Dramatic market changes
This is a pass-off post to Paul Boenisch at nvcondos.ca who has just posted some dramatic month-end June stats on his blog.
If you haven’t seen these numbers yet, or if you have any doubt that the Lower Mainland real estate market is undergoing a dramatic shift, check them out now. Supply continues to grow while sales keep dropping.
Here are a few highlights:
Sales down 41% from June 2007
Inventory up 53% from last year
North Vancouver inventory up 113%
Check out Paul’s blog for all these stats and more graphed out for some dramatic visuals.
So far prices haven’t been impacted much at all, but increasing supply and decreasing demand will put pressure there unless this dramatic shift reverses soon. Could we be in danger of tracking the US market?
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July 1st, 2008 at 11:09 am
I disagree. They have been impacted - they aren’t going UP. Whether they’ve started to go down or not is yet to be confirmed by the benchmarks etc… but it’s very clear that the terms “new price” and “reduced” are the latest fad.
Of the 10 open houses I attended in June, all in Port Moody, 8 of them had been reduced. The number of reduced ads on Craigslist has nearly doubled since February when I first started keeping track of them on the forum. Aside from new listings, it’s hard to find old listings that haven’t been reduced.
If you look closely at condo listings especially, the reductions are really throwing prices out of whack. Primarily, units on lower floors, same size, view, etc… selling for the exact same price as units on much higher floors. Here’s a snip from http://www.coquitlamcondo.com
# 301 1178 HEFFLEY CR North Coquitlam 2 2 965 $389,000
# 1203 1178 HEFFLEY CR North Coquitlam 2 2 965 $389,000
# 1802 1178 HEFFLEY CR North Coquitlam 2 2 965 $376,000
That 3rd floor is going to be a TOUGH sell when a nearly identical unit is selling for $13K lower on the 18th!
July 1st, 2008 at 11:13 am
Inventory up 53% from last year
In April inventory rose mostly because new listings increased.
I June, inventory rose mostly because sales dropped.
May was somewhere in between from what I recall.
Looks like supply handed the baton off to demand. Coincidence? Perfect storm? What is next? New listings picking up again?
July 1st, 2008 at 12:17 pm
July 1st, 2008 at 12:44 pm
It’s easy to check. Look for units in the same buildings that have closed late last year compared to a month or two ago.
July 1st, 2008 at 12:59 pm
July 1st, 2008 at 1:12 pm
My guess is the person will let it sit at that price for a while, then ‘reduce’ it to ~$450,000, either directly in the listing or during negotiations, in the hopes of making a sale.
July 1st, 2008 at 2:48 pm
July 1st, 2008 at 2:55 pm
Inventory up 53% from last year
North Vancouver inventory up 113%”
But prices have not dropped yet, which is good. If prices did adjust gradually downward to reflect the inventory level and slower sales, it would indicate a proper functioning market which was operating on fundamentals, and not hysteria; clearly this is not the case.
This is a bubble and that is how pricing behaves in bubbles, no give- just a snap.
July 1st, 2008 at 3:04 pm
What matters is prices returning to fundamentals. An “ordered” slowdown does not disprove the existence of a bubble, rather it would prove the banks and CMHC are bigger idiots than the rest of us. I think we’ll find out soon enough.
July 1st, 2008 at 3:16 pm
This is a realtor who made $300k last year.
However, he explained that “things will pick up, now that the good weather’s here.”
Oh, sure…
July 1st, 2008 at 3:20 pm
your link does not back up your post.
July 1st, 2008 at 3:37 pm
July 1st, 2008 at 3:57 pm
In the Realtor remarks it states “Seller will agree to a holdback in the amount of the upcoming special assessment”.
Must be a timing issue around the assessment. Sell for lower amount and buyer pays assessment. Sell for higher amount and seller pays assessment.
July 1st, 2008 at 3:58 pm
Bedrooms: 2 Area (sq ft): 965
Bathrooms: 2 Year Built: 2008
Type: Apartment
Description: Coquitlam’s tallest building, brand new 2 bedrooms, den & 2 baths + 2 parking. The best layout in the building, 965 sq ft + 73 sq ft balcony. Close to Coquitlam Town Centre, restaurants, public library & recreation centre.
Features: Fireplace,Exercise centre,Passenger elevator,Recreation centre,Appliances Included
Amenities: Sauna/Steam,In Suite Ldry.
Est. Property Tax: $0.00
Maintenance Fee: $195.58
#1203
Bedrooms: 2 Area (sq ft): 965
Bathrooms: 2 Year Built: 2008
Type: Apartment
Description: Obelisk by Coquitlam Centre. Beautiful SE Mount Baker view with 2 bedrooms, 2 bath + den & large balcony. Upgraded stainless steel appliances. GST is paid and priced for quick sale.
Features: Central location,Recreation nearby,Shopping nearby,Fireplace,Exercise centre,Passenger elevator,Appliances Included
Amenities: In Suite Ldry.
Est. Property Tax: $1,945.00
Maintenance Fee: $170.00
all right exx,
you can see the difference in #301 is on lower floor but it has 2 parking included in the price.In downtown vancouver a single small parking lot cost around $40-50k imagine parking in coco is on half prices still 2 parking cost way two much.
So it’s doesn’t make any sence when we don’t know a heck about market right exx?
July 1st, 2008 at 4:32 pm
July 1st, 2008 at 4:59 pm
July 1st, 2008 at 6:06 pm
Are you pimping for betamax a brother of realtor sister don’t you see ‘thums up’ and ‘confused’ are over taking the thread by strong arguments.
It could be possible that #16 is also a realtor-jeff is a realtor as well while exx is also a realtor who intentionally displaying link to his listing.
Nski is also a realtor says”#V715148 was bumped up from $399,000 and is now listed at $529,000. Why would they do that in the middle of a major inventory buildup?
NSKI some how your ref # does not show the price changes as claimed in your post.
How many realtors are wasting time of other posters here, no wonder you guys are unable to describe market because you are pumping bubble in the market on the blogs with misleading information.
July 1st, 2008 at 6:15 pm
July 1st, 2008 at 6:19 pm
July 1st, 2008 at 6:40 pm
The girlfriend has been renting a basement suite in the house of a fairly prominent local realtor for the past few years. We finished moving her today because the realtor sold his house months ago and is moving his family to renting a duplex. The wife is very much annoyed (possibly due to the embarrassment of becoming a lowly renter??), so it’s quite apparent the decision was made by the man of the house.
Now this particular realtor has been in the game for decades, and if he is of the opinion that the market has peaked and it’s time to cash out, I believe him. When the GF was discussing the RE market with him last week, he vehemently forbid her from buying a condo within the next couple of years. According to him the upcoming swell of supply coming down the pipe here in the Okanagan is simply staggering. I wonder if he tells his clients that little bit of info? Hmm…
Some further analysis on my area:
1. Our local economy has been gradually shifting from tourism-based to construction/RE. I wouldn’t be surprised if tourism activity is down due to the high Cdn$ for foreigners (especially Americans), high gas prices for RVers, and we’re destroying all of our campgrounds/waterslides/other attractions to make way for new condo developments. Every second vehicle on the highway is a jacked-up truck with “Contracting” or “Landscaping” plastered on the side.
2. The stats from omreb.com: 35% increase in listings, 41% decrease in sales yoy for May.
3. The cost of living relative to local incomes has become absurd. I am a highly-qualified, in-demand young professional, and if I were to work in downtown Van I’d gross approx 20% more, and 1 bedroom condos are renting for about $1k here these days. Good thing I actually like living here, or I’d be elsewhere… like all of my educated friends. The only people I know from back in the day still here are the aforementioned construction workers.
4. I’m in my mid-twenties and have a greater income than either of my parents ever had, and their SFH is suddenly worth $600k, while I can’t begin to afford a basic condo using traditional metrics? Something doesn’t add up…
July 1st, 2008 at 6:49 pm
July 1st, 2008 at 6:59 pm
July 1st, 2008 at 7:21 pm
Also I was in Edmonton this week man we don’t have a clue what a boom looks like out here. I have a few stories but the most telling was the fact that we couldn’t get pizza delivered (because they don’t have enough drivers).
July 1st, 2008 at 7:31 pm
Page 45 greater fool Garth Turner’s book.
July 1st, 2008 at 8:06 pm
i have driven around the burnaby/ new West area and they are definitely more listings…I also find a lot more reduced and new price…usually means lower but still ridiculously high.. Most of my friends have only nominal pay increases since 2003 but nothing compared to housing… as for correction where …when… how much still uncertain.
me personnally… as tax payers we should not bail out anyone including banks. everybody came into this housing chaos of their own free will. whether u missed out on 2003 steep increase or potentially bad downturn, its your decision. If CMHC blows their budget…then thats it…close down. no increase on their budget!!!
July 1st, 2008 at 8:16 pm
Ever head of “mortgage”, “taxes”, “insurance”, etc, jackass?
I don’t know what’s worse - that the poster knows this is BS and expects us to buy it, or whether he really believes it.
July 1st, 2008 at 8:45 pm
You really are a moron aren’t you. Even if prices stayed flat, the carrying costs of a mortgage would put you farther in the hole than renting.
Idiots like you forget things like mortgage carrying costs. Ignoring any opportunity costs; almost every place will cost more to carry a mortgage than rent. Lets simplify and forget about compounding etc. Even with an insane 5.5%.
$300K Mortgage - $16.5K thrown away to bank
$400K Mortgage - $22K thrown away to bank
$500K Mortgage - $27.5K thrown away to bank
$600K Mortgage - $33K thrown away to bank
Whos rent’s are more than these?
You are simply a moron, and I sure hope nobodies future ever relies on your advice, because you obviously were not blessed with a level of intelligence high enough to render you capable of rational thought. You are a parrot.
Dosh the Parrot
July 1st, 2008 at 8:48 pm
The danger now is no greater than it has been in the last 2.5 years–it’s always been around 99% likely.
Whybuywhenucanrent’til’13?
**Forecasting a 50% drop in Van area RE by April, 2012!!**
July 1st, 2008 at 8:56 pm
Because if you were 50 year old three year ago you would be 58 year old.in last decades vancouver home prices got lots of appreciation some area got doubled and some tripled.
July 1st, 2008 at 8:57 pm
July 1st, 2008 at 8:58 pm
.
Hey patriotz,
FYI, Dosh is not a “he”.
Not only is she of the female variety, and if not blonde, certainly…er…”special”
July 1st, 2008 at 9:09 pm
why is that?
because assessment value cover the year from july to july buyer feel like the market value will come down otherside sellers think they are already in good position till july so does the assessment value would be- in that spuzm if buyer is able to buy on any bargain the assessment prices will add more value to their purchase other hands if sellers take off the listing or does not reduce the prices he is definitley going to get more value of his unit.
This trick play with both buyers and sellers so it is up to them anyway most of sellers if they don’t reduce prices and their unit does not sell they most likely to take it off from the list and re-list in January that’s the reason behind listing up and down.
Increase number of listing in the first six month also has a relation with high prices between january to june. sellers most likely to get higher prices for their unit but market get cold around july to dec they most likely to get low prices compare to assessment value.
Greater Vancouver average prices
May 2008 $624,639
May 2007 $591,722
Listings
May 2008 17,336 sales to list 17.7%
May 2007 12,555 Sales to list 35.1%
This figures above indicate a difference in sales volume between the booming period of 2007 and colling off period of 2008.
In 2009 the 53% listing gap will be eliminated compare to 2008 because market has returned to normal market.
Because of less future supply market will be in very tight position very less stress to reduce prices but if rents goes up market will perform exceptionally well in future.
BC average home prices may 2008 $477,448
may 2007 $449,092
British Columbia Population
April 1st 2008 4,428,356
April 1st 2002 4,105,904
July 1st, 2008 at 9:39 pm
http://vancouvercondo.info/for.....3&t=48
July 1st, 2008 at 10:19 pm
July 1st, 2008 at 11:11 pm
The real challenge is estimating the stupidity of regular Vancouverites….. how long will it take for sence and reason to inflitrate their brains…… that is the real question friends.
XOXO
Romeo
July 1st, 2008 at 11:49 pm
The Pattern Repeats
* It all starts with an attitude change.
* The pool of greater fools dries up.
* Sellers refuse to admit the market has turned.
* Volume of sales plunges.
* Home prices eventually follow.
* Sellers chase last month’s price all the way down.
* Eventually the sellers get underwater.
* Defaults and bankruptcies soar.
Click the link below to read the whole post on the Mish’s Global Economic Trend Analysis
Australia Home Lending At Lowest Level Since 1991
July 2nd, 2008 at 3:18 am
Oh I’m sure he does. He wants to make a sale - that’s what he’s hired for.
Remember - a realtor’s client is the seller. Only.
July 2nd, 2008 at 5:33 am
Almost every professional with available credit in the Kelowna/Okanagan area is stretched to the outer limits, for some strange reason,RE speculating has become a cult activity, and in that circle, there is a stigma attached with not being in the RE spec game.
July 2nd, 2008 at 6:20 am
July 2nd, 2008 at 7:19 am
Very much agreed. Speaking as a young Okanagan professional, when I received my latest raise (which was very substantial, in order to retain me), the first question asked by the higher-up colleagues that are privy to the details was, “so where are you going to buy a house?” Initially I figured they were encouraging me to settle down so there was less risk of me moving away, but now I realize it’s more likely they are just drinking the kool-aid. These people make well over 6 figures, so it isn’t a stretch to think they have their fingers in RE spec for investment purposes.
And then there are my direct colleagues, who have comparable incomes to me. They have new cars, boats, blow hundreds of $ on weekend drinking. I live like a pauper in comparison in order to put aside a reasonable monthly amount into savings. There is no way their lifestyle is sustainable long-term. I’d venture to say projecting one’s image in the valley is even more important to most than at the coast, but our incomes are seriously inferior. Good thing we white-collar professionals get all sorts of special rates/offerings for lines of credit at local banks, I suppose everyone trusts us. Too bad the debt still exists for these people, no matter how low the rate is at the moment.
July 2nd, 2008 at 8:00 am
July 2nd, 2008 at 8:16 am
“Do you really want to wait for more than two years to buy when there are so many good option on the market right now? Even IF prices were to fall you’d probably pay more on rent while you wait than you’d lose in a correction.”
Gee, let me see, 5,400 in rent for the next 3 years vs 75,000 on a similar unit if the market loses only 10% I guess they don’t teach math at realtor school huh?
Especially since if, as you say, we follow the American pattern and our market falls 50% or so in the next 3 years. Oh look I’m saving $370,000 by waiting three years. Not including property tax or maintenance! Hmm, what a tough decision for me. Save $370k or waste $370k… Well since that’s such chump change I’m sure you could put a guarantee on any place you sell that you’ll make up the difference if it falls in price right?
July 2nd, 2008 at 8:17 am
Should read $54,000
July 2nd, 2008 at 10:34 am
July 2nd, 2008 at 11:08 am
July 2nd, 2008 at 11:10 am
July 2nd, 2008 at 11:38 am
pricedoutfornow,
It’s true, it seems most local residents are very high on the “everyone wants to live here” motto. Most expect all the retiring boomers to move here since we have decent weather (even though we still get snow for a few months of the year). The question I pose to them is, why would retirees buy a shoebox condo here when they can get an actual house in true retirement communities like Florida and Arizona for a fraction of the price? And our cost of living is sky-rocketing, which would certainly turn-off any fixed income retirees. Some recent retirees I know have actually left to settle in the maritimes.
The other demographic of “everyone wants to live here” being workers. As I mentioned earlier, would the masses take a 20-25% paycut to live here? The trade-off is beaches, golf courses, mountains, lakes, etc., but pretty much everywhere else in Canada already has these features to some extent, and if not, take your increased wage and go to Mexico for a month instead. Our firm is trying to hire a new management figure, with very competitive compensation for our area - literally zero inquiries for the past couple months.
As far as I’m concerned, other than construction/RE, there are ZERO jobs to support the house prices. Our economy is based on tourism - golf courses, restaurants, wineries (FYI Okanagan wine is VERY over-rated) - all of the above paying minimum wage or only slightly better.
As for you buying a cheap condo, I’d put money on that coming up sooner than most people think. Recreational properties are the first to experience price drops, correct? That’s all we have here as far as I know. It seems the majority of new developments are adjacent to a golf course, on the lake, etc. I don’t have any stats but I doubt we have much immigration here for the above reasons and local incomes sure as hell don’t support the prices - so who’s buying these places? My bet is people who want a second home in lake country, and speculators.
July 2nd, 2008 at 12:40 pm
“When charted out, these data suggest Canada is tracking the U.S. housing market fairly closely, at a two-year lag, said Douglas Porter, deputy chief economist at BMO Nesbitt Burns Inc.
“It’s a bit unnerving to see how Canadian performance is beginning to look like that of the U.S. two years down the line,” Mr. Porter said.
”
July 2nd, 2008 at 12:41 pm
He’s looking to save the hassle of selling by selling to you. Renters better get used to it. Just tell him thanks for the wonderful offer but it’s not the best time for you to be owning.
July 2nd, 2008 at 1:51 pm
July 1st, 2008 at 4:32 pm
None of this matters. Bulls know that increased supply and decreasing demand does not lead to price declines. This is because no one will sell a house if they are getting lower price. Past prices declines in Vancouver and the rest of the world only happened because in the past people had to sell. Today, no one has to sell. Therefore nothing will make prices go down.
This is probably one of the stupidest bullish statement. The nation is spending money at an alarming rate, More than we make. This contrary to what you say is going to be the catalyst of this market. Sometimes sellers have to sell it is Buyers who don’t have to buy… Moron
July 2nd, 2008 at 1:53 pm
http://www.greaterfool.ca/
July 2nd, 2008 at 2:02 pm
July 2nd, 2008 at 2:30 pm
I just did this with my landlord, who happily obliged to extend our generous 2% cap rate.
July 2nd, 2008 at 2:38 pm
“This is probably one of the stupidest bullish statement. The nation is spending money at an alarming rate, More than we make. This contrary to what you say is going to be the catalyst of this market. Sometimes sellers have to sell it is Buyers who don’t have to buy… Moron”
Ahem, I am a bear. Read my past posts. This is the rediculous bull argument that was made repeatedly on Friday. Just restating it for sarcastic posterity. I’m glad you see the idiocy in it.
July 2nd, 2008 at 2:52 pm
July 2nd, 2008 at 3:14 pm
July 2nd, 2008 at 3:20 pm
By the way, Victoria is a cold, rainy dump. Anyone would choose tropical florida. Hundreds of thousands of Canadian snow birds are a testament to that fact. No one has coined a term for “everyone” that wants to move to Victoria because not many people do. Florida is where everyone buys and it is still tanking.
July 2nd, 2008 at 3:23 pm
I know you’re just being ironic. It’s especially funny because the real deal Hawaii is starting to tank. Sales are the lowest they’ve been in 10 years.
July 2nd, 2008 at 3:26 pm
- ABC news
How does that ring, “Officially… a bear market.”
How long before they say that about Vancouver Real Estate? A year? Two?
July 2nd, 2008 at 3:55 pm