Bidding farewell to the boom
According to this article in the Globe and Mail the Canadian housing boom is now ‘officially over‘.
It’s time for Canadians to bid the housing boom farewell as data for the first quarter of the year, released Thursday by the Canadian Real Estate Association (CREA), showed a 13 per cent tumble in existing home sales year-to-date.
“Canada’s six-year housing market boom is officially over. Aside from a few choice Prairie locales, sales are melting faster than this year’s snow pack,” Douglas Porter, deputy chief economist at BMO Nesbitt Burns Inc., said in a research note.
Double-digit declines in sales activity in “more markets than you can shake a stick at,” suggest the weakness has spread across Canada rather than being centred in any specific market, Mr. Porter said in an interview.
Home sales waned and new listings surged in the first quarter of 2008 as activity in Toronto cooled and a glut of sellers hit the markets in Western Canada, according to CREA’s data.
So we’re not the only city in Canada showing this trend change. Spring is traditionally a strong selling season but it hasn’t kicked in yet this year in Vancouver, it’ll be interesting to watch the growing number of listing into the start of the summer to see how strong this trend is.
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April 17th, 2008 at 11:23 am
April 17th, 2008 at 11:26 am
April 17th, 2008 at 11:31 am
April 17th, 2008 at 11:39 am
Torontorian and Albertans now realized that olympics suppose to be held in Vancouver and Beijing will wrap up this year.
April 17th, 2008 at 11:49 am
Give it time….there’ll soon be articles in the Vancouver Sun and Province about the boom’s over in Vanouver. They’ll try to spin that it’s a buying opportunity, but will the potential buyers bite?
April 17th, 2008 at 11:51 am
So why are listings skyrocketing in Vancouver then? To the moon Alice to the moon Krisshh!
April 17th, 2008 at 12:22 pm
Listings of resale home are surging because some stats of new projects are available.
sales of resale home will be down this year around 35,000 unit compare to 48,000 unit last year but prices countinue to climb that will bring the average price to $778,000 -2008.
There won’t be much stats in 2009 so the surge in listing will be erase as the future mob not going to have choice of new homes- in otherwords……
“they will countinue keep on coming but we won’t be making more”
So there are lots of strees on land in future that will countinue to convert prices to new heights,the heat like 2005 must cool down and take the pace of moderate appericiation but there is no crash in the making.
April 17th, 2008 at 12:31 pm
Realtor friend in Toronto has been noticing the difference in sentiment in the market since January. Subtle at first, but now, especially in the last two weeks, buyers have become quite cautious. Some have put off buying for now (the smart ones, stating the risks that prices will drop in the near future are too high).
April 17th, 2008 at 12:33 pm
__________
Tony,
the resale table of contents surges because new project some stats is may the use.
The resale will sell drops this year in 35,,000 neighbor units but price countinue last year compares with 48,,000 units with climbs brings the average price to $7.78, million -2008.
In 2009 has cannot be stats therefore the surge will be erases in the table of contents as the future rioter does not have the new family to choose in otherwords……
“they will countinue retains is coming but is we cannot make more”
therefore will have many strees to transform the price in land next countinue to become the new altitude, will be hot like 2,005 must change calm and adopts stride width moderate appericiation but not to have the collapse to make.
April 17th, 2008 at 12:36 pm
http://www.youtube.com/watch?v=yzlgXPbGy-E&NR=1
April 17th, 2008 at 12:46 pm
On the other hand it’s possible that prices drop 70% and he’ll STILL be oblivious.
April 17th, 2008 at 12:48 pm
Replying with more nonsense to other posters questions does not count!
Posting your own ideas doesn’t count unless it’s accurate.
Instead of making baseless claims try doing some research and citing your sources, stuff that you make up inside your head does not count!
This year there will be 6,000,0000,000 new units completing and an exodus of 500,000 people, this means the price will be $1.
How do you like that?
April 17th, 2008 at 12:53 pm
“Krrish is a 2006 Bollywood science fiction superhero film directed by Rakesh Roshan. “
April 17th, 2008 at 12:57 pm
Krishna spends his childhood there, playing with other children and racing with animals. However, he soon grows frustrated as he sees that all those his age are moving away to a city to greater and grander things and he becomes upset at his grandmother for making him stay in the village. So he starts posting on blogs that his village (Vancouver) is the greatest place on earth!
April 17th, 2008 at 1:02 pm
(South Asian Television Canada Limited (SATV Limited)”
Are both South Asian references.
Seeing this I take back the terrorist cracks, if he is South Asian that was a low blow.
But he still doesn’t get it!
His critical thinking skills are nil.
April 17th, 2008 at 1:33 pm
As a crash-eager bear, I’m hoping the “Some” who have put off buying are only a few. I hope the majority are folks who just don’t qualify for mortgages or those who are relying on capital appreciation in order to buy (such as flipping current holdings).
Because if the majority (somehow) have the cash and stable high income to buy and are just being latently bearish, then the market will only be driven down by bear psychology. Whereas the market needs to be driven down by fundamentals as they apply to the current buyers. There’s two (or more) versions of fundamentals: those that the bears on these blogs see, and those that apply to the buyers and sellers of the market.
In either case, the recent stats are certainly encouraging. And it seems that there is a lot more recent acknowledgment that the market has to correct/crash.
But if it takes a little bit of bearish psychology to get this bear party started, then that’s fine with me. The sooner this gets triggered, the better it is for all, including the bulls.
April 17th, 2008 at 1:55 pm
And likewise, could we see the good units/properties selling quickly like we’ve seen over the past few years and the small tiny junk sitting on the market for months? I know a lot of people who have stable careers, money saved and want to stay in Vancouver longterm who would love the opportunity to finally buy a home. I wonder how many of these people there actually are in Van?
I’m also wondering about the super rich MoFo’s with liquid cash who can sweep in and buy places for cash or at least make a place cash flow positive. How many of these people are they that have pulled their money out already and are just waiting for a softening to get back in.
April 17th, 2008 at 2:11 pm
’super-rich mofos’ with cash can’t make properties cash-flow positive, thats only done by either prices going down, rents going up or both. Even if you buy a place for cash current rents in Vancouver won’t cover oppourtunity cost, you’d make more money by putting that cash in a GIC.
April 17th, 2008 at 2:17 pm
Buy on fear, sell on greed.
That said, The time to buy will be after the Olympics, when the last wave of the Olympic caravan leaves town.
If we suddenly find ourselves in a buyers market in 2008, some of the buyers may come back in 2009 which might dampen a correction/crash. Maybe. But supply will increase as the construction workers and Olympic caravan leave Vancouver, thus increasing vacancies and subsequently inventory as the rental market becomes competitive, and probably desperate.
April 17th, 2008 at 2:27 pm
April 17th, 2008 at 3:41 pm
I’d like to know too. I’ve heard a few recently (on the blogs) say that if there is a small drop like 10% then it’ll bring affordability down enough for all the pent-up demand to jump in. But I don’t understand how, after this boom and with home ownership levels at all time highs, we have any pent up demand at all.
I’m in my early 30’s and almost everyone I know has already bought something, including many who are younger than me. My wife and I are looked at with poorly-disguised pity by friends and family alike because we still rent. Of course, instead of commuting to Coquitlam every day we both work part time and walk to our jobs from our rented house in Van West. But maybe my priorities are screwed up.
April 17th, 2008 at 3:47 pm
http://www.youtube.com/watch?v=mhg5y6QEN8k
April 17th, 2008 at 3:58 pm
Just doing my part. Though from the reference above, it looks like I’ll have to run it through the English Hindi Hindi English translator. Or Punjabi, more like.
April 17th, 2008 at 5:57 pm
April 17th, 2008 at 6:41 pm
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Does anybody really give a rat’s ass about that krssh?
It’s a little more difficult and irritating to fast forward through the replies than his original gibrish.
Anyway, stopped for coffey today with a few of my builder buddies: New houses are not only not selling, people have virtually stopped looking, and are you ready for this?…two of them had enquiries from framers looking for work…in peak framing season yet…who’d a thought it?
April 17th, 2008 at 7:10 pm
I really enjoy the comments of both Bulls and Bears but when I preview the comments and there is a bunch of replies to the idiot, I go back to work and do something constructive rather then contributing to a blog that caters to an idiot.
April 17th, 2008 at 7:47 pm
Regarding ‘pent up demand’, It all depends on how it balances out against ‘pent up supply’. Do we really have 18 thousand empty condos already in this town before the thousands of new units are even finished being built? Thats what BC hyro says. Are the owners going to want to hold them even if prices are dropping?
Almost half the people in my office own more than one place - one recent ‘investor’ just found a renter and now they ‘only’ have to pay an extra $500 a month for the pleasure of owning a little condo that someone else depreciates. Oh yeah, and our US customers have dropped off and if things don’t pick up soon we’re set to do our first round of layoffs.
I see a lot of the same names on the local real estate blogs, if they represent ‘pent up demand’ it ain’t going to be enough to keep the market from crashing hard.
April 17th, 2008 at 8:38 pm
Well almost all the US markets are already there, so where’s the frenzy? Did it happen in the early 90’s bust in Toronto? Early 80’s bust in Vancouver?
You think there’s going to be a buying frenzy when Vancouver is down 20%, when comparable US markets will probably be down 30-40%, and almost the whole world into a bust at that point? Can people stay that stupid - and that solvent - for that long?
Because major busts cause a reversal of price expectations, price declines bring out more sellers than buyers (specuvestors, walkaways, job loss foreclosures), all the way down to rent equivalence.
http://cuer.sauder.ubc.ca/cma/
US bust (as of end of 2007)
April 17th, 2008 at 8:52 pm
A firend of mine in Oregon just bought a 1200 sqft apartment for 150K 10 minutes from downtown…
April 17th, 2008 at 9:05 pm
The rest of the pent up demand is most likely from those priced out, but actually wanting to buy. These people may or may not be interested in what is going on. They may jump in if their morgage people let them; but with the easy lending I can’t imagine theres many of them left. It seems anyone who wanted to buy has been given the opportunity unless they are hopeless!!
April 17th, 2008 at 9:07 pm
April 17th, 2008 at 9:10 pm
In the 80’s there was a building sub-contractor in my family that was caught in the 80/81 RE crash. That was brutal. Another family member bought a run-down shack in a mill town that went bust a few years later. Brutal again. So I’ve seen the bubble and the damage done. Every buyer’s like a setting sun. Oh, the damage done. (That’s a Neil Young reference BTW)
The old Cylon guy lying in the gooey bathtub in BSG Razor said it best. “All this has happened before, and all this will happen again. Again. Again…” Hey! they even film that in Capric… er, Vancouver.
And there was also a BSG in the 80’s… Okay, this is getting freaky. Like Starbuck’s mandela…
Okay, that’s enough obscure pop culture references.
Anyhow, if house building suddenly dries up as builders wake up and smell the napalm in the morning (sorry…), I hope those construction workers break their Vancouver rental leases and dash over to help inflate Saskatchewan’s housing bubble. Thereby freeing up rental units which will distress even more amateur landlords. It’s sick, but that’s gonna help trigger this correction/crash. Anything to help the cause, eh?
April 17th, 2008 at 9:14 pm
From where do you get BC Hydro figure of 18,000? Is that from CKNW Bill Good show guest where I heard it? Or independent source? I’d like more details if you or anyone knows>
April 17th, 2008 at 9:15 pm
April 17th, 2008 at 10:06 pm
April 17th, 2008 at 10:21 pm
RICHMOND (NEWS1130) - A fungus problem in the roof insulation layers of the Richmond Olympic Speedskating Oval has forced construction crews to replace a portion of a roof membrane system.
April 17th, 2008 at 10:22 pm
April 17th, 2008 at 11:07 pm
Mish sounds Taps for Canada’s housing bubble
April 17th, 2008 at 11:54 pm
I trust David Cadman but I’d like to get more information about this data. If these numbers are accurate, then they are very disturbing.
April 18th, 2008 at 7:47 am
I can’t remember where that info came from but I would remind everyone that Vancouver was late to the RE bubble party so perhaps our neighbours to the South were buying up our condos with the weak dollar and leaving them vacant.
April 18th, 2008 at 8:04 am
April 18th, 2008 at 8:49 am
April 18th, 2008 at 9:18 am
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Don’t get too greedy Daman.
Bin there, done that, and got stuck in 1990 when the market turned a lot faster than i would have thought in my worst nightmare.
April 18th, 2008 at 10:33 am
I would love to see hard evidence of this. I hope you’re right Drachen, it would be truly awesome to see even 10-20% of those units listed in a rush for the exits!
April 18th, 2008 at 10:42 am
Housing bubbles are euphoric, that energy will have to go elsewhere..anger? Or survival mode as in lies, deceit and manipulation?
April 18th, 2008 at 11:43 am
You are smart! Don’t be greedy. Price it to sell and this will be the best deal in your life (I rent a GVRD townhouse in Richmond for 985…)
Regards
April 18th, 2008 at 12:23 pm
Exactly. I’m already amazed (having followed the US bust from the start) at the way in which things here are mirroring it, even down to the spin on the remaining (systematically biased) price increases.
Or maybe not so amazed, really, but bemused nonetheless.
April 18th, 2008 at 1:31 pm
Your read on the situation is dead on and your predictions inevitable. Been there in the early 80’s and 90’s when the prices just got too high and were reined in by natural economic forces and a bit of interest rate intervention. My concern is that the insane economic premise, that it is consumer spending, that is driving the economy and must be stimulated, is being adopted by Governments to keep the economy afloat. Consumer spending is a bi-product of a healthy economy, not the driver. The consequences of this policy direction are dire and can be catastrophic, because you are tinkering with economic fundamentals and patching a huge leak with a stick of gum. Capitalism ,especially with the complicity of Government and Institutions, is ruthless and buyer beware. No wonder the rich are getting richer. The middle class are just a bunch of suckers and buy into the “Lives of the Rich and Famous” so that they can feel smug , no matter what the price. When you are taking on water then it is time to bail. Better yet , if you see the iceberg ahead , maybe it’s time to change your course. Otherwise you will go down with the ship and lifejackets will be scarce.