?
3. Consequently our affordability situation is insane.
Now much has been made out of the fact that we don’t use exotic mortgages here, blah blah blah. But reconcile the above. Call it what you want, but we MUST have as many buyers with marginal ability to make payments as the most speculative of the U.S. markets. An unprecedented amount.
May 2nd, 2007 at 11:43 pm
With a rapid increase in inventory (26% for REBGV and 51% for FVREB) and an increase in the median price heading towards summer, we are trending exactly like the U.S. in 2006. Note that the median price in the U.S. hit a high in July of 2006 and from there … well … we know the rest of the story.
“National home sales and prices both fell dramatically in March 2007—the steepest plunge since 1989—according to NAR data, with sales down 13% to 482,000 from the peak of 554,00 in March 2006 and the national median price falling nearly 6% to $217,000 from the peak of $230,200 in July 2006.”
Source:
http://en.wikipedia.org/wiki/U.....ing_bubble
May 2nd, 2007 at 11:04 pm
There is an increase of 51% in YOY active listings in the Fraser Valley, with a 5% YOY decline in sales. Who the heck is going to absorb a 51% increase in inventory, YOY?
May 2nd, 2007 at 10:31 pm
I suppose those amateur landlords can always count on demand from people who want to put together grow-ops. I bet they’d be willing to pay a premium for rent.
May 2nd, 2007 at 10:26 pm
Somebody $100K household income 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.. the theory must be that constant appreciation in condos and the low end will provide move-up pressure to provide more buyers, but it just sounds like a classic ponzi scheme to me.
May 2nd, 2007 at 10:23 pm
warren: I don’t have to know how close the sun is to know that flying into the heart of it is a bad idea.
May 2nd, 2007 at 10:19 pm
“little head-scratching will tell you that it doesn’t matter whether housing is purpose-built for rental or not. All that matters is the total units of housing stock. The market will decide the mix between owner-occupancy and rentals.”
The multi-res buildings did serve a purpose, namely clusters of renters, all managed by professionals. The jury is out, but I think we are about too witness amateur hour in the landlord department.
May 2nd, 2007 at 10:03 pm
Apparently its not even worth building new rental property in Vancouver anymore
Purpose-built rental housing disappeared during Dave Barrett’s rent controls in the 1970’s and never came back. Since then all new rentals have been basement suites and “investor”-owned condos and houses.
A little head-scratching will tell you that it doesn’t matter whether housing is purpose-built for rental or not. All that matters is the total units of housing stock. The market will decide the mix between owner-occupancy and rentals.
May 2nd, 2007 at 9:54 pm
Back in the VHB Blog days, the general consensus was that when things crashed it would be a really slow moving train wreck….Well, things are now so completely out of whack that the correct analogy may be that of watching a plane crash.
May 2nd, 2007 at 9:40 pm
SATV, if you think that RE will continue to appreciate at rates double that of incomes, you are nuts.
Yes freako
but not only me us.we are nuts because there is un natural force that drive us nuts like lets say LCD HDTV are driving people nuts same size diffrent models $5000/10000 so half and half diffrence.Do you know why this up down diffrence because people need quality and bussiness or force need money.
so they ignore us and follow healthy pockets.
50k or100k is talk of town today but 150k and 200k will be talk of town tomorrow then nuts will be double tomorrow so price will be double too.2digit.
Which one you like plasma,rear projection,lcd hd,lcd hdtv plasma,lcd hdtv without tuner,lcd hdtv built in tuner do not mess with xbr,xbr1,xbr2,xbr3, because you need high definition source to sit up and watch the price will go up forever.
May 2nd, 2007 at 9:33 pm
That’s what I call rush buying….
May 2nd, 2007 at 9:28 pm
Is it a last ditch effort?
I think so.
A blow-off.
recent anecdote:
Friend forced out of rental condo by owner wanting to sell.
Immediately, and in panic state, turns around and buys >500K condo.
Just as soon thereafter, buyer’s remorse, esp when notes crappy construction etc etc.
May 2nd, 2007 at 9:25 pm
I’ve been watching two new houses on the westside that sold within the last 3 months, each for over $2,000,000.
That’s 16K per month mortgage or opportunity cost.
Get this: both are still standing empty.
Local flippers on speed?
Foreigners waiting to move in?
Money laundries?
May 2nd, 2007 at 9:20 pm
digi: I wish there were stats on who’s buying.
I would LOVE to get the inside scoop on the financial status of the buyers.
Aren’t there any bankers, mortgage-brokers or financial-advisors out there with such information who’d care to share the anecdotes?
Please?
(As as sign of gratitude, I’d be prepared to send a pdf scan of a five-pound note.)
May 2nd, 2007 at 8:46 pm
It may also be worth pointing out that most of these sales were actually in March, before the latest jump in inventory. Looking at the price chart, we can see that prices actually slid from through January. Then it exploded upward in February through April. I think it is fairly clear what is happening. A number of buyers who struck out in past years made a wow of coming through the gate swinging in a desperate last ditch effort to get into the market. Remember, January was down, but those sales were actually in December.
Is this surge all there is, followed by demand vacuum, or is does it have more depth to it?
May 2nd, 2007 at 8:28 pm
“These are the cheaper ones. Only decent stock is shifted, but the accompanying prices are still marginal higher on average.”
That was definitely the case with some of the American prices that saw rising medians despite mindboggling increases in inventory.
BUT REGV prices are BENCHMARKED and adjusted for quality.
May 2nd, 2007 at 8:27 pm
F*cking unbelievable. As I just posted on Mohican’s blog, local buyers are TOTALLY unfazed by what is unravelling down south. Complete myopica? Our collective psyches must have capitulated to the notion that we are “different” At 10%, the monthly payment for the, monthly payment would be $3724 month. Easily $4K with taxes and minor upkeep, possibly quite a bit more. Approaching 50K annually folks. Somebody $100K household income would have only about a grand a month left for ALL the other good things in life. How is this humanly possible. Is it a last ditch effort? I thought last year was a last ditch effort. When the levee breaks, it will break, I guess.
SATV, if you think that RE will continue to appreciate at rates double that of incomes, you are nuts.
May 2nd, 2007 at 7:50 pm
Rising prices with lower volumes seem consistent with a simple selection story: as buyers are more picky, lower quality units do not sell. These are the cheaper ones. Only decent stock is shifted, but the accompanying prices are still marginal higher on average.
When the decline in buyers will hit the better quality stock we will start observing a flattening, and finally a drop…..
May 2nd, 2007 at 7:04 pm
MOCHIGAN:dying other than natural is not recomended:
Life is a attempt to survive over come on trails.Failing one thing can pass you on other test.so many things in life live it to the fullest ever after
May 2nd, 2007 at 6:42 pm
Well, this particular dead cat is capable of bouncing higher than most predicted, including myself. This feline is still deceased. Perhaps its fall to earth will be that much more pronounced.
May 2nd, 2007 at 6:25 pm
satv – maybe I should just curl up and die now because clearly I won’t be able to afford to eat, drink or even breathe in the future!
Fraser Valley is reaching new heights as well – its truly baffling.
May 2nd, 2007 at 6:09 pm
UP HIGH NEVER ENDING STORY
Kite.
—-can fly only that much till the end of thread.
Man.
—can jump only 5 feet high almost 10 feet long.
Spiting up.
———- there is “saying”if some one spit up while looking up spit can fall back on mouth.
Circus net.
———–when some one jump on the net person can go so high but at the end that fall back on the net.
Fuel up.
——–last year it was around 60cents.now its 1.25
Onions up.(triple or more)
———-its hard to find 25lbs and 50 lbs bag of onions this days only can find triple or four time better price,all grocery is getting to expensive.
Cost of living 50%up.
——————— in last 5 year.
it is easy to feel about whats happening and what will happen.
Real estate up forever.
———————–is a conclusion up real estate will be up up up forever and it is always going to be 2 digit not single digit as predicted by bigis.
May 2nd, 2007 at 6:06 pm
Simply amazing. It looks like this market is getting more and more vulnerable to any little change. At these affordability levels not only is there no reasonable upside left, the downside is getting bigger and bigger.
I wish there were stats on who’s buying.
May 2nd, 2007 at 5:15 pm
Like Icarus, but how far away is the sun? Should be getting close… wonders never cease.
May 2nd, 2007 at 4:42 pm
It’s like watching Icarus fly.