‘Value’ is forever.
There are two ways to think about a purchase – you can focus on the price, or you can focus on the ‘value’. Local developer James Shouw points out that you shouldn’t really worry about all the numbers and stats because ‘Value’ is forever.
For example, in April, 2009, the number of real estate transactions both declined and increased locally.
The headlines focused on a year-over-year decline, news that would have certainly concerned real estate agents, but that should not have concerned real estate owners: whatever took place in April 2009 was not a reflection of value. In fact, in that month, the number of transactions increased more than 30 per cent from the previous month and the value of the average transaction increased three per cent.
Those numbers offer important lessons. As a developer, I’m primarily concerned about value. As a real estate broker, I’d likely be more concerned with volume. Value and volume can fluctuate in parallel, or in opposition, depending on underlying market dynamics.
There’s more. You can read the whole thing over at the Vancouver Sun. See if you can find some value in it.
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July 6th, 2010 at 6:48 pm
No need to tell those foolish Van bears that a house in this heavenly city is the solid investment for retirement;if they had doubt about Van RE value,let them rot to the bone and be priced out of this city forever;however,don’t forget to pay your rent on time each.whining and loud mouth won’t be the excuses for rent deferral.Our Chinese friends are much smarter than those retarded bears who have been pounding the Armageddon drum for at least 10 yrs but each time the reality slap their balls hard-Ouch…………
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July 6th, 2010 at 10:50 am
[...] 'Value' is forever. | Vancouver Condo Info [...]
July 6th, 2010 at 2:35 am
@rp1:
Hyperinflation is in no way comparable to a housing bubble. Most Western countries have seen regional and in some cases national housing bubbles come and go for over a century.
I really think you should talk to someone from the former Soviet Union or Yugoslavia. Or someone from post-WWII China. Or read up on 1920’s Germany. That kind of thing is worlds away from what the US, Ireland, etc. are experiencing today.
Canada has not seen any major economic privations since the 1930’s/WWII, and IMHO we’ve lost perspective on what real hard times are like. Things aren’t even as bad today in many respects as they were in the 70’s and 80’s.
July 6th, 2010 at 2:24 am
@Devore:
The city borrows money for capital projects. The ones that everyone gets to vote on at municipal election time. That’s what all those bonds are sold for. It also might have use a line of credit for day to day cash flow deficiencies but that is made up from revenues.
You don’t know jack about finance in general and municipal finance in particular. Sorry if that sounds impolite but the facts on this issue are easily referenced.
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July 6th, 2010 at 1:02 am
[...] even more drama in the West Van Apartment benchmark if you go back another month to the April Peak. RSS 2.0 comments feed. You can skip to the end and leave a response. Pinging is currently not [...]
July 5th, 2010 at 11:46 pm
@Beatbox: Actually an interesting article. Underutilized housing is a huge problem in North Vancouver. I think, given low savings rates, that will start to change in the next 10 years, but owners won’t like what that will mean for prices.
July 5th, 2010 at 11:03 pm
@Teddy Bear: The City’s previously announced that they’re getting rid of all the free parking downtown. Supposedly it’s to encourage other methods of transport– buses, walking, biking.
…And the funny thing about development regulations is that they can be bent by any company with enough financial/political clout, or by any small developer who can convince the city that it’s a good idea for them to exceed the regs…
July 5th, 2010 at 11:02 pm
#82 @patriotz: “Maybe because it would destroy the social and economic fabric of the country?”
A housing bubble destroys the social and economic fabric of a country and we went full speed ahead on that one.
July 5th, 2010 at 11:02 pm
How would the “value is forever” work when the mayor of North Van couldn’t afford a house… “only an apartment with a very large mortgage” (if his parents hadn’t helped him out years ago). North Van Mayor laments state of housing and affordability on the North Shore:
http://www.bclocalnews.com/community/97491409.html
July 5th, 2010 at 10:21 pm
The Seawall repairs in the middle of summer!
Anybody noticed how our City crooks and bandits are preparing to put marking meters instead of 2hr parking on Davie St., west of Jervis St.? They will take away from us everything they can in order to support their spending habits.
Millenium owes the city some 900 million dollars for OV fiasco, yet the crooks let them build a monster highrise on Bidwell and Davie, contrary to current regulations.
Yes, we are feeding and fattening up whole bunch of incompetent morons and common thieves, and what does that say about us, I wonder…
July 5th, 2010 at 10:20 pm
@crabman: Not sure whats with all the spam. It seems to be all trackback spam, so pings and trackbacks are now disabled, hopefully that will help.
Thanks to everyone who pointed out the drama in the latest benchmark stats – tomorrows post should be fun!
July 5th, 2010 at 9:54 pm
John Hussman gave his US recession warning last week (his previous warnings being in Oct 2000 and Nov 2007) and continues writing today…
“From a Bayesian standpoint, if you always observe a certain combination of information when X occurs, and never observe that same data when X is not present, then even if X is hidden under a hat, you would conclude that X is most likely there. If I see clowns walking around the grocery store buying peanuts, and there’s a big top tent with two unicycles in front of it in the middle of what is usually an open field, I’m sorry, I’m going to conclude that the circus is in town.”
These clowns are going to pounce on Vancouver real estate hard.
http://www.hussmanfunds.com/wmc/wmc100706.htm
July 5th, 2010 at 9:47 pm
I was throwing out my junk mail this evening when I came across some add mail from a local realtor. According to the add mail houses above 600K in Nanaimo number 124 active listings and where selling at a pace of 2 per month. For 62 months of inventory as of the end of May. I called a realtor I know and he advises me there where no sales in this price range for the entire district of Nanaimo between 1 May and 30 June. I would expect Nanaimo to have reduced real estate activity when compared to Vancouver as it historically has. I just did not expect 5 years of inventory at this price point.
July 5th, 2010 at 8:48 pm
What’s with all the spam?
July 5th, 2010 at 8:13 pm
@patriotz: That’s laughable. CoV has been running a budget deficit every single year for as long as memory serves. What do you think they do when money runs out in the middle of the year? Shut down and go golfing in Phoenix? How do you think CoV has a AAA rating to begin with? Because it borrows money by issuing bonds to cover… oh yeah, budget shortfalls!
Not allowed to run a deficit. Right, lots of places around the world are forbidden to run a deficit, yet somehow they find ways around the issue. Call it what you want, it’s a deficit. You can’t force an entity that has the power to tax to run a balanced budget. Why would they?
July 5th, 2010 at 8:11 pm
@laneway:
whoops…I meant “invincible” not “invisible”
though that huge property gain you thought you’d accumulated may soon be “invisible”
July 5th, 2010 at 7:50 pm
@crashcow:
Great Scott!!!!
July 5th, 2010 at 7:30 pm
@laneway:
“Oh goodie…Chinese property market begins collapse”
Same time as ours? Those bastards!
And they just lost 90K on a westside detached in a single month.
Where oh where is a corrupt communist party official/sweatshop owner to put his money these days?
July 5th, 2010 at 7:01 pm
Hey P, hate to interupt your stellar record but even the Shitty of Vancouver admits to running a deficit on their official website.
http://www.cityofvancouver.us/.....3859#57899
“To put it simply the cost of providing services is increasing at a faster rate than the growth in revenues available to fund them.
On the expense side the cost of hiring and keeping our skilled personnel is increasing faster than inflation and population combined. Also, the city’s contracts with other agencies increase on average by 8-10% per year (Jail, IT, Corrections, LERIS, CRESA, District Court).
On the revenue side the elimination of the local Business & Occupation Tax, voter-approved property tax initiatives limiting property tax growth, voter-approved elimination of the motor vehicle excise tax and a growing dependence on “elastic” (dependent on economy) revenues such as sales tax has contributed to our current deficit.
The two initiatives and the elimination of the B&O tax have caused an estimated loss of almost $107 million in revenue to Vancouver from 2001 through 2008.”
Vancouver has just floated a massive bond issue. Far more than the debt outstanding on the OV fiasco. There was mention of putting the extra money ‘into shortfalls in other areas’. Is ‘debt and deficit’ an argument inside a semantic conundrum in this case. They can call the debt anything they like, I call the continual shortfall and increased spending what it is…deficit spending.
BTW..I think the 6 million figure indicated on the website is wayyyyyyyy short of reality. I’ve known some crooked and creative accountants in my time. Look at how the BC gov renamed the Olympic expenses as anything else but. Bottom line is we pay property taxes based on an market value assesment. Its safer to say that the city revenues haven’t been affected by the crash in RE prices……YET!
July 5th, 2010 at 7:00 pm
Oh goodie…Chinese property market begins collapse
http://www.bloomberg.com/news/.....banks.html
Thank goodness lots of Chinese have instead put their money in Vancouver’s invisible housing market! hahahahaha
July 5th, 2010 at 6:33 pm
great scott, marty!
West Van Apartment Benchmark
Apr: $727,384 (peak)
May: $667,398 (-8% off peak)
Jun: $589,734 (-19% off peak)
July 5th, 2010 at 6:33 pm
@paulb.:
New Listings 261
Price Changes 161
Sold Listings 118
Let the re-listings begin!
July 5th, 2010 at 6:29 pm
@paulb.: Thanks Paulb. The listings’ flow is not drying yet for the summer. Interesting times.
By the way, isn’t the pace of price declines even larger than what we saw in ‘08?
What could the gov’s do about this? When do we start hearing the first sob stories? Whocoodanode?
July 5th, 2010 at 6:20 pm
@McLovin:
The solution for your developer friend is simple: PAY LESS FOR THE LAND. His HST conundrum is now solved. You’re welcome.
July 5th, 2010 at 6:01 pm
nice analysis of rebgv stat report.
http://blog.richmondblog.ca/
July 5th, 2010 at 5:52 pm
I have converted all the HPI figures from April to June into monthly, from peak, and annualized declines. It’s looking like 2008 all over again, except this time there is nothing to prop up the market and keep it going!
http://pissmeoffvancouver.blog.....stats.html