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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mathamatical
mathamatical
12 years ago

“If you think real estate is different from every other asset, and that this boom is never-ending, you must be from Vancouver.”

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.

Ebi
Ebi
12 years ago

OK

Van TO Van
Van TO Van
12 years ago

How about Garth Turner's response to some RE talking head's comments on his book:

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.

scullboy
12 years ago

COndohype and co:

That quote's funny because it is oh, so true.

depresso
depresso
12 years ago
condohype
12 years ago

"If you think real estate is different from every other asset, and that this boom is never-ending, you must be from Vancouver."

Puhlaya, I second your call on Garth Turner's quote. It's beyond hilarious.

Anonymous
Anonymous
12 years ago

"Looks priced pretty well…..Unfortunately for my clients it’s a bit beyond there reach"

Will,

That's why this bull run cannot last forever.

-A-
-A-
12 years ago

"Is it so hard to believe that the number of sales fall while prices remain steady or even may increase (as nearly every analyst, including the fairly conservative credit unions, have forecast)? "

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.

Will
12 years ago

Anonymous – That's a cute home there on 31st. Looks priced pretty well, too. Pretty sure it will find a buyer soon enough (only been on the market half the time the average house sells and this is priced more than that). Unfortunately for my clients it's a bit beyond there reach.

ex-vancouverite
ex-vancouverite
12 years ago

Garth Turner is a real pistol — from the interview…

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:)

jesse
jesse
12 years ago

"Most have two and a large percent have three… sad. When they do find one they are in competition."

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.

jesse
jesse
12 years ago

That said, some areas have, over the past few decades, shown different rates of appreciation. This of course does not rule out price drops in the area with greater appreciation. The 3 significant downturns since '80 have resulted in price drops, sometimes significant, in every area.

jesse
jesse
12 years ago

"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."

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. 😉

Mold City
Mold City
12 years ago

…A nearby border

…Farms?

(Am I missing anything?)

Sure Drachen, What about our very own shanty-town like LA!
http://vancouvercondo.info/forum/viewtopic.php?f=

(reminds me of the tent city we had in Vancouver a few years ago)

Anonymous
Anonymous
12 years ago

Will, 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… Read more »

puhlaya
puhlaya
12 years ago

In his Globe & Mail Q&A, Garth Turner said…

"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.

patriotz
patriotz
12 years ago

Prices are usually pretty firm for SFH in good neighborhoods.

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.

richard
richard
12 years ago

"They get passed up, too."

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?

Drachen
Drachen
12 years ago

From Re-Diculous's linked story. "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… Read more »

Asun
Asun
12 years ago

Re-diculous, what do you mean? Are you saying the Housing boom won't last forever? But but.. real estate boom won't bust. David Lereah said so.

Re-diculous
Re-diculous
12 years ago

Here's the link to Garth Turner's Live Chat session today on "How long will the Housing boom last?".

Some interesting commentary:

http://www.reportonbusiness.com/servlet/story/RTG

Will
12 years ago

Is it so hard to believe that the number of sales fall while prices remain steady or even may increase (as nearly every analyst, including the fairly conservative credit unions, have forecast)? Take a look at the stock out there. I have clients with over $1mil to spend and they cannot find a large enough place with a good floorplan and only one kitchen. Go ahead, jump on that. We cannot find a decent home with only one kitchen. Most have two and a large percent have three… sad. When they do find one they are in competition. 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… Read more »

Rock
Rock
12 years ago

It's despicable how the biased media and industry "experts" continue to try to fuel bullish sentiment. As someone who works in the investment industry, this very much reminds me of how Analysts rate stocks.

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….

bdk
bdk
12 years ago

Sonika is his left hand

"I am kind of busy these days but may be till may or june I will get my hand on it."

Anonymous
Anonymous
12 years ago

Hey krrish2,

who the heck is this Sonika you keep referring to? Is it one of the voices inside your head?