CMHC: decline for starts and prices
The Canadian Mortgage and Housing Corporation has lowered it’s forecast for housing starts and prices in BC due to the weak economy. They are predicting a 43% decline in housing starts this year, and more than 15% decline in house prices over the next two years.
Canada Mortgage and Housing is forecasting the average Metro Vancouver home price to decline 13 per cent in 2009, and a further 2.3 per cent in 2010.
“Buyers’ market conditions that began in mid 2008 will persist through this year before supply and demand conditions become more balanced in 2010,” Canada Mortgage and Housing said in its forecast.
The housing agency expects the decline in sales will flatten out later in 2009 as first-time-buyers are lured back into the market by lower prices, but “[s]lower economic growth will keep demand for home ownership sluggish through early next year.”
In another report, the research firm Landcor Data Corp. noted that real estate sales recorded through the B.C. Land Title Office dropped to their lowest level since 1985 in the first quarter of 2009.
However, Landcor president Rudy Nielsen said the recent trend of rising sales over the past few months could be signaling that the downturn is near its bottom and represent “a light at the end of the tunnel.”
Or, the blip in sales “could be a grizzly bear with a flashlight. It’s tough to guess right now where the hell we’re heading,” Nielsen said in an interview.
If you’re counting on lower house prices to make Vancouver more affordable does the recent blip in sales have you concerned? Is this a market recovery, a spring bounce or a grizzly bear with a flashlight?
May 21st, 2009 at 8:36 pm
Record unemployment hits US for the umpteenth month in a row.
http://www.bloomberg.com/apps/news?pid=20601087&a…
Canada mum on information. BC is in information lockdown. Anecdotal information is that jobs are pissing out into the streets. EI clerks have been ordered not to answer their phones. The coffee shops in Kits and Downturn are filled to the rafters with suddenly self employed entrepeneurs trying to sell their services to one another.
COV announces quietly this week that it will cover older buildings along city streets downtown with "Wraps" like they did in Beijing to disguise the SRO's, and boarded up and vacant/abandoned shop fronts along Hastings. I can't imagine what they're going to do with the street people but in China all those undesirables were given the bums rush, will that happen in Vancouver? Personally I think a lot of homeless will be incacerated, but that doesn't seem to upset too many people, strange.
The Marijuana Party headquarters on hastings is under attack by the COV. Gee, is it suddenly incorrect in Vancouver to have an embarrassing display of Canadians differant views on marijuana in the face of the visiting American media. Show of hands, how many think the bums and the dopers are one of the top stories the US press junkies WANT TO COVER? Is Marc Emery going to be extradited and turned over to the US by Little Greggy Robertson to suck up to the IOC. BIG CLUE GReggy, you're a freaking retard if you think that the world doesn't already know about the DTES and The BC Marijuana culture.
May 21st, 2009 at 7:38 pm
This is the kind of stat that makes me feel that the US market could just keep on falling.
1 in 4 US homeowners doesn't have a nickel saved. Nada! Rien! Niente! Nicht! Nashi!
http://tinyurl.com/p6pzvv
May 21st, 2009 at 6:39 pm
Anonymous:
its basic economics. lower prices equals higher volumes.
That's for consumption. If gas is cheaper people use more gas, if beer is cheaper people drink more beer, etc. And if rents are lower people use more living space, if flights are cheaper people fly more, etc.
But the sale of RE is not consumption. It is not the use of anything. It's the change in ownership of a capital asset. It is driven by expectation of price changes as well as demand for use, and the end user is not necessarily the same person as the buyer (i.e the buyer may be a landlord).
This is true for all capital markets. Look at the stock market. Are stock sales higher the lower the price gets? No. That's because the stocks are not being "used" or "consumed". A stock is a claim on the future earnings of a corporation and, a stock sale is a change in ownership of that claim. Likewise a house sale is not use of accommodation, but a change in ownership of a claim to future accommodation.
In fact the general correlation in RE markets is that the lower the prices the lower the sales volume.
it is easier to trade up after a huge price drop.
Not when you have negative equity it isn't. Also, even those who do have equity are reluctant to trade up when prices are falling, for fear of further losses.