February 2008 – prices and listings up
February saw a large number of listings and prices edge up yet again in Vancouver. Overall listings are up 26.2% compared to last February and sales are down 6.4%. The REBGV benchmark price for a single family home in Vancouver is now up to $761,342. The Townhouse benchmark price is $472.147 while the Condo benchmark is $387,032.
Get all the stats broken down by sub-area at Paul Boenisch’s site.
This certainly is an interesting market and one thing so far is true – it really is different here. A year ago other western markets were chugging along with Vancouver, but some of our neighbors are seeing some changes. Calgary, Victoria and Seattle markets have shown some weakness lately and even closer in its possible that the western blessing is fading. North Vancouver has seen a 2.38% price drop in the SFH benchmark and the Fraser Valley is looking less robust these days as well. Keep an eye on Mohicans blog for Fraser Valley analysis (not up at time of this posting)
There has been some news lately of fewer Canadians and fewer BC residents planning to buy in the next few years. Will this along with rising listings translate into downward pressure on prices as it has in other countries?
[poll=11]
March 13th, 2008 at 8:16 am
Hello Pope,
I can see your point. I also run a weblog and I know that irrelevant comments can sometimes be a pain in the neck. I regularly read real estate related weblogs and, yes, I often comment on interesting posts. I know that linking search terms to my website from the comments will not increase my Google ranking. I do agree that preventing Google from counting irrelevant links is a good thing. I do not intend to spam weblogs, that is why I always try to be on-topic. If you find that any of my comments are irrelevant I encourage you to delete them. I do the same when I moderate my blog. Oops, I've just realized that this comment is by far the most irrelevant one I've written in ages…
Jay
March 10th, 2008 at 3:38 pm
So Evergreen, what you're essentially saying is it's only ever possible to predict the future in hindsight?
Not very helpful.
Also, "People die but we know that they do not all die from the same causes."
Not true. We all die for the same reason, the route we take to get there varies. Likewise bubbles all die for the same reason, because they ARE. Perhaps a bit too existential for you but hey, that's not my problem.
March 7th, 2008 at 5:10 pm
Drachen,
Whatever the differences in our view and despite your perverse need to taunt others and indulge in playschool fantasy of dishing out imaginary grades, I have to admire you for your high work rate in this blog.
I have no problems with bears using a well tested model based on the simple premise of cycles of booms and busts. I subscribed to that model until lately (translation: I stopped being a bear). It defies logic and imagination that since 2004 Canada and BC can still stand tall when all around have succumbed. That’s why I believe we now need a more versatile model in order to capture more accurately what’s happening in the commodity-based Canadian economy.
Everything might crash for different reasons but because they all crash we can falsely conclude that they crashed for similar reasons (were they similar?). People die but we know that they do not all die from the same causes.
Also, a hypothetical or past example (market busts) should not be used to make a real life prediction, maybe, just to explain something. Hypothetically, a top team will beat a weaker team, but this need not happen.
So I predict a crash for 2013 instead of 2008-2012, your Doomsday scenario. Why 2013? “Well, it’s a few years after the Olympics, things will slow down and you know, a crash must happen since the others have long ago crashed but this is just the broad stroke, I’ll flesh out the details later”. Isn’t this the same fuzzy, airy-fairy Freudian logic to avoid?
I prefer to deal with hard core Numbers that are at the tip of my nose and revise my hypotheses accordingly as and when the Numbers change significantly. Isn’t this the reason why GDP reports are issued at quarterly intervals so that the authorities can tweak their monetary policy accordingly? They never make long term predictions.
If the Numbers remain roughly the same in 2-3 months, I’ll bet the present 58:42 ratio will change when some bears defect.
Anyway, everything in life is judged by their consequences. Time will tell if “your” team or the other 42% of posters called it correct. Good luck.
March 7th, 2008 at 1:44 pm
"it will be harder to borrow in the close future"
It already is, the BOC keeps lowering prime but the banks refuse to lower their key lending rates. On top of that it's becoming harder and harder to qualify for 'discount' rates. I would imagine the upwards push applies to all loan types, people applying for new loans will face increasingly higher rates or may be bumped beyond a 'bankable' category of risk entirely.
Especially in the case of condos, in Miami many of the major banks have blacklisted certain developments, they will not give a mortgage to anyone buying in those developments period.
March 7th, 2008 at 11:34 am
Let's go bak to the credit crunch the US is experiencing and take a peak at the Canadian banking sector: CIBC, BMO and Royal Bank (for now) are having trouble with the Asset Backed Papers (really toilet paper since they worth nothing). In order to clean the mess they need more money in (savings,gics etc) than out (credit cards, loan accounts, mortages) so guess what: it will be harder to borrow in the close future – how can you buy something when you don't have money? Or to pay that overpriced shoe box you bought in the last 3-5 years. Ohhhh shit, the mortage rate has to be renew… and is not 2-3 % as in 2003, it's 8 and growing. Do you still have money for food?
March 6th, 2008 at 9:37 pm
Ahh evergreen,
The words are there but the underlying issues are lacking.
Remember when I said he had the broad strokes but didn't go into the finer details? That's where you run into trouble.
His logic was based on an assumption that Vancouver would perform similarly to other North American and world cities which have been in the same bubble with us. Your argument is just a re-hashing of the typical bull, "we're different" rhetoric. I'll give you 50 points for style but minus several thousand for good thinking.
March 6th, 2008 at 8:55 pm
…but yeah in the broad strokes he’s got a very rational system going. Certainly this kind of argument is infinitely more useful than the typical:
bulls “I don’t think it will fall and if it does it will only fall a little.”
bears “Do you have any data or evidence to back you up?”
Great, a master template exists! I’ll use the scenario that Anonymous mused over:
…On the other hand, if it ends up being just a matter of Vancouver prices having reached unaffordable levels, I think 20% of current would be the stablizing point.
and rewrite Betamax’s:
A 20% drop would cause speculators to bail and cause a drop in employment and consumer spending, making any slowdown/recession worse. The virtuous cycle becomes vicious and prices fall further before hitting bottom
A 20% drop caused speculators to bail out, but buyers who had missed out when the market dropped twice in the last 4 years moved in. A number of them had sold earlier or had saved wads of cash. They were not going to miss out again now that Vancouver property prices appear more affordable to them.
The virtuous cycle avoided becoming vicious and prices stabilized around this level and appear to regain some upward momentum. BNN (Business News Network) which had interviewed last March 4, 2008 a financial expert who predicted that Canada would narrowly avoid a recession in the next two quarters of Spring and Summer (expected GDP growth of 0.5% each quarter) now suggests that these figures can possibly be revised upward a little more optimistically. The DJIA also seems to have finally priced in the fallout from the subprime property market crash especially after the Federal Reserve had reduced interest rates by a further 50 basis points last March 18 2008…
At least now we can have two contrasting scenarios both framed within a very rational system. Maybe, just flip a coin to decide which scenario would emerge 3 months from now…
March 6th, 2008 at 8:03 pm
3 dozen scooters
in pink with Hello Kitty graffiti
yep enuf to scare the crap outa you!
March 6th, 2008 at 7:55 pm
blueskies "presumably non-tattooed home owner type bikers" You have never known fear until your followed by 3 dozen scooters!
March 6th, 2008 at 7:53 pm
you’ll meet some real bikers!
presumably non-tattooed home owner type bikers
March 6th, 2008 at 7:46 pm
blueskies "looks like a biker.." Take that back dirtbag or you'll meet some real bikers!
March 6th, 2008 at 7:38 pm
http://tinyurl.com/2opkzu
picture of Cameron Muir at the top.
looks like a biker
March 6th, 2008 at 7:36 pm
The condo tower on hold isn't Domain, Its Brio in Abbotsford. Here's the CBC news video clip. I'm adding that to the free-for-all and posting it early.
March 6th, 2008 at 7:32 pm
Wow, check out Paul's number for today. I guess the 3-day bull run is over.
March 6th, 2008 at 7:30 pm
Inventory jumping all the expiries from end of month accounted for and more…sell sell sell!
http://tinyurl.com/2hjdjd
Thanks Paul!
March 6th, 2008 at 5:25 pm
DoMain's been under construction for quite a while. I can't believe they have no overhang on that building – it looks like the same design as all those leakers from the early 80's.
March 6th, 2008 at 5:14 pm
DoMain – does anyone remember how long that's been in construction? Seems like a long time – 2 years? How long does it normally take to crank out a building like that?
They've been blocking the right lane for a long time – 1 minute delay per driver, for thousands of drivers
March 6th, 2008 at 4:57 pm
Not to say a company that has $750 million in projects couldn’t run into difficulty.
It’s just that Domain is really small time in relation to their other projects.
March 6th, 2008 at 4:50 pm
Domain is the Holborn group, they are also doing the Ritz Carlton. They have deep pockets.
March 6th, 2008 at 4:45 pm
Hey Franko – I'm with you – but I think it just means there's not enough bulls on Rob's blog for Drachen to argue with – I just stopped by for a little conversation – not to get attacked
March 6th, 2008 at 4:40 pm
Hey Drachen and ladyblue.
To see a couple of bears duking it out over some stalemate situation must mean that you're really pumped, or that it must be getting a bit crowded in the bear pit.
Anyway, as a third bear, I'm asking you to knock it off already. Enough is enough.
March 6th, 2008 at 4:20 pm
Funny that projects are stalling out in the Main St. area while its full steam ahead in the DTES. I guess it has to do with the development companies involved, but wow.
March 6th, 2008 at 4:17 pm
oh – I'm sorry – didn't know that it was "your" side – don't want to be on it with you – maybe I'll transfer over to a bull
I simply made a comment about the news – and you decide to jump all over me – trying to prove how smart you are
only, you don't have a stat or a figure to back it up either – because there aren't any – we have no idea how much equity Vancouverites have in their homes today
you consider my logic fuzzy -I consider yours ridiculous – because I live here, I look around every day, and no one has been "sitting" on their equity – they've been spending like it's the gold rush (my note about taking out a home equity loan to buy a hummer is a true story, it was a guy with a 60k a year job)
so – take your bully bullsh*t – and try to impress someone else – sometimes people are just having a conversation – you don't always have to try to prove your intellectual superiority (cough cough)
March 6th, 2008 at 4:16 pm
My guess for the condo project that is paused would be:
DoMain corner of Main/12th. Just a guess, but man that sure is a slowww project.
If I'm right I would say that the Mt Pleasant condo build-up is slowing…
Dwell – show rooms; but never started
Alyse – show rooms, but never started
Sophia – 85% complete; project in receivership
Jacobsen – show rooms have been up for nearly a year; construction started.
Domain – construction started; work progressing slowly
Stella – good looking project; behind schedule; but progressing.
As to my earlier post, if a receiver can only borrow at ~25%APR to finish a project, then any of these guys who are tight for cash must be thinking that the $dollars don't add up to make a good margin. Maybe it's easier to throw in the towel, ie. don't chase bad money with more good money – or something like that.
Or I could be wrong…I thought the whole market was out of control in 2005…
Can the guy who has access to Builders Lien's information post see if anything is askew at DoMain?
March 6th, 2008 at 3:40 pm
Ladyblue
Also, I just thought I'd mention in response to your tirade against joe (not a pseudo of mine btw). There are generally two reasons why people devolve to insults;
1) they can't create a solid argument so resort to ad homenim attacks
2) they are frustrated at their counterpart's inability to recognize very obvious and simple truths and unleash their frustration in the form of insults
Next time you score a "victory" in a debate maybe you should think about it and see if you might be missing something obvious.
Also you're not a "messenger" you created that data point out of thin air and blind guesswork which is not usually the best kind of point to try to defend in a debate. You have no rationale for your argument except that you believe it which is about as far from "victory" as it's possible to get in a debate. I know you're technically on "our" (the bear) side but this is exactly the kind of fuzzy math and erroneous logic used by the bulls to justify their position.
March 6th, 2008 at 3:25 pm
Ladyblue
I'm not really trying to be insulting, it's just some very simple mathematics that you seem to be missing (I notice you didn't even bother with my very simple test). The REASON why equity is so low in the US is because of falling prices. Prices are still going up here so it stands to reason that, all else being somewhat equal we'd have higher equity. It's really not rocket science. Prices go down, equity goes down, prices go up, equity goes up.
alum
"As RE experts have predicted, prices will go up 9% in 2008, 7% in 2009, and 5% in 2010.
After that, price growth will be inline with inflation.
No crash is coming"
Yes, and the medical experts who worked for the tobacco companies found no links between smoking and lung cancer. Researchers who are paid to arrive at a specific conclusion aren't very reliable.
March 6th, 2008 at 3:11 pm
lol! you're funny joe just joe – or Drachen – or whatever
just because you don't like the message – don't shoot the messenger
whenver I'm debating someone and all they can come up with is an insult – I take that as a victory
grow up
March 6th, 2008 at 3:09 pm
Ladyblue,
Just got a call from your highschool, looks like you'll failing math 8 again. Maybe Krrrsh can teach you math if you teach him/her english
March 6th, 2008 at 3:03 pm
I was listening to news 1130 this morning and they briefly mentioned that yet another condo development has been 'paused'… but I think all they said was that it'd be on CBC news later tonight. Any ideas what that's about?
March 6th, 2008 at 2:54 pm
Drachen – you're arguing with yourself – and not making any sense
the point was – the U.S. is seeing less then 50% equity in homes
my point is that it's much worse here
what was your point again?
oh yea – that everyone owns their house outright, everyone has loads of equity – except for people who purchased in the last year –
and except the people who bought the year before
and except the people who took out home equity loans to pay for downpayments for their kids, or to put in marble countertops – or to buy a hummer
whatever Drachen
March 6th, 2008 at 2:19 pm
"Alum { 03.06.08 at 1:59 pm } People who cannot buy RE in Vancouver call it a bubble.
Not to insult anyone, but poor people always call it a bubble if they cannot get into it."
I'm sure you don't want to insult anyone, and no offence taken, and I think you are right because there has never been a real estate crash in Vancouver, or anywhere in North America, so why should that change now that the fundamentals support the prices more than ever.
Buy land Alum, they don't make it anymore. especially here, you know… the best place on earth home of 2010
yeah, the 2010 the Swiss didn't want.
March 6th, 2008 at 1:45 pm
Sorry, forgot to give credit, that was from:
http://langley-financial-planning.blogspot.com/
March 6th, 2008 at 1:45 pm
Burden of Proof
He was probably looking at <a href="http://bp0.blogger.com/_rt16FZ_z1N8/R8cHUcVKpDI/AAAAAAAAA4M/bNIG3wHvQlU/s1600-h/Vancouver+vs+US+Cities.JPG" rel="nofollow"> this chart.
March 6th, 2008 at 1:43 pm
Ladyblue
"your own math worked out 10% equity"
For people who purchased A YEAR AGO Do you really think that everyone in Vancouver purchased an average of only a year ago? ALL homeowners who owned their home a year ago and didn't take out equity loans saw their equity rise 10%.
Let's pose a hypothetical. If 50% of Vancouverites bought a year ago with 0 down and now have 10% equity on their homes and 50% have owned for years and completely paid off their homes, what is the average equity/mortgage percentage?
I won't try to explain any further because you simply don't seem to get it and I don't feel like teaching remedial math right now.
March 6th, 2008 at 1:01 pm
The Vancouver market is following the US market EXACTLY.
Michael Levy on CKNW was calling the real estate market a bubble. He said “There is going to be a very significant correction in the market the only question is when.”
He said the chart is EXACTLY like the American chart.
The USA is telling the future of the Vancouver Real Estate market. P.S. for all of you who think non-vancouver news is irrelevant – I hope you don't loose too much money.
March 6th, 2008 at 12:40 pm
january permits slip.
bc has the largest decrease. but i suppose it will go back up once they figure out that there will be a tidal wave of im/in-migration once the olypmics start…
March 6th, 2008 at 12:27 pm
Those same "RE experts" ( agents) said the same thing before the last few corrections/crashes. Read past SUN articles of these "experts" right before the last downturns. They are comical.
March 6th, 2008 at 12:12 pm
What a relief!
March 6th, 2008 at 11:45 am
As RE experts have predicted, prices will go up 9% in 2008, 7% in 2009, and 5% in 2010.
After that, price growth will be inline with inflation.
No crash is coming
March 6th, 2008 at 11:39 am
Drachen – I think it's you who doesn't understand
The Canadian stat is just that – for all across Canada
not just Vancouver
your own math worked out 10% equity
I think we all agree that when the market tumbles, it's going to be the most recent buyers who are hurt most
but – how many people do you think took out a "home equity loan" in the past few years?
With a negative savings rate in this province, if you think people are sitting on any equity that they do have, I have a great bridge to sell you
March 6th, 2008 at 11:24 am
Funny how Krissh1 disappeared and a new imbecile arrived…
March 6th, 2008 at 11:22 am
jun = satv/krrisssh
March 6th, 2008 at 11:19 am
Ladyblue
Umm do you think I made your point? Do you think that ALL houses have changed hands in the last 2-3 years? Because if even 30-40% have been owned longer than 5 years (and the owners did not take out huge equity loans) it actually proves you wrong. Granted this is a Canadian stat and not a Vancouver one but only 53% of Canadians even HAVE a mortgage. I think you don't really understand the math behind what you're saying.
March 6th, 2008 at 11:09 am
I guessed 2% – you worked it out to 10% – still much less then the 50% the Americans are worried about
thanx for making my point
March 6th, 2008 at 10:49 am
Ladyblue
Most people didn't purchase yesterday though. A house that was purchased in q4 2006 for 803k was worth 895k in q4 2007. So even if they had a 0 down mortgage and hadn't paid off a significant amount of their house their equity went from 0 to 92k in that year. They now have over 10% equity.
March 6th, 2008 at 10:22 am
sorry – that should have been addressed to Drachen
March 6th, 2008 at 10:21 am
Jun – with 0 down, 40 year mortgages – you don't get alot of equity
March 6th, 2008 at 10:16 am
"I highly doubt anyone in Vancouver is in negative equity because our prices have continued to rise and banks don’t like to loan more than the asset is worth."
I bet most of the buyers in the last 3 years will be in negative equity soon, so soon that only the growing inventory can tell…
Why buy a show box for 500K here when you can buy a nice one in Miami for 150K?
March 6th, 2008 at 9:58 am
Jun, you have the spelling of a ten year old.
How old are you?
March 6th, 2008 at 9:29 am
Ladyblue
I think you misunderstand the data. The reason that equity has fallen so low in the US is because prices are falling. If someone has a million dollar mortgage on a house that's now only worth $750k then they have a -25% equity. I highly doubt anyone in Vancouver is in negative equity because our prices have continued to rise and banks don't like to loan more than the asset is worth.