‘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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Houses owner
Houses owner
10 years ago

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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patriotz
10 years ago

@rp1:

A housing bubble destroys the social and economic fabric of a country and we went full speed ahead on that one.

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.

patriotz
10 years ago

@Devore:

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!

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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jesse
10 years ago

@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.

M-
10 years ago

@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…

rp1
rp1
10 years ago

#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.

Beatbox
Beatbox
10 years ago

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.htm

Teddy Bear
Teddy Bear
10 years ago

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…

crashcow
10 years ago

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

Island Dude
Island Dude
10 years ago

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.

crabman
10 years ago

What's with all the spam?

Devore
Devore
10 years ago

@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?

laneway
laneway
10 years ago

@laneway:

whoops…I meant "invincible" not "invisible"

though that huge property gain you thought you'd accumulated may soon be "invisible"

Doc
Doc
10 years ago

@crashcow:

Great Scott!!!!

Best place on meth
Best place on meth
10 years ago

@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?

realpaul
realpaul
10 years ago

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/deficit.asp?menuID=… "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… Read more »

laneway
laneway
10 years ago

Oh goodie…Chinese property market begins collapse

http://www.bloomberg.com/news/2010-07-05/rogoff-s

Thank goodness lots of Chinese have instead put their money in Vancouver's invisible housing market! hahahahaha

crashcow
10 years ago

great scott, marty!

West Van Apartment Benchmark

Apr: $727,384 (peak)

May: $667,398 (-8% off peak)

Jun: $589,734 (-19% off peak)

Best place on meth
Best place on meth
10 years ago

@paulb.:

New Listings 261

Price Changes 161

Sold Listings 118

Let the re-listings begin!

domus
domus
10 years ago

@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?

jesse
10 years ago

@McLovin:

I wonder how this will trickle down and affect prices?

The solution for your developer friend is simple: PAY LESS FOR THE LAND. His HST conundrum is now solved. You're welcome. 😉

paulb.
paulb.
10 years ago

nice analysis of rebgv stat report.

http://blog.richmondblog.ca/