The incredible shrinking FTB

Don sent in a link to this article over at Business in Vancouver.  According to an Ipsos-Reid study first time buyers are a dwindling factor in the BC real estate market, falling from about 38% last year to about 29% of current buyers.

Rapid recovery of housing prices, particularly in Metro Vancouver, is again pushing first-time buyers out of the market, rather than any decline in interest.

The study suggested people believe the province is slowly turning into a seller’s market with 53% of B.C. residents saying now is a good time to sell a home, up from 14% in the same period a year ago.

On average, British Columbians are estimating housing prices will rise 4.6% in the coming year with 57% predicting prices will rises compared with only 12% who believe prices will fall.

So if you think BC house prices will fall in 2010, you’re definitely in the minority.  But what does a decline in the number of first time buyers mean?  Will this have an impact on the move-up market?  Of course 29% isn’t that low – in California only 26% of market was composed of first-time buyers in 2005.  They also had a difficult time in Phoenix. Here’s an article from 2005 with some tips on how to cope as a first time buyer.

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Anonymous

Don't worry Chinese elites mainly composed of party members,and their offspring will swamp this city and swallow whatever Real estates worth at least 1 million in value.Chinese power is too strong to resist.Van RE will proper for at least 100 yrs. Losers like you should move out and let those winners come.I welcome those Wealthy Chinese to enrich Van RE value.

Rocker Guy

@rubberduckie: LoL Last Time Buyers.

Anon

VHB,
Why does your profile link to this site ?http://www.maverickmoneymakers.com/?hop=brentnunez#ic

Best place on meth

@Boombust:

He's ESL.

And stoopid.

Boombust

"Van R.E. which is already advance through the fragile condition will countinue to lead the economy."

Are you a Troll or just really stoopid?

vreaa

@Betamax: ARe you referring to buying here or in China?

Best place on meth

@Anonymous: #95

Sorry amigo, no mucho bullish today – or any other day for that matter.

EXTREMELY bearish again.

Vancouver East & West*

New Listings – 112

Back On Market Listings – 0

Price Changes – 32

Sold Listings – 20

Vancouver All Areas*

New Listings – 288

Back On Market Listings – 5

Price Changes – 95

Sold Listings – 81

Best place on meth

Look at those wealthy Asians today snapping up red mittens as if they were condo presales.

http://www.youtube.com/watch?v=EMYtGitOfR8

I wonder if they think red mittens always go up.

"I buy 3, my husband buy 3".

VHB

Let's party like it's 2008! You're all invited to a 14K party. Over here!

Anonymous

Broke the 14000 listing today!

R E B G V Inventory listings

Mar 1, 2010 = 12255

Mar 2, 2010 = 12324

Mar 3, 2010 = 12459

Mar 4, 2010 = 12670

Mar 5, 2010 = 12775

Mar 8, 2010 = 13019

Mar 9, 2010 = 13244

Mar 10, 2010 = 13439

Mar 11, 2010 = 13551

Mar 12, 2010 = 13609

Mar 15, 2010 = 13755

Mar 16, 2010 = 13779

Mar 17, 2010 = 13870

Mar 18, 2010 = 14027

Anonymous

watch Larry's numbers – going to be mucho bullish tonight!

Kite towards moon

@Rhino:Government is tracking lots of weakness of global economy and domestic economy as well.So they are keeping interest rates as low as they can On otherhand Vancouver R.E. has advanced through the fragile economy conditions.Usa economy is following global economy leaders like China and india,Australia and Newzealand are already advanced. it is just American real estate that did not bounce back on right time otherwise interest rates should have incresed by .50%-.100% so far.You can see Air Canada,Fannie mae, and Citi has start showing some solid footing.Van R.E. which is already advance through the fragile condition will countinue to lead the economy.Strength in Global economy and domestic economy countinue to support Vancouver real estate.Higher interest rates,Higher inflation rates are hard to achieve without solid economy and solid jobs prospectus that will again support Vancouver real estate to keep booming as… Read more »

patriotz

@scullboy: my guess would be suddenly a *LOT* of SFH in Van would come up for sale as the suites no longer command $xxxx. Maybe that mean some condo landlord types are able to hold onto their units longer. I think that's backward. The owner-occupiers will try to hold on to their houses to the bitter end. They will get people into those basement suites because they have to, even if that means dropping rents. It's the condo landlords who are going to head for the exits first because for them it's only about the money. They have no emotional attachment and will get out once they don't see further gains ahead. Also you are making the faulty assumption that homeowners selling would somehow makes things better for the condo landlords. If anything it would increase the glut in the… Read more »

scullboy

I think one way Vancouver will be unique is in how the added supply plays into pricing trends as a whole. I never saw a city with so many crappy basement basement suites. With the massive amounts of construction recently and the Olympics done with, renters are going to look for more value for the money, which might mean a good sized migration from basement suite to condo. How that would play out in price fluctuations is anyone's guess really, but my guess would be suddenly a *LOT* of SFH in Van would come up for sale as the suites no longer command $xxxx. Maybe that mean some condo landlord types are able to hold onto their units longer. I don't think there's a city in Canada with as many amateur landlords, so national policies affecting that group might have… Read more »

patriotz

@Best place on meth:

Well, not all landlords. The ones who paid sane prices years ago are doing fine with cash flow.

But they're getting a dismal yield on an opportunity cost basis. What keeps them from selling is the expectation of further price increases. When prices start falling, expect a lot of them to head to the exits too.

Aleks

"These are cultures where wealth and business acumen is highly valued above almost anything – there is huge pressure on the 1st gen kids to be “successful” and I think in many cases that means loading up on debt so you can pretend to be a player by having the material trappings of success"

That sounds more like regular Canadians than immigrants. In my experience, immigrants are focused on the reality of success, not the trappings, which is why you have multi-generational families living together and sharing expenses, kids working in the family store and people working multiple jobs. The second and third generation may take on debt to try to get the trappings of success without doing the work, but not the first generation.

Best place on meth

@patriotz:

>>>The real issue is that landlords cannot come even close to covering their expenses from the market rent, and that means that landlords must eventually sell.<<<

Well, not all landlords. The ones who paid sane prices years ago are doing fine with cash flow.

The newer landlords are screwed. I see idiots a plenty trying to keep up with their massive mortgages asking $1300-1400 for east side basement suites and there sure are a lot of basement suites sitting empty these days.

Because honestly, they're dark shitty basement suites.

No Longer Looking

"landlords must eventually sell"

I guess, at least for those who aren't balanced out by properties bought at better times. What they'll sell when they're done with the properties is a depressing thought. Years and years of neglected maintenance, in many cases. This is why I may not even buy when the market craters. I'm just not handy enough, and rebuilding is expensive.

patriotz

@No Longer Looking:

People in this provincial are insane if they use grow-ops to pay their mortgage. Still I figure this is a minor factor in our housing bubble

How owner-occupiers are paying their mortgages really isn't the issue.

The real issue is that landlords cannot come even close to covering their expenses from the market rent, and that means that landlords must eventually sell. And that's all it takes to crater the market.

No Longer Looking

@Starving Artist: "When the correction comes you’re going to see a lot of Benzies on craigslist, real fast."

More likely abandoned at the airport.

patriotz

Former Bank of Canada boss urges focus on personal savings for retirement Stop buying those lattes or splurging on spring break vacations. David Dodge, former governor of the Bank of Canada, says Canadians need to save far more if they want to retire comfortably – even those Canadians who think they have great company pension plans and solid RRSPs. No surprise to anyone here. But other research suggests that Canadian savings may not be as paltry as some policy makers and analysts fear. Once assets such as housing are taken into account, the net worth of the majority of Canadians is substantial enough to allow for a decent retirement, according to work led by University of Calgary economist Jack Mintz. This clown calls himself an "economist"? Just who is going to buy all those houses at today's prices? The current… Read more »

Starving Artist

Great series on the potential Chinese economic bubble over on The Daily Capitalist btw

http://dailycapitalist.com/2010/03/16/chinas-frag

Starving Artist

Those trolls are just too funny to be believed. Anyway…. yes I think the large immigrant population in Vancouver is a huge factor, but not for the usual reason (not because they are rich). These are cultures where wealth and business acumen is highly valued above almost anything – there is huge pressure on the 1st gen kids to be "successful" and I think in many cases that means loading up on debt so you can pretend to be a player by having the material trappings of success: properties & cars, mostly. Risk is the name of the game. What is happening back in China has very little bearing. When the correction comes you're going to see a lot of Benzies on craigslist, real fast. The Yaletown crackers are just as crazy, but maybe not leveraged as much. But another… Read more »

Starving Artist

HAHAHAH stop you're killing me you guys can't really be for real can you?????

averagejoe

@Betamax: That is exactly whats happening except the Asian city is not Shanghai, it is Vancouver