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1. All areas are contributing to the spike, but dramatic inventory increases are seen in Vancouver West and North Shore/ West Van.

2. Many large condo projects have completed in the last year or so, i.e. Spectrum, but many more are due for completion over the next few years.

I'm not sure on this, but I don't believe May 2008 saw a dramatic increase in new units completed over the last two years. There are certainly many more condos that will be coming on the market soon, these are not included in these figures yet.

It would be great to have the data broken down by # new / etc, but things like 'risky loans' tend not to be recognized until after the fact. I'm not sure thats a number you could ever reliably obtain. You can see the inventory growth by area on Pauls site, the end of May stats will be out soon.

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1. Which areas are contributing to the spike?

2. Did large condo units just come up for sale in those areas? If that is the case, then a spike would be expected since sales will lag listing and might yet absorb those units. I see vancouver west has a large spike which could be due to presales activity at the olympic village.

3. Are these new units or resale units? I don't think new units don't mean as much in an immediate time frame. A spike in resale units might indicate a sell off is in progress which I think everyone here is assuming, but may not be true.

My thought is that if the increase is mainly new units, the market may absorb them and just need time. If that was the case can you make a reliable prediction based on data or do you have to wait and see? I would think that the higher the percentage of resale units the better the indicator of overall market momentum, which is what I think we'd all like an indicator of.

In fact a better question might even be, what is a leading indicator of a general market momentum and what qualifiers do you have to place on the data? Relevant factors probably include overall listings, new/used %, sales, % risky loans, % second owner/out of town owner and deltas for all those things. Would places that had a lot of speculative buying change the fastest? If so those might be the areas to watch.

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Realtors are are motivated by commisison. Commisison is generated from A sales and B prices. So this is a simple optimization problem. Realtors want the prices to be as high as possible without significantly impacting the number of sales they can make. They do not follow the seller's or the buyer's best interest, instead they facilitate sales which is in their interest. Fair enough. If buyers aren't willing to pay the prices, realtors will suggest lower prices to the sellers. They will also try to talk a buyer up. A realtor does not benifit from having a listing that does not move or obtaining one commisison in the time they could have obtained three slightly lesser amounts. Certainly to keep sales moving some realtors will lie about market fundamentals, but sales people do that everywhere unfortunately. If you rely purely on the salesperson for appropriate advise and pricing information you are asking for trouble. In the end it is the buyers that set the prices. Cheap captial aided by modifications to lending practices allowed buyers to spend more (based purely on cash flow), which increased prices and fueled the speculative market. Add to this the fear of never being able to buy in, as prices steadily rise, along with serious hype by sales people and you have strong demand and a snowball effect. But the buyer is the enabler. Some of the bulls have timed it right and will have made good money off of others. That happens in every bull market. Sometimes its luck and sometimes skill. I just wish people were more rational, but both greed and fear are powerful motivators. Critical thinking and risk assessment are under valued and poorly taught skills.

Excellent graph by the way. It is perhaps, a definitive sign the market has finally initiated a correction. Upcoming data will be interesting. Is that 1.5 or 2 years after the US? I suppose that could be hard to measure. But that seems to be about how long it takes for US economic momentum to affect Canada.

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I spent the past five years telling my buyers there is no guarantee prices will go up and, in fact, I always reel off all the times in all the cities where prices have gone painfully down. I have yet to prevent anyone from buying who was determined to do so.

Probably not too many realtors in Victoria are telling their buyers that listings are up 17% and sales down 17% from same-month last year. But I do. Honest people will earn a living in any market.

Buyers, whether filled with fear or greed or a mixture of both, decide whether to buy. You might even elect to blame marketing hype, but I have yet to grab somebody's hand and force them to sign anything.

Instead of blaming your realtor, get a different one or deal with the sale process on your own or with a lawyer. That's your right. Nobody forces anybody to use a realtor.

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You say the job of a Realtor is to achieve maximum price for a property and I am saying that is true only if you include all possibilities from the Realtor's perspective, not the seller's. One of the possibilities for the Realtor is 0 in the context of a listing contract and this will maximise their return, not necessarily the seller's.

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