July 2010: sales and prices down
The hot summer is not so hot for the Vancouver real estate market which seems to be withering on the vine. July saw the third month of price declines that started at the April peak. If this keeps up how much longer will we be able to hold on to our coveted ‘most overpriced real estate in North America’ status?
Here’s the story in the Sun: Sales plummet in July
Lower Mainland real estate markets saw their slowest or near slowest July in a decade, the region’s real estate boards reported Wednesday, with sales down by almost half from July 2009′s red-hot markets and prices slipping from the previous month’s levels.
Here’s the Globe and Mail: Vancouver Homes Market goes cold
And there’s a lot of supply on the market, threatening to pull prices lower, with inventory levels 33 per cent higher than this time last year, according to the Real Estate Board of Greater Vancouver.
“With the pace of home sales and listings easing off in our market, we’ve begun to see a levelling of home prices from the record highs seen in the spring, creating greater affordability,” said Jake Moldowan, the board’s president. “Activity in today’s marketplace is clearly trending in favour of buyers.”
Here’s the PDF stats package and Crashcow rounded up the following list of benchmark price slippage since April:
Residential (GVRD)
Greater Vancouver: -3%
DETACHED
Greater Vancouver: -3%
Burnaby: -2%
Coquitlam: -5%
Maple Ridge: -3%
New Westminster: 3%
North Vancouver: -3%
Pitt Meadows: -7%
Port Coquitlam: -7%
Port Moody: -3%
Richmond: -3%
South Delta: -5%
Vancouver East: -3%
Vancouver West: -4%
West Vancouver: -3%
ATTACHED
Greater Vancouver: -2%
Burnaby: 0%
Coquitlam: -5%
Maple Ridge & Pitt Meadows: -2%
North Vancouver: -4%
Port Coquitlam: 0%
Port Moody: -6%
Richmond: 1%
South Delta: -1%
Vancouver East: -8%
Vancouver West: -4%
APARTMENT
Greater Vancouver: -2%
Burnaby: -2%
Coquitlam: 0%
Maple Ridge & Pitt Meadows: -2%
New Westminster: -3%
North Vancouver: -2%
Port Coquitlam: -1%
Port Moody: 0%
Richmond: 0%
South Delta: -2%
Vancouver East: -5%
Vancouver West: -3%
West Vancouver: -12%
August 6th, 2010 at 1:48 pm
I’m continually amazed that houses in East Van, sitting in a sea of unattractive Vancouver Specials with poor transit access and nearby services, cost a lot more than New West.
I have a friend that lives in New West and he’s always asking me to have coffee in his hood. I have took him up on his offer few times and each time I do I can’t wait to get out of there. Many zombies and hood rats, to me it has very few redeeming qualities that make for a decent neighbourhood. There is one street with lovely tree lined street and huge heritage homes on nice sized lots but the rest of it is nothing special.
It is funny how he thinks his little home on a small flat lot will be appreciating forever. I have another friend that thinks the same of Coquitlam like its something very special. They both think that anything on this side of the bridge will be fine and will not go down but in the valley they will take a pounding. I just chuckle and say yeah that makes sense. If you put a bull in his own home beside a garbage dump he still would think he has found paradise.New West and Coquitlam are far from paradise, there are worse places in the world but there are way better for half the price.
August 6th, 2010 at 7:16 am
@vhb
as a long I was voting your
August 5th, 2010 at 11:53 pm
@Anonymouse:
Most boomers retirement plan is their house. How will they be fine, exactly?
August 5th, 2010 at 11:26 pm
Some of the Hawaiian airlines rates out of SEA are as low as $135 each way. As usual play with the dates.
http://www.hawaiianair.com/
August 5th, 2010 at 11:22 pm
I found the news story about a single instance of raw sewage escaping into Halifax harbour really funny. It made the National rotation on all the stations.
Vancouver dumps an estimated 800 million liters a day of untreated raw sewage into the waters of English bay, False creek and the Harbour….every day of the year. There is certainly a credibility gap in the news coverage. Vancouvers case is public information for all to see as COV vs DOFAO-Regina before the Supreme Court of Canada.
Dr David Suzuki and the UBC marine bio-labs have proven that 99% of all sealife in the waters surrounding Vancouver is too toxic to eat and displays cancerous lesions ….. there is an infectious strain of incurable bacteria infecting beach goers that has washed up on the beach having been discharged as hospital waste ( it took the Americans to bring this story public but not a peep here…. yummy)…….this is not news apparently…..now get back to the bank and get pre approved for your new pre sale people…..nothing to see here.
There are some cheap flights, I found a Continental filght Vanc – New York direct for just over $400 inc taxes. I did notice that there are a great variety of prices on the same flights through the same carriers…its like they’re fishing for suckers…prices can rise and fall hundreds of dollars in a few hours…its so wierd…..Air Canada wants $1030 for the same flight…..on the same plane…..caveat emptor.
August 5th, 2010 at 11:19 pm
@Cody:
Let me help;
http://www.urbandictionary.com.....20retarded
August 5th, 2010 at 11:03 pm
@Cody:
That’s Mr. Genus-Species, to you.
August 5th, 2010 at 10:52 pm
@Anonymouse: ok. humour was lost. I was quoting samantha’s mis-spelling for humour.
August 5th, 2010 at 10:46 pm
@Anonymous: “Over 95% of all airline seats sold are not “full price” and are therefore a seat sale.”
Where did you pull that stat out of?
August 5th, 2010 at 10:42 pm
@Anonymous:
“I don’t think booking a few flights out of Bellingham is going to make too much difference.”
You are dense. The millions that they are investing in the airport there is not to cater to locals… they are targeting people from the GVR. Yes, it will make a difference.
August 5th, 2010 at 10:39 pm
Anon:
“You are dumb to say almost all tickets are a ’seat sale.’”
Over 95% of all airline seats sold are not “full price” and are therefore a seat sale. No one pays full price unless they have to fly a specific day and time and are stuck paying it. Usually for business on short notice. I suggest you find someone to help you out if you ever do decide to travel.
August 5th, 2010 at 10:33 pm
VHB:
“Yes, taking bottles of liquor through airports is so troublefree. Ha! If you check it, high risk of theft. Or it breaks all over your clothes. If you take as carry on. Whoops! CATSA employees get to drink it.”
Just pay for it at duty free in the airport and it is waiting for you packed in bubble wrap upon boarding. No hassle at all. I would do that even if traveling through Bellingham as it is easier than stopping at the border. It sounds like all the commentators have never traveled as they seem to be unaware of the basics. Who packs booze? Especially with the current luggage weight restrictions. Only a novice newbie would do that.
August 5th, 2010 at 10:29 pm
And why would I have to put on my helmet Mr. Genus?
August 5th, 2010 at 10:29 pm
@VHB:
Actually I think fixie is right, its a cranberry martini therefore it should be -tini-, not -teeny-. Wow, I feel foolish spelling it cranteeny this whole time. I blame Samantha D. for this.
August 5th, 2010 at 10:25 pm
@Anonymous:
No one mentioned HST and everyone is talking about taxes-in BTW.
You still can’t show sub $400 return-flights for Vancouver.
You are dumb to say almost all tickets are a ‘seat sale.’ … And you are horrible with your guesses.
August 5th, 2010 at 10:19 pm
@Anonymous: “The same booze is available in other states such as Hawaii. Man you are dumb. ”
Yes, taking bottles of liquor through airports is so troublefree. Ha! If you check it, high risk of theft. Or it breaks all over your clothes. If you take as carry on. Whoops! CATSA employees get to drink it.
Been there, done that, lost the 100 euro bottle of scotch . . .
I would be picking it up in Bellingham, myself.
August 5th, 2010 at 10:11 pm
@Anonymous: great video find! here’s a fixed link: http://tinyurl.com/2bfbdwm (skip to 30 min mark)
August 5th, 2010 at 10:05 pm
Meth:
“I’d like to know how you “never pay more than $400″. This is the absolute best fare I could find all in, a blowout sale from Westjet”
I guess I am smarter than you. Cut back on the Meth.
Anon:
“I assume you don’t understand the tax difference between travelling Can to US vs. US to US.”
Yes the HST does not apply to flights out of Canada. I was talking all in including taxes BTW.
“If you want to ‘wait’ for a seat sale, why don’t you wait till Allegiantair introduces their Bellingham Hawaii route. Family of 4 and you can easily save $1000 for flights out of Bellingham.”
Almost any airline ticket you buy is a “seat sale”. I will wait and see when it happens.
“Then shop in the US before you come home. Pick up cheap booze and cig at the duty free while you’re at it.”
You can still shop in the US when traveling to the US regardless of flying through Bellingham. The same booze is available in other states such as Hawaii. Man you are dumb. Like I said I guess you have never traveled.
“I agree it’s not always 50% but why don’t you compare YVR to Vegas versus BLI to Vegas and see the price difference. Sometimes, it is 50% difference.”
I know, but we were talking about Hawaii not Vegas. I often fly to Vegas out of Bellingham because it is way cheaper. Hawaii it doesn’t look like it as of right now.
“Hate it or love it, this is excellent news for Vancouver vacationers and bad news for local travel economy.”
I don’t think booking a few flights out of Bellingham is going to make too much difference. Hey, I wish Hawaii was cheaper out of Bellingham but I was just pointing out it is not by much if at all and not 50%. We will see when flights start going what happens and more competition is always good.
August 5th, 2010 at 9:48 pm
@fixie guy: “Crantinis” That would be cranteeny’s, actually.
August 5th, 2010 at 9:37 pm
“As usual, the boomers will make out like bandits and screw over the following generations.”
Boomers are historically the worst savers and won’t be sipping Crantinis into the sunset years. Don’t get your demographic data from Fark.
August 5th, 2010 at 9:36 pm
Buff Butler, thank you for your explanation. I agree that it doesn’t make sense to purchase such a property. I have done the math a few years back and that’s why I haven’t bought and am on this blog. The original premise was the property was already bought and selling would incur 100k loss. I see more choosing to hold at the miniscule yield than losing 100k outright. If there are a lot of people in such a position, that might explain why inventory hasn’t been growing like we thought it would. As long as the negative cash flow is less than principal portion of mortgage, they’ll hold.
August 5th, 2010 at 9:32 pm
Michael Hyatt who co-founder, BlueCat Networks (a very rich guy) was co hosting the Lang and O’Leary exchange on CBC today when they discussed Canadian real estate 30 minutes in.
Check it out as Michael reveals he has lots of money but sold his principle residence 6 months ago to rent because he doesn’t see the value (he lives in Ontario). He is planning on buying back in when prices drop. Some very bearish comments about Canadian housing in general.
After the 15 second commercial move to 30 minutes in for the segment for the part on real estate.
http://www.cbc.ca/video/#/News.....ng_&_O‘Leary_Exchange/ID=1560230541
August 5th, 2010 at 9:30 pm
Its not the boomers that will be affected. They bought their houses long ago when prices were low. Unless they took out HELOCs or bought multiple investment properties in the last few years, boomers will be fine. Its the folks who bought in the last 5 years that will be hurting i.e. mostly likely folks in their 30′s. As usual, the boomers will make out like bandits and screw over the following generations.
@GB:
What the hell IS that? A former prison? Cult headquarters? Gulag dormitory? That is nasty!! And they’re asking for $2M!! Gah!! *shoots self in head*
August 5th, 2010 at 9:24 pm
It seems that some of my messages don’t get through. Are links held in moderation?
August 5th, 2010 at 9:22 pm
@VHB: Great find VHB – funny enough even with 17 months of inventory, residential median and average prices are flat since April (i.e. distributional changes).
This one will be ground zero for the B.C. bust. Watch what happens, particularly with new developments and foreclosure sales.
August 5th, 2010 at 9:20 pm
@Anonymouse:
I can get past Ian Watt’s gravely voice just fine.
It’s his cocaine induced facial contortions I can’t get past.
Normally you only find a face like that on stroke victims.
August 5th, 2010 at 9:18 pm
@Anonymous:
“I assume you don’t travel much. Waite a couple of months out and you can book for $400 in Jan.”
I assume you don’t understand the tax difference between travelling Can to US vs. US to US.
If you want to ‘wait’ for a seat sale, why don’t you wait till Allegiantair introduces their Bellingham Hawaii route. Family of 4 and you can easily save $1000 for flights out of Bellingham. Then shop in the US before you come home. Pick up cheap booze and cig at the duty free while you’re at it.
I agree it’s not always 50% but why don’t you compare YVR to Vegas versus BLI to Vegas and see the price difference. Sometimes, it is 50% difference.
Hate it or love it, this is excellent news for Vancouver vacationers and bad news for local travel economy.
August 5th, 2010 at 9:16 pm
Buyer’s market? Please, everyone, stop using that propaganda. A buyer’s market is when prices, not sales, are low. We are in nothing more than a very well concealed seller’s market.
August 5th, 2010 at 9:16 pm
@VHB:
Holy crap.
If I owned property in the Okanagan I’d auction it off tomorrow for whatever I could get.
UGGGLLLYYY!
August 5th, 2010 at 9:11 pm
@specialfx3000: perhaps someone needs to put up “Cameron Muir is a liar” posters up near the Sun offices…
August 5th, 2010 at 9:11 pm
@Anonymous: #155
“I go to Hawaii regularly and never pay more than $400 all in return.”
I’d like to know how you “never pay more than $400″. This is the absolute best fare I could find all in, a blowout sale from Westjet.
Base Fare :337.99 CAD
HST:1.80 CAD
AIF:15.00 CAD
ATSC:25.91 CAD
US Taxes and Fees:52.69 CAD
NAV/Ins:15.00
Total:448.39
August 5th, 2010 at 9:10 pm
East Van is central and closer to downtown. For those that work and play downtown and Westside, it is a way better option. IMO, the only advantage New West has over East Van is the presence of an IHOP. Sorry, not a fan of New West.
Actually I think his videos are pretty good. He’s generally an optimist of course but he’s pretty honest about when there is a slowdown and often mentions when listings are high and the impact on prices and how sellers need to be realistic. If you can get past his gravelly voice I think a lot of his videos would be informative for anyone buying a condo downtown. He’s even talked about bedbugs (probably hoping to get realpaul as a regular viewer).
August 5th, 2010 at 9:08 pm
@VHB:
Good ‘o Cameron Muir says ““However, the buyers’ market is
expected to be short-lived….”
Of course Mr. Chief Economist, the Abertan and Asian investors will return to the Okanagan shortly after all the smoke clears.
August 5th, 2010 at 9:07 pm
“BS. I challenge you to go to westjet right now to find a return vancouver/hawaii set of flights $400 all in for early 2011.”
I assume you don’t travel much. Waite a couple of months out and you can book for $400 in Jan.
Try September, October, November and you can get $400 right now for many dates (not every date). BTW the $149 for the US flight you can’t book now, was for select flights, an introductory offer and you pay extra to take each bag each way. Go ahead and book out of Bellingham if you think you are getting half off but your not. The power of marketing is making the naive think they are getting a special deal when they are not. Kind of like realtors are doing now when prices slip.
August 5th, 2010 at 8:56 pm
I found Vancouver-Hawaii flights for $480 all-in return on westjet.com, September 2010. So Bellingham most definitely isn’t a constant 50% discount.
August 5th, 2010 at 8:54 pm
Fishy’s got the OK numbers here.
29.6 MOI in the Shuswap/Revelstoke Area
23 MOI in the Central OK area (Kelowna etc)
26.8 MOI in the North Okanagan area
August 5th, 2010 at 8:39 pm
@Disbelief: You can also hedge stocks w. options so they don’t go to 0.
August 5th, 2010 at 8:37 pm
@Confused_among_rich_asians:
The comment VHB made is very true. Essentially it takes him out of the market for future purchases. If this is the economic norm then prices can’t move up anymore.
Looking at the math of the whole thing the person is essentially paying 120k in escrow for a forced savings account that holds tons of risk. Compare the yeild of the asset ex carrying costs you are yielding about 0.5% above the gov can 5yr bond (2.3%). So tell me what would be different then buying 120k of 5r AA corporate bonds with 120k capital (~4% yield right now) or buying this property where carrying costs equal the yield (0%). It means you require 1% capital appreciation per year (4:1 leverage) just to outperform a low risk profile bond with 0 leverage that you can pretty much always liquidate. This assumes that no months of rent are lost; no assessments and no price declines. It also doesn’t compensate you for any labour put in. This is the issue I see with a lot of investment positions is that risk is never considered (you alluded to this in your post; high five).
Now if you look at what has happened in the real estate market. Sales have dropped off and taxation has increased. If you project the regular sales pattern forward with our inventory then we will be getting some impressive MOI later on in the year indicating price declines. We’ve watched this move a few times now. We should know what happens by now. Now consider that housing is the main driver of money entry into our economy (and the US) which dollar volume has fallen off it means our economy will at least get a slight cold. If 0% forced savings is the norm and x% of people lose their job these people will be forced to liquidate eventually. If you ever wondered what the difference likely is between here and Edmonton in terms of recovery it is simply timing. Edmonton prices dropped sooner and so the loss was sustained for a longer time becoming permanent. Vancouver 4 months in had ZIRP implemented by BOC.
So what are the favourable outcomes in this individuals scenario?
-Capital appreciation: not likely given above.
-Rental increases: not likely given no price increases
-Inflation: i doubt it; at least not in 2-3 years. By the time it is likely the individuals mortgage rate will be resetting… This is terrible.
-They hold for 5 years without any “economic event”. There principal gets paid down x% through that time. They have saved 800$ x 60 = 48k at near 0% return. Their yield would increase and now be an epic 0.2% yield on 25 yr amt. GASP! The only other option is to go variable which may be good.
-Interest rates going down. While it is true there is a small amount of room for yields to contract; BOC already has their thumb on the overnight rate down as far as it will go. Any substantial shifts in 5yr debt would indicate a flight to safety aka recession. I don’t know if anyone else follows the bond market closely but the recent moves haven’t been very encouraging.
The only favourable benefit is the tax deferral that RE offers. But it doesn’t sound like he’s a Billy Gates.
I could type a whole novel on this but this should be good enough. I agree with you this is a good discussion.
August 5th, 2010 at 8:19 pm
@Anonymous:
BS. I challenge you to go to westjet right now to find a return vancouver/hawaii set of flights $400 all in for early 2011.
August 5th, 2010 at 8:13 pm
@Boombust:
Not really. Currently, there are like two counters and no ticker to show arrival/departure.
The runway is too small and only handle smaller planes.
Right now, they are going thru a relatively major facelift and will be ready next year to handle bigger planes and longer-haul flights.
Hawaii will be awesome. Hopefully Florida and other eastern states soon after.
Bye Bye YVR.
August 5th, 2010 at 8:13 pm
I just posted a link to part 2 of the Victor Adair interview by mistake. Here is part one where he talks about Canadian real estate. Very interesting.
http://watch.bnn.ca/headline/j.....clip329499
August 5th, 2010 at 8:07 pm
Victor Adair is a regular on CKNW tells BNN what he really thinks of the current asset markets including real estate. Very interesting and something you have never heard on CKNW. Hint he is not bullish on Canadian real estate and even rents his principle residence.
Check it out:
http://watch.bnn.ca/headline/j.....clip329502
August 5th, 2010 at 7:47 pm
Re: Bellingham 1/2 price to Hawaii
Starting from $149 US each way plus taxes and baggage fees is not half price over flying from YVR. All in you are looking at $400 return with bags.
You can go Westjet for similar pricing out of YVR. I go to Hawaii regularly and never pay more than $400 all in return.
August 5th, 2010 at 7:36 pm
The obvious difference with a stock investment going to zero and a Real Estate investment being in negative equity is simply that. The stock investment can only go to zero while your rock solid real estate investment can really wipe you out and you can’t just mail in the keys to your bank like most of our neighbours to the south have done. I have been saying for a long while there will be blood in the streets. There will be many so called rich baby boomers living on cat food long into their golden years. Stupid is as stupid does. Real Estate speculating is great just don’t stay in too long.
August 5th, 2010 at 6:44 pm
“Good on ‘em, hope they turn Bellingham into a mega-airport for Vancouverites.”
They did that a looooong time ago.
August 5th, 2010 at 6:36 pm
VHB, that’s true.
I’m sure we all agree that was a bad choice.
I’m actually more concerned and confused about the negative cash flow = principal portion of the mortgage thing. As I mentioned, it seems it’s considered a loss here but in my group, it’s not considered totally a loss since the amount being paid still goes to principal and not to any other carrying costs. Can you or anyone else clarify?
August 5th, 2010 at 6:34 pm
@Best place on meth: I tried to book a flight from Vancouver to Washington, DC last night and the cheapest price I could get (inclusive of taxes and fees) was about 950 CAD. I found a package flying out of Seattle PLUS three nights at the Marriott for 575 USD, all inclusive. That is enough savings where I don’t mind driving the 3 hours to SeaTac and back at the beginning and end of the trip.