House prices drop below 2007 levels

exx just posted this link, looks like its worth its own post.  The Vancouver sun is reporting that the house price drop in September was big enough to bring us below 2007 levels in most markets across the Lower Mainland.  Prices in Greater Vancouver have dropped 5.8% since May and are now 1.6% lower than September 2007.

The year-over-year price changes vary by market from up 3.6 per cent in Richmond where the benchmark was $$754,481 to down 20.4 per cent in Port Moody where the benchmark was $619,891 in September.

Total sales of all property types recorded through the Multiple Listing Service were 1,585 across the REBGV area in September, down 43 per cent from September a year ago.

REBGV September new listings, meanwhile, were up 29 per cent to 6,142 from the same month a year ago.

“After five years of unprecedented increases, housing prices are beginning to realign,” Dave Watt, REBGV president, said in a news release.

Any thoughts or comments on this news?

55 Comments
newest
oldest most voted
Inline Feedbacks
View all comments
day
day
11 years ago

never mind 2010.Lower mainland house prises are going to drop by 50% in 2009.We will be in 1995 level again.

day
day
11 years ago

house prises in lower mainland will fall about 190000.00 to 200000.00,below the city assessement 2008.Becouse city don't buy houses,and buyer's already lost money in stocks.Rent dont carry mortguage anymore,foreclousers are up,we are in RESSASION,we are loosing jobs everyday.Everything have to come down and economy have to restart again from the bottom.

Anonymous
Anonymous
11 years ago

Dosh Says:
October 2nd, 2008 at 4:53 pm
Deja, your a clown. whats your point? that some of my predictions were off? so what? Real estate is a long term investment. Your probably one of those idiots who predicted a 50% drop and prices are down less than two percent from last year. Anyone who bought in 2006 or before still has lots of equity built up.

cashking
cashking
11 years ago

The irony of this for non-owners may be that when prices are finally low enough to buy in again (2010 perhaps), low interest rates will probably be no longer available. For those renting and gloating, I think you'd better get used to renting for some time to come as owning will be out of reach. Oh well, at least you can enjoy your investment returns in the meantime (not). As a home owner that has made 80% on my RE investment over the last 5 years, I can't complain about losing perhaps 20-30% on a house in kits. My wife and I are still considering selling and renting at this point (slightly over the peak), but we enjoy our home too much. We've lucked out. Look, I think we're all in for some tough times, at least those with a… Read more »

Nutty Professor
Nutty Professor
11 years ago

Wait a minute…

"Gone Are

blah, blah

-0% down"

Then:

"-5% cashback without 5% down coming from client"

Isn't that 0% down?

markx
markx
11 years ago

OK, I mean rent equivalent based on CURRENT market rent, that is rental places that don't take a month of full time searching to find at today's vacancy rates. Even after adjusting for inflation, rent has risen since 2001, and faster than income, due to increasing labour participation rate. That's why I say rent equivalent by 2009, which would put us at 2005 prices.(I'm giving myself a bit of a margin here. Don't want to say when in 2005.) After 2010, there's really no bottom to prices, as there won't be much of a bottom for rent.

patriotz
patriotz
11 years ago

We weren't talking about fundamental value, which is based on estimates of future rents, expenses, and interest rates, but about rent equivalence at time of purchase, which is a fact (you either have it or you don't).

Fundamental value of course depends on interest rates over the long run, as that is what is used to discount future earnings. If you were able to borrow money in perpetuity the discount rate would be known, but it must be estimated.

Drachen
Drachen
11 years ago

Patriotz

Oh right, I don't believe interest rates really affect fundamental value significantly though…

I understand why you do, I just disagree.

patriotz
patriotz
11 years ago

1987! (that’s around when we last saw rent equivalence Patriotz)

I don't think so, some properties – condos in particular – were rent equivalent in 2001-2002 and I have seen postings from buyers to that effect.

Remember interest rates were a lot lower in 2001 than in 1987.

bcubbins
bcubbins
11 years ago

“After five years of unprecedented increases, housing prices are beginning to realign,” Dave Watt, REBGV president, said in a news release.

Hey, even Dave Watt acknowledges that this is just the beginning……

Drachen
Drachen
11 years ago

Betamax

"How long before we’re comparing to 2004, 2003, 2002, 2001?"

1987! (that's around when we last saw rent equivalence Patriotz)

No downturn in decad
No downturn in decad
11 years ago

Thums up2Thu, Oct 2, 08 at 10:47 PM

NO DOWN TURN IN DECADES TO COME

Because of some new sfh in port moddy price acceleration was extreme last year as there is no new project that same acceleration is coming down at huge amount 18 percent in september and huge amount again in october. As far as rebgv concern they have no math to disclude or include acceleration that does not make sense but in reality there is no one paying extra and no one is paying less.

Conclusion:In reality prices are not falling specially in Vancouver.and the link is below……. http://www.canada.com/vancouversun/news/story.htm

betamax
betamax
11 years ago

Dosh: Anyone who bought in 2006 or before still has lots of equity built up.

bwahahahaha! Gotta go back two years already, and this thing's just begun to tank. How long before we're comparing to 2004, 2003, 2002, 2001?

Reknab
Reknab
11 years ago

"@Reknab: So you work for a big bank and you’re just now stopping those lending practices?"

Yes, and we have been offering these for years! I have shaken my head in disbelief many times over the years over the things we have approbed, unbelievable. Not that I condone it, it was out of my control.

Also for "self employed" people, or anyone who said they were, we would pretty much give them anything at 65% LTV.

MickeyFinn
MickeyFinn
11 years ago

Patriotz said, "If this bust moves at the speed of 81-83, and it looks like that may happen, we will see rent equivalence and a probable nominal bottom around this time in 2010."

I did a little armchair technical analysis of the average price graph of real estate prices for the REBGV (y'know, the one that goes back to 1977) and I came to the exact same conclusion… namely, that we are not likely to see the bottom until well into 2010. Don't get me wrong, I'm as impatient as the next bear and I'd like to think it would happen faster.

My guess is that we will see prices retract about 50% from the high that was reached in February 2008 but that it will take close to 30 months from February to reach that low.

browntown
browntown
11 years ago

hey nutbags! hey Dan, yeah i believe you'r in calgary. yup believe it.. only 200 day until stampede! i like pancake! ha ha reverse land making machine busy in tar sands! ha ha

Dan in Calgary
Dan in Calgary
11 years ago

Chugga-chugga woo woo!

Shouldn't this be "Boom chugga-chugga, boom chugga-chugga, boom chugga-chugga woo woo!"? It's been a long time since I watched Barney and friends.

Dan in Calgary
Dan in Calgary
11 years ago

Deja, your a clown. whats your point? that some of my predictions were off? so what? Real estate is a long term investment.

Oh, no, he's brought up the "Real estate is a long term investment" argument. Oh dear, we have not yet been immunized to his bullet-proof reasoning. What do we do now? Panic, panic! Panic!! WIDWIDRICSAS! ("When in danger, when in doubt, run in circles, scream and shout").

rent king
rent king
11 years ago

no way, real estate is cheap now. Look in the newspaper, tons of deals. The market goes up starting next spring.

patriotz
patriotz
11 years ago

I can see two waves of crashing. We’ll see prices back to levels that support current rent level by next year this time, and back to where it started after Olympics

That doesn't make sense, we haven't seen rent equivalence since the beginning of the bubble in 2001.

If this bust moves at the speed of 81-83, and it looks like that may happen, we will see rent equivalence and a probable nominal bottom around this time in 2010.

Deja "I didn&#0
Deja "I didn&#0
11 years ago

dosh Says:

December 30th, 2007 at 4:18 pm

So you don’t know when is a good time , but you do know now is not a good time? Where does your knowledge end?

And as far as affordability goes thats an individual thing. How do you know that there aren’t millions of people earning over $100k per year here? The more you have on hand the less of a big deal ‘affordability’ becomes.

Anonymous
Anonymous
11 years ago

Dosh Says:

October 2nd, 2008 at 4:53 pm

Deja, your a clown. whats your point? that some of my predictions were off? so what? Real estate is a long term investment. Your probably one of those idiots who predicted a 50% drop and prices are down less than two percent from last year. Anyone who bought in 2006 or before still has lots of equity built up.

markx
markx
11 years ago

If this YOY benchmark price drop doesn't get revised up, September 2008 will mark the "point of no return" in this historical RE bubble of BC. Now it's a matter how WHEN it will crash back to where it started, and whether it will overshoot by any large margin. I can see two waves of crashing. We'll see prices back to levels that support current rent level by next year this time, and back to where it started after Olympics, which is when manual labor wage and rent will start cracking. Oh, all the condo completions will really push the rent down.

By the way, if NDP wins the provincial election next May, we'll be back to pre-bubble levels before Olympics. Not saying NDP is bad, it's just the market psychology.

MickeyFinn
MickeyFinn
11 years ago

I love it!

I've got myself a comfortable chair and I've made some popcorn now I'm just going to take a seat by the side of the tracks where I will enjoy a great view of the train wreck that will soon be the Vancouver real estate market.

It's already out-of-control and barreling towards the station… oh yeah and the massive number of completions projected for the next eighteen months is going to add so many more cars to the train.

Chugga-chugga woo woo!

BDK
BDK
11 years ago

I know it's mean to laugh at retards but I am enjoying having a laugh at dosh the douche's expense.

Whatever dosh says do the opposite because he's wrong 100% of the time.