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May 2009: prices up and down

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The Vancouver Sun is reporting that the housing market in the lower mainland has struck a balance point, with sales and price rebounding from their winter lows.

The decline of Lower Mainland real estate markets, which started with falling sales more than a year and saw prices drop as the global recession developed, levelled out in May.

Metro Vancouver recorded its best year-over-year sales increase in May since February 2008 with 3,524 sales reported through the Multiple Listing Service, 17 per cent higher than the 3,002 sales recorded in the same month a year ago.

The so-called benchmark price in Metro Vancouver, averaged across property types, hit $506,201 in May, which is still 11 per cent below the same month in 2008, but higher than the $484,211 recorded in January.

Metro Vancouver’s inventory of unsold homes in May stood at 13,641, a 16-per-cent decrease from a year ago.

At the risk of repetition, I’m just going to post one of our favorite charts from Sacramento Land(ing) showing their market going through the seasons over the last three years:

And here’s the up to date version they just posted:

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Supraboy

Commodity prices are rising, Goldman Sachs predicting $85/barrel oil in 2 months, stock markets continue to climb, inflation ready to set in, get real, middle class workers will never get a sniff of properties in Vancouver West. I rather keep them away from the West side since the middle class in Vancouver are narrow-minded. Best they can do is live in burnaby. Burnaby is a dump.

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Supraboy

The people on this site are getting more and more desperate in hoping for a market meltdown in real estate. If it hasn't fallen, it ain't going to fall boys and girls. Keep on hoping to get your hands on a cheap piece of land. I can bet anyone that by this time next year, you'll see housing prices higher by at least 10%.

I'm about to put an offer on a 1.475 million dollar home near kerrisdale. I'll rent it out for the remainder of the year and take it down next year. I think I should be able to list a new home on that land for at least 3.25million to start.

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Anonymous

gvrdpropertyowner: "Nevertheless, the inference was (correct me if I am wrong) that if one knows the base population, one can then reliably, and accurately, predict the level of new construction which is required to house that population."

No he is inferring that population growth is reasonably consistent so there should be a relationship between base population and housing starts.

Whatever, though. As mentioned, dwelling growth should be around 10,000 to absorb in-migration. Most demos that destroy existing stock make way for higher density properties so likely no help there.

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Deliverator

Sorry this might be off topic. But could this be the cause of 2nd wave of the global economic crisis?

<a href="http://www.telegraph.co.uk/fin…..weden.html” target=”_blank”>http://www.telegraph.co.uk/fin…..weden.html

Yes. That and potential failed UK and US bond auctions.

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patriotz

realpaul:

The government is setting up these ideas so that they can move legislation and zoning wish lists submitted by the development community for the benefit of the politicians and development community.

The more excess supply that is built, the better it is for the buyers and the worse it is for the sellers.

Build baby build.

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Bdk and Sofia

V:VB2,It is written. Hey Vancouverrrrrrrr-Jai Ho! baila! baila (Dance!Dance!) Come on,Come on my life Under the canopy Come on,come on under the blue brocade sky!-Jai Ho! vancouverboom2 success runing like a fire every buyers/sellers entering,ticking the prices higher-Jai Ho! come on bears stop coming in my way Longer you'll wait larger you need to pay-Jai Ho ! "*TriumphHhhhhhh -Vancouverboom2-Jai Ho!*".- It's getting hot and hot in here in Vancouver where all buyers include first time,second time buyers along with buyers from usa,uk,europe,and overseas have been buying and cheering on the crash of fear that proved to be dumb theory when it comes to apply on Vancouver,Different planet!.No more down turn in decades to come in the "best place on earth".Everyone wants to live in Vancouver to develop themself in most decent multicultural society of this world,Who says you can't ?… Read more »

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realpaul

An idea some may want to consider regarding the projected pop growth. The vast majority of new immigrants are poor and have a social and cultural propensity to live together as very large extended families in a SINGLE unit. This would indicate that condo's will not be of intrest to the majority of new purchasers. I know families who convert thier garages and concrete over the lawn as opposed to all moving out on thier own. Based on what I see, you can cut the number of projected units needed by pop growth by a factor of ten at least. as always the city planners have thier head up thier asses. The government is setting up these ideas so that they can move legislation and zoning wish lists submitted by the development community for the benefit of the politicians and… Read more »

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gvrdpropertyowner

Anon "I think that’s exactly what he’s stating. Do you see a flaw with this methodology?" "seems straight-up on first glance and starts would tend underestimate dwelling growth due to demolitions. Population growth is x, r people per dwelling, so dwelling growth needs to be x/r." Ignoring the effect that changes in the total population have on housing requirements. Certainly, X people would require Y housing. However, I believe that the required replacement- of said housing- would be a function of the age and condition of the housing; and, in turn, how it relates to the current and future needs of the population. Does the gentrification of B.C.'s population have an effect on housing? As such, knowledge of the total population is only useful if it can be used to prorate the results from other know populations- if they are… Read more »

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Rick

Sorry this might be off topic. But could this be the cause of 2nd wave of the global economic crisis?

http://www.telegraph.co.uk/finance/financetopics/…

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dingus

"methinks Dave is a glutton for punishment."

methinks an echo chamber is boring (how many ways can you say "look out below"?), so props to Dave for making people justify their positions and at least keeping some sort of dialogue going.

Disagreeing with the consensus isn't being a troll.

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ella

oneangryslav,

Unfortunately, Octo-mom and Brangelina earn more advertising revenue than good, in-depth, critical financial reporting. Developers and realtors have money to spend on advertising. There's not much incentive to be a great reporter anymore, which is too bad.

Blogs are great, but we need some trustworthy larger organizations who have the resources to track complex difficult stories and put a national spotlight on them. All these bailouts, development deals and corrupt CEOs should be hammered by the press, and it's not happening…just a lot of soundbytes at the moment.

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ella

Pope, please can you delete Franco's post? It's inappropriate and racist. Thank-you.

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Vansanity

Franco:

Wow. I'm convinced. I'm going to spend the hundreds of thousands in my savings on condos now. You're logic was ironclad.

Fail.

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VanBanker

On another note, the rental market is seeing tons of new listings these days, I was surpised by how many. I haven't looked in a few months, and was shocked last night to see how many great buildings have shown a significant increase in listings. I'm looking at one and two-bedrooms in Coal Harbour and Marinaside and saw several of my target buildings going from 1-2 units available a few months ago to 10-14 units listed now; as well, several are offering nice incentives. This is all the more surprising b/c summer is usually the tightest time of year.

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oneangryslav

ella: You're right about the writing; the reporter doesn't have a clue as this means nothing for those who can't complete because the market value of their pre-purchase has dropped.

You know, one would think that those writing about such issues in a prominent mainstream media outlet would actually have some idea about the subject matter. But I guess that's too much to ask as they didn't go to school to become experts on a particular topic, but to become "reporters." I wish that journalists would trademark "Reporter" the way that realtards have trademarked Realtor. Then we could pre-emptively dismiss what they write.

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VanBanker

Ted Says:

June 4th, 2009 at 11:29 am

"Sounds like MAC dropped the ball on this one and it sounds like an isolated incident"

I can tell you similar situations have come up in several projects in Greater Vancouver already, so it's not an isolated incident. But also, it's not like I expect an avalanche of these either.

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Franco

Dave is right and have courage to confront those silly and ignorant bears who missed the boat yrs ago.

They shameless, divert their frustration and anger toward anyone who has contrary option.

As I always say, Van is a unique city and its Chink population is the main pillar of Van RE.

Chinks will sustain Van RE alone for the yrs to come in next century though there are always hiccups during the run to the heavenly peak in which house owners are secured for abundant retirement while those bear will certainly live in poverty, regret, agony,repentance and of course, anger.

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Ted

Sounds like MAC dropped the ball on this one and it sounds like an isolated incident

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ella

"The decision could have implications for hundreds of buyers who purchased condos, only to find their value had fallen in the current real estate market, so they failed to complete their purchase and now are being sued by developers."

—Vancouver Sun

Interesting. Terrible writing, though.

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VanBanker

B.C. court rules pre-sale condo contract invalid

http://www.cbc.ca/canada/british-columbia/story/2…

I can tell you everyone in my office, and other banks in the city, are worried about this type of thing, we have seen alot of sloppy papering.

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Vansanity

Non-residential sector has been touted by the construction industry as being the next boom in BC. The next wave of construction to keep them all busy and profitable along with infrastructure.

Well, non-residential building permits drop 36.5% in value in BC for April.

What will they think of next?

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crabman

Dave: The point is that the current volume of real estate under construction doesn’t appear to be very alarming when one considers historic construction rates (per pop.) and population growth.

Over the last 5 years in greater Vancouver, housing starts have been running 18-21k/year, while population growth has been about 26k/year. The average number of residents per dwelling is 2.43. The number of new dwelling needed per year for this population growth would be: 26k/2.43 = 10,700. Even if you assume fewer residents in condos than SFHs, it still appears there has been significant overbuilding the last 5 years.

Sources: (you should try them sometime Dave) ;^)

Source 1

Source 2

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Anonymous

Dave: "That’s population growth for BC but most of it ends up in the Lower Mainland."

Do you have data to back that up? Check out the BC Stats population estimates (PDF). Combining Greater Vancouver and Fraser Valley and I only get between 30K and 38K annual population growth since 2000.

So much for most of the population growth being in the Lower Mainland.

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Dave

gvrdpropertyowner:

That's population growth for BC but most of it ends up in the Lower Mainland. The point is that the current volume of real estate under construction doesn't appear to be very alarming when one considers historic construction rates (per pop.) and population growth.

This is what 60,000 people looks like:

http://tinyurl.com/o3lctj

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