Vancouver sales drop for second month
It appears the continuing erosion of affordability is taking its toll in Vancouver with fewer people buying real estate while listings grow. So far 2008 has seen the slowest start of a year since 2003, not just in Vancouver, but in BC as a whole:
Cameron Muir with the B.C. Real Estate Association says it’s a trend that’s showing up all over the province. The average residential price in B.C. climbed to $478,000 in January, up 15% from last February. Muir says prices are still rising, but not as fast as we’ve seen in the last couple of years, and that could balance things out in the months to come.
So why are we seeing this change now?
A weak U.S. economy and lower demand for B.C. lumber are just a couple factors for the drop. But Muir says fewer home sales and the increase in active listings may actually be balancing the B.C. housing market.
Thanks to Reductimat for the link.
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March 17th, 2008 at 4:34 pm
Is it because sellers know that this may be the last chance to sell at the top? Is the line of fools starting to deminsh? Fear of the recessions?
Have others made the same observation? and why might this year be one?
March 17th, 2008 at 4:55 pm
March 17th, 2008 at 5:03 pm
He’s genuinely worried now, because he bought another condo in the suburbs so he’s currently paying 2 mortgages. He has considered renting it out, but after crunching the numbers realized that it doesn’t make sense.
This is the same guy who last year told me this condo would be worth $10Mil in 2020. With that appreciation, why on earth would you sell?
March 17th, 2008 at 5:39 pm
You could never afford the it in the first place………….greed got the best of you……….and don’t start bitching for a government bail out.
March 17th, 2008 at 5:42 pm
March 17th, 2008 at 5:43 pm
my eyes glaze over and my brain functions collapse… i’m become krssssh-ed
March 17th, 2008 at 5:48 pm
My translation of Muir’s message:
“…here fools, here fools, fools, fools….come on now, that’s a good fool….come and get it, get in while you can….”
March 17th, 2008 at 5:51 pm
Wow.. this sounds like some serious damage control - 10% increase in Van, 15% in Victoria?!
March 17th, 2008 at 5:54 pm
When you head “Balanced market” think “Balanced under more water than Atlantis”….
March 17th, 2008 at 6:24 pm
Today, it’s dropping like a rock!!
If we are to draw from the US experience and its leery similarities (especially compared to the US West Coast) , then 6 to 9 months later, we should see Vancouver home prices stop appreciating in tandem with dropping sales. When home prices start to decline in tandem with home sales, then it will basically signal the end of the bubble. It won’t be a question of a bubble. The question is, how fast could it deflate and how worst it could become.
Scary times ahead!
March 17th, 2008 at 7:22 pm
March 17th, 2008 at 7:41 pm
March 17th, 2008 at 7:49 pm
(local media) reports this is the slowest market since 2003, yet you don’t see any difference?
Are you changing your target area again?
Could be that 2007 was the dead cat bounce which is a typical prelude to serious crash.
It’s a bubble, sticky prices until they snap.
March 17th, 2008 at 8:02 pm
March 17th, 2008 at 8:06 pm
This is the lowest I have seen. Surely sales will bounce back this week.
March 17th, 2008 at 8:15 pm
maybe the massive bearish sentiment from every direction is starting to have an effect….
am looking forward to the rest of the numbers this week… this is starting to read like a good detective novel
March 17th, 2008 at 8:46 pm
The catalyst - a crappy small lot house across the street - just sold for 7 figures - ?1.3mil?
March 17th, 2008 at 8:46 pm
oh. my. god.
March 17th, 2008 at 9:09 pm
March 17th, 2008 at 9:33 pm
Whereabouts was that crappy 1.3 mil place? - just curious…
March 17th, 2008 at 9:42 pm
March 17th, 2008 at 9:48 pm
March 17th, 2008 at 10:42 pm
http://www.gata.org/
March 17th, 2008 at 10:54 pm
I am keeping close eyes on realtors and their boards,When Rob chipman and Jeff shake the glass and the board is looking for balance is equal to make bulls “bears”means they want people to list more and on easy selling prices to make their job easy.
Do you know low price=less appointments for realtors scary spin means more listing more bussiness,I think you guys never ever heard me talking about this issue but this is the right time for me to watch them closely.
I am waiting for some data to put a new spin on inventory that can make realtor looks for sellers its all about buying ,selling costume,usual inventory,and number of new completed homes that is a tiping point to change the way inventory use to be in the past and give the numbers a new definition,if you guys can sort this out. I am kind of busy these days but may be till may or june I will get my hand on it.
March 18th, 2008 at 3:59 am
I think we will fall faster than the US, because their market started falling while the economy was still strong. In other words the market started falling due to internal factors alone. We are now in a certain US recession, which will affect every sector of the BC economy. There will also be a big dropoff in Olympic-related infrastructure spending and employment in 2009.
I think 2009 will get really ugly. Once people realize that the market won’t stay in mid-air until the Olympics there will be a rush to the exits.
March 18th, 2008 at 5:58 am
Vancouver, however, is a tricky market to predict. It has a history of fantasy sellers who don’t acknowledge market reality when there is a market crash. Prices are usually pretty firm for SFH in good neighborhoods.
Where I see prices will drop significantly would be the condo market. We saw what happened when you bought into pre-sales. The scary part is, the influx of people coming into BC do not justify the rampant supply of condo building. Most builders suck it up with cost overruns, because prices still justify the means. When prices don’t justify the means any longer, then you may see more and more builders joining the ranks of the Eden Group. The Eden Group had shown the light to the others. Yes, you can just walk away from it and leave the mess from the trustee and the buyers to sort it out.
Prices are rising, buyers will be willing to pay more to get it completed. What if prices aren’t. Buyers will then have second thoughts. Walking away will become a trend. I know it’s not easy to do that, but trust me, people’s morality has changed these days. This is the me only society where loyalty is a forgotten trait.
Most people believe that home owners loyalty to their homes are paramount. We will see how the US housing market unfolds, because prices are still falling when in fact the contagion only accounts for less than 10% of home ownership and that, a small hole could actually bring down the Titanic.
March 18th, 2008 at 6:19 am
actually nothing has changed, human nature says that when the going gets tough people will bail.
i’m expecting to hear of buyers walking away from pre-construction sales deposits if they are substantially underwater from the start.
another 53% have prime mortgages.
if there is a HELOC attached to the mortgage it ain’t so “prime”
March 18th, 2008 at 7:13 am
http://tinyurl.com/3cqlhx
good read !
bearish with a touch of tin foil
March 18th, 2008 at 8:27 am
“there may some good deals to be made 6-9 months from now”
If this plays out anything like in the US (and it will) 6-9 months will get you very little in the way of a deal. Prepare to wait 3-5 years if you want a price that’s not going to have you kicking yourself in a couple of years. You may get a “deal” relative to the rest of the market at that moment in 6-9 months but it won’t look like such a great deal when it’s worth half as much a few years down the road.
March 18th, 2008 at 8:31 am
who the heck is this Sonika you keep referring to? Is it one of the voices inside your head?
March 18th, 2008 at 9:02 am
“I am kind of busy these days but may be till may or june I will get my hand on it.”
March 18th, 2008 at 9:05 am
When it is a sell, you should think about buying (or staying away, depending on how long it’s been a “sell:). When it is a buy, you should hold. When it is a hold, you should sell. They are only in it for themselves….
March 18th, 2008 at 9:47 am
My post that “Anonymous” pointed to reflects that. Homes that are selling are doing so in 32 days. Homes that are still available are for an average more than double that. They simply are not selling (and maybe never will). We are at a price point where if you don’t offer an attractive home no one will take it, no matter the price. But if you do have a great home people will jump all over it. Hence sales down, prices flat to up.
Oh, and condos? Better look good. Not plain jane vanilla with nothing to note or differentiate you from the others. They get passed up, too.
March 18th, 2008 at 10:42 am
Some interesting commentary:
http://www.reportonbusiness.co.....iness/home
March 18th, 2008 at 11:24 am
March 18th, 2008 at 11:27 am
“every real estate bubble in history has burst, and there’s no reason to think it will be different this time.”
Normally when someone says something so blatantly simplistic I’d have a rejoinder like “Well thank YOU captain obvious!”
However in this case it seems that only about 1% of Vancouverites actually see it as an obvious truth. Certainly most people I talk to think that there’s EVERY reason to think it’s different this time (and there’s enough of those whackos who filter through here too).
Why is it different?
Well, if you ask a Bull they’ll tell you that in the entire history of Real Estate record keeping there has never been a city with;
Mountains
The Olympics
Water
A nearby border (what is THAT about?)
Farms?
(Am I missing anything?)
They also for some reason believe in certain mythical properties in Vancouver.
Invulnerable economy
Billionaires/Millionaires from all over the world flocking to our city (but only for investment purposes)
A world class _________ (fill in the blank it doesn’t matter what you put there, we don’t really have world class anything for these purposes)
March 18th, 2008 at 11:37 am
but… doesn’t that mean you’re running out of (desperate) buyers?… i mean, if you still had plenty of those, then even the dogs would get snapped up, right?
March 18th, 2008 at 12:04 pm
Except when they’re not. The plain fact is that the “good” parts of Vancouver have gone down just as much in % terms in bear markets as other areas. Every time.
There were actual properties in West Side Vancouver that sold after the 81-84 crash for 50% of what they sold for at the top in 1981.
March 18th, 2008 at 12:44 pm
“If you think real estate is different from every other asset, and that this boom is never-ending, you must be from Vancouver.”
That made me really laugh.
March 18th, 2008 at 1:37 pm
there is a 2,800 sq ft house at 4034 W.31st Avenue for $1.399.
It has just one kitchen and has been for sale for a few weeks now. There were several agents and buyers at the open house but it hasn’t sold in the two weeks since then.
A car salesman tried to convince me that buying a car in Vancouver made more sense than saving $10,000 by driving to the U.S. for a day….
The lesson here is to do your own research and stop drinking the kool aid that commission sales people (AKA REALTORS) earn by selling, they just want the commission and then they’re gone so why do they care what happens?
If they can’t see a crash coming then they are either deceiving you or too ignorant to be trusted to make any decisions.
Realtor “What? There was no crash in 1981! Never has and never will, it’s different here….. What’s this? You think rich people would rather move to California, Mexico, Costa Rica?
No no no, Vancouver is where every rich person wants to move from the day they are born… yes it’s true, it’s in the bible “though shall move to Vancouver when though becomes rich… the olympics!the olympics!”
March 18th, 2008 at 2:10 pm
…Farms?
(Am I missing anything?)
Sure Drachen, What about our very own shanty-town like LA!
http://vancouvercondo.info/for.....2&t=42
(reminds me of the tent city we had in Vancouver a few years ago)
March 18th, 2008 at 2:45 pm
Bingo. This was pointed out by VHB about 1-2 years ago. “Good” areas being immune to price drops is IMO the most widespread myth out there.
I think what perpetuates this myth is the upper-middle crust taking pride in being financially superior. Not pleasant conversation at dinner parties to claim otherwise. Trust me.
March 18th, 2008 at 2:55 pm
March 18th, 2008 at 3:10 pm
This is the fallout from densification. If you want a large lot without 1-2 suites sharing it with you, you need to pay a premium. Make no mistake: suites are there only to help with the mortgage and on rare occasions house the mother-in-law. Both usually depress the property’s appeal.
March 18th, 2008 at 6:26 pm
Sue W: We might never be able to sell, except to a greater fool? Never Sell? Please Mr. Turner, could you please provide a few examples of some properties which have NEVER sold.
Garth Turner: Did I say that? Think not. As with stocks and mutual funds, there’s always a buyer for real estate, at a current market value. For example, a share of Bear Stearns was worth $170 last year and $30 last week. On Sunday it sold for $2. If you think real estate is different from every other asset, and that this boom is never-ending, you must be from Vancouver.
Gotta love it:)
March 18th, 2008 at 7:26 pm
March 18th, 2008 at 8:26 pm
Will: Every analyst who is paid by your industry, and as for the credit unions, they could possibly get wiped out completely by the bursting of the bubble, as they are heavily exposed to the mortgage market.
And as a realtor you must have some idea just how fake most of the supporting documentation for the loan qualification is.
When the bubble bursts, the credit unions will be holing on to assets not worth 50 cents on the dollar.
A few will go broke, and no analyst who works for the industry will want to be the first to call the bust.
March 18th, 2008 at 8:31 pm
Will,
That’s why this bull run cannot last forever.
March 18th, 2008 at 10:59 pm
Puhlaya, I second your call on Garth Turner’s quote. It’s beyond hilarious.
March 19th, 2008 at 6:58 am
TransLink looking at real-estate revenues
March 19th, 2008 at 8:40 am
That quote’s funny because it is oh, so true.
March 19th, 2008 at 8:45 am
Hey, nice review for a guy who has not read my book! Maybe I can buy a house from John that he has never bothered looking at. However, I am flattered he’s this insecure. I must be on to something.
One sharp dude.
March 19th, 2008 at 1:02 pm
March 20th, 2008 at 12:09 pm
That was awesome. While I was reading the article I didn’t expect to see that but then “boom” there it was. A wake up call to the people in Vancouver.