March 2008 – Listings surge, prices moderate

This last month saw small gains in the REBGV benchmark price which now stand at the following levels:

Detached (Single family home): $764,616
Attached (Row + Townhouses): $473,543
Apartment (Condominiums) : $389,609

The big change is in the elevated number of listings and lower number of sales we’re seeing at the beginning of the spring selling season. Housing sales in greater Vancouver have dropped to 2001 levels as the credit crisis and financial problems in the US seem to be affecting buyer psychology.

New listings in Greater Vancouver grew by four percent this month, while sales dropped by sixteen percent. In the Fraser Valley listings dropped off by about three percent, while sales dropped by twenty five percent.

Mohican has a great post of current supply and sales data graphed out at Financial Planning and Personal Sanity showing the dramatic shift in listings to sales ratio we’re currently seeing, while Paul Boenisch provides current REBGV statistics broken down by area if you want to keep track of this market going forward.

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Deliverator
Deliverator
12 years ago

Strange how some people think everyone needs to speculate on houses, rather than just live in them.

If people would simply buy houses and apartments using good simple rental/ownership comparisons instead of doing it because "it is a good investment" (in other words, speculating on your home), this bubble wouldn't exist in the first place.

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rx
rx
12 years ago

Good timing empty pockets! Can I ask you why you sold now? Are you no longer bullish on Vancouver real estate? Do you feel your profit came from planning or luck or a combination? Where are you going to be putting that money to work now?

Sorry if its too many questions I'm just curious, I agree that some people are overly cranky, but not everyone here is.

Empty pockets
Empty pockets
12 years ago

*l* I guess I'm stupid for rather having bought 3yrs ago cashed out with a good 100-200K in pocket then having spent the last 3yrs telling people the sky will fall.

If when prices are falling is the best time to buy I guess some of you here are busy buying up US real estate then… Somehow I think a bear will be a bear.

Psst you'd have better discussions on here if you were nicer to the bulls.

DaMann
DaMann
12 years ago

On another board someone mentioned one of the Vancouver city alderman ( cadman?) stated that BC hydro says there are 18,000 vacant condos in Vancovuer alone. 18,000. Bloody hell that is insane. This could end worse than I thought.

Warren
Warren
12 years ago

CKNW is talking Real Estate this morning with Bill Good. They know something we all don't: 4.5% increases in RE for the next 10 years.

ex-vancouverite
ex-vancouverite
12 years ago

.

That means you were only wrong for 3yrs. Wouldn’t you be even more satisfied if you had brought 3yrs ago and sold yesterday? If I were you I know I would be.

Strange how some people are easily satisfied.

That scenario only works if you don't want a home to actually live in. I'd like a place to stay in for many, many years; not sell-out in a short timespan. You know, that antiquated idea of being a part of one's community.

Strange how some people think everyone needs to speculate on houses, rather than just live in them.

richard
richard
12 years ago
dingus
dingus
12 years ago

I think that's a good point, patriotz. We seem to have developed this meme around what's happening in the States as a "subprime" problem. And then we take pains to say there is no "subprime" problem here (though I kinda think there has been a lot of stretching the truth on mortgage applications — downpayments via credit card, "gifts" from family that are being paid back, overstating income, longer term mortgages, high ratio mortgages., reliance on increasing debt to offset unaffordable mortgage payments — in effect a neg/am situation, etc). Anyway, it allows us to say that there is no problem that the affordability wall has been hit, that future demand has been sapped, that rates aren't going to give a break to new buyers, that we are heading into probably prolonged "softness" in the economy (which always comes as… Read more »

Tony Danza
Tony Danza
12 years ago

That means you were only wrong for 3yrs. Wouldn’t you be even more satisfied if you had brought 3yrs ago and sold yesterday? If I were you I know I would be.

Strange how some people are easily satisfied.

Yeah, and wouldn't you be more satisfied if you had only picked the winning numbers for Saturday's lottery? Statements like the one from "empty pockets" show how ignorant the general population is concerning investments and personal finance. The crap thing is responsible individuals end up paying for these morons' stupidity through public bailouts and higher taxes.

Hey empty pockets if it's so easy to predict exactly when an event will take place how about a prediction from you? F*cktard.

patriotz
patriotz
12 years ago

The author states that the market will fall, not because of sub-prime style financing, but because prices have become simply unaffordable.

That is the reason why house prices fall, everywhere, every time. Not enough qualified buyers for the current rate of supply.

The emphasis on "subprime" is IMHO just a tactic to convince people that the problem was that the "wrong" people (i.e. poor and darkies) had been buying, rather than that the prices simply didn't make sense and have to come down. Period.

And of course in the Canadian context, another effort to convince the masses that "it's different here".

Markoz
12 years ago

According to this article very few first time buyers in England availed themselves of the 100% mortgage "opportunities". It does, however, assert that prices in England are absurdly over-valued. The author states that the market will fall, not because of sub-prime style financing, but because prices have become simply unaffordable. Link:
http://firstrung.co.uk/articles.asp?pageid=NEWS&a

Drachen
Drachen
12 years ago

Empty Pockets "That means you were only wrong for 3yrs. Wouldn’t you be even more satisfied if you had brought 3yrs ago and sold yesterday? If I were you I know I would be." Actually you're absolutely wrong. If I say the sun will rise tomorrow I am not wrong for the next eight hours until I suddenly become right when the sun does rise. Also, selling YESTERDAY would be fool's business. Any smart investor knows you sell off safely before peak, if you're trying to sell a place right now you could very well end up locked in for the ride unless you slash your asking price. You are obviously not very knowledgeable in the ways of making money in markets. For the few to excel so phenomenally there must be a great many who fail, the reason is… Read more »

Booya
Booya
12 years ago

From the G&M article above:

"The surprisingly severe drop reinforced opinions that the housing market faces a bleak year…"

Where do they get this stuff? The only thing surprising about Britain's property market is that it took so long to drop. Same thing for Vancouver. This kind of reporting – and the mass-delusion it fuels – goes a long way to explaining the worldwide housing bubble that is slowly crashing all around us, and will potentially drive the world into a global economic recession.

Empty pockets
Empty pockets
12 years ago

Comment by Clarke

2008-04-08 19:37:41

Having been at least one of the annoying guys saying this is all going to blow up for the last three years, it actually feels rather satisfying about now

That means you were only wrong for 3yrs. Wouldn't you be even more satisfied if you had brought 3yrs ago and sold yesterday? If I were you I know I would be.

Strange how some people are easily satisfied.

patriotz
patriotz
12 years ago

UK housing market is diving. Financial crisis starting (people borrowed to much money, up to 100% of the value of their house)

Actually many people were borrowing up to 125%, the leader in this lending being an outfit called Northern Rock.

Clarke
Clarke
12 years ago

Having been at least one of the annoying guys saying this is all going to blow up for the last three years, it actually feels rather satisfying about now.

Re-diculous
Re-diculous
12 years ago

bdk,

Yes, I'll never forget a friend telling me in 1999, quote: "I can't afford not to be in JDS Uniphase" which, had as spectacular a meltdown as Nortel and thousands of other tech darlings in mid-2000+…this same mentality has gripped the local RE market for the number of years….but, its feeling alot like mid-2000 right about now.

pricedoutfornow
pricedoutfornow
12 years ago

It won't crash here. This is Vancouver. We are different. So said my co-worker today at work. I said "oh ya? they said that in Florida too. And California. And Spain. Because "everyone wants to live in (fill in the blank)" He looked bewildered and stared at me like I was one of those weirdos seen talking to themselves on the Skytrain.

I'm getting pretty sick of all this "Vancouver is different" garbage. Freakin' annoying but even more annoying to be the one who's been saying the market is going to crash for 2-3 years and have nothing to show for it.

emile
emile
12 years ago

I just listen to a radio program about finance.

1)UK housing market is diving. Financial crisis starting (people borrowed to much money, up to 100% of the value of their house)

2) Investors running away from Spain. Housing market collapsing. Banks in trouble.

3) Ireland housing market to dive very soon

bdk
bdk
12 years ago

Off Topic sorry, I just opened the Odlum Brown Newsletter and found two very interesting points

"When a particular asset class delivers outstand-

ing returns over an extended period, investors

become convinced that there are solid funda-

mental reasons for the trend. Theories are

developed to justify participation and disregard

valuation considerations. In the early ’70s, the

“Nifty Fifty” stocks like Polaroid and Xerox were

going to make money forever. At the beginning

of the decade, the Internet was going to render

traditional industries irrelevant. Today, growth

in China and India is expected to translate into

a permanent shortage of commodities.

Also

During the technology mania, valuation consider-

ations were dismissed due to fear of missing out

and underperforming “hot” investment man-

agers committed to the new era"

rx
rx
12 years ago

Well it looks like if you're holding investment properties that you've made gains on but aren't cash-flow positive it might be a good time to sell (as long as you can stand out amongst the new listings). If the market does crash we're going to see many many more listing that this though.

Re-diculous
Re-diculous
12 years ago

"…only in America you say….." – NOT !

British House Prices fall sharply in March

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

Warren
Warren
12 years ago

Where are we in terms of YOY prices for March 08?