The death of the American Dream
Remember when all you had to do was buy a house and live in it as the price went up? It’s only been a few months of dropping prices here in Vancouver, but in the US it’s getting harder to remember the good old days.
Call it the American dream that died. The slump in U.S. housing, now more than three years old, is the most severe since the Great Depression. A move by the government to revive the market – through a tax credit for first-time home buyers – met with some success earlier this year, but after the credit expired, sales collapsed in July. Now economists fear further declines in home prices, which have already fallen 30 per cent since their peak in 2006.
The days when Americans could count on their homes as the pillar of their financial affairs – a seemingly magical asset, bought with borrowed cash but steadily increasing in value, tapped to fund college tuitions, second homes, and retirement travel – are past. Even if the market eventually recovers, as many expect, the era of the home-as-nest-egg is over for the foreseeable future.
In this brave new world, housing prices don’t always go up, and if they do, the pace is more likely to be in line with inflation. People can find themselves trapped in their homes, unable to sell because their house is worth less than what they owe on their mortgages, a condition now shared by one in four U.S. homeowners.
Read more about the fundamental shift in the US housing market over at the Globe and Mail.
August 29th, 2010 at 7:21 pm 1
http://www.greaterfool.ca/
good read today on the
Canadian version of the
American meltdown
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August 29th, 2010 at 10:49 pm 2
Blueskies, thanks for the link.
"Right now, of course, it’s all exciting. Bursting bubbles. Dickhead economists. Realtor revenge. Granite and stainless Armageddon. Those people who wondered how 25-year-olds with no savings could afford spacious new digs now know the answer. They couldn’t."
Dickhead economists — Garth can't be referring to the Professor from the UBC Sauder School of Business or that Chief Economist of BC Real Estate Association?
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August 29th, 2010 at 10:50 pm 3
“The death of the American Dream”
Well it works like this……….
You know how year after year the market defied the bears?
Year after year, the bulls will wait for the market to roar back.
Year after year they will wait for the spring market that just won't spring.
I think it may be time for some to sell their condos and for their” huzbund” to sell his.
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August 29th, 2010 at 11:25 pm 4
Thanks for posting the link to Garth. he has a good explanation for why prices haven't fallen yet:
First, often asked here: why are prices not falling as quickly as sales?
The answer has been stated before, but let me make it as clear as possible. Sales levels are set by buyers – they are the ones with the power to make offers, make deals happen. When buyers believe prices are too high, vendors are too greedy or the market is in decline and better values lie ahead, they stop buying. That’s exactly what’s just happened. So, sales crash.
Prices, on the other hand, are set by sellers, who also have the power to withdraw their homes from the market (which they are doing) if they see prices falling. Sellers are largely more delusional than buyers, who like to masquerade as bloodsucking bottom-feeders. In markets like this one, it’s not a good fit. Hence, sales crash, listings diminish and prices stall.
This will, however, change. Sellers who came to market in the last month or so are still hoping to snare one of those greater fool idiots who stumbled out of 2007. It will take 90 days or so on the market, languishing without an offer and barely any showings, for reality to set in. At that point – towards the end of the year (as I told you months ago) – the price reductions will start. And so will the fear.
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August 29th, 2010 at 11:52 pm 5
Larry's east van stats are out:
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August 29th, 2010 at 11:52 pm 6
This is so typical. In many parts of the US it's a great time to buy a house, but very few want to. Last spring in Vancouver was a horrible time to buy, yet there were line-ups and husbahs buying sree.
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August 30th, 2010 at 12:12 am 7
I talked briefly with a friend-of-a-friend who has just liquidated everything this august. Sold his house in kits and investment condo because he believes we're in for "another recession or worse".
He's now sitting on 1.9 mil in cash and planning on renting and waiting out the market for a few years. He either has the best timing ever or he's going to be dissapointed when he's priced out of that east van fixer-upper in a few years.
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August 30th, 2010 at 12:34 am 8
@Anonymous:
If you have a house on the trucking route like Eyes then you should be alright.
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August 30th, 2010 at 12:43 am 9
"He either has the best timing ever or he’s going to be dissapointed when he’s priced out of that east van fixer-upper in a few years."
Well, I wouldn't be worried about THAT!
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August 30th, 2010 at 12:50 am 10
@Pete: Uh oh bears, now everybody getting bear fever and selling. Angry wives and families waiting in stinky rental basement suite. Then we have few years of stagnation followed by 5-10% drop and then all renter bears get excited and jump back in market and prices back up to kite to moon. Plus Canucks also win Stanley Cup.
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August 30th, 2010 at 12:53 am 11
Hey bears, put on serious face like F at G20 and ask seriuos question.
What if sales slowdown is not because of run out of buyers because all bought, but because demand is being held back because people waiting for better deal. If that case, then maybe 10% drop trigger all these buyer to jump back in just like in 2008. Good deals at 10% off bears. Then bears frustrated again, at least this blog can keep going until 2020.
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August 30th, 2010 at 1:01 am 12
Wow, now even SuperSmartBull is predicting a 10% drop. If even our leading bull has turned bearish, who is going to hold up the market now?
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August 30th, 2010 at 1:17 am 13
@BigMomma: SSB not predict anything, just open bear eye to other possibility than 110% off armageddon.
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August 30th, 2010 at 1:26 am 14
@SuperSmartBull: "because demand is being held back because people waiting for better deal"
Better deal is at zero, SSB. When you can't touch the bottom of the pool with the little tiny tips of your tippy tip toes, you don't know how far it is to the bottom.
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August 30th, 2010 at 1:34 am 15
@jesse:
That is how hardcoreVCI Bear see market. Other 99.8% of buyer may see value at 10% off. We already see precedent for behaviour in 2008.
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August 30th, 2010 at 1:37 am 16
@SuperSmartBull:
Will mortgage rates be negative to get people to buy this time?
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August 30th, 2010 at 1:45 am 17
"Other 99.8% of buyer may see value at 10% off. We already see precedent for behaviour in 2008."
What buyers? How many? Let's say it's 99.9999%, not 99.8% of buyers who "see value". 99.9999% of a very small number of available buyers is a very small number of buyers. They can't possibly rescue this market.
The buyers are all used up. We borrowed demand from the future, and there's no demand left to borrow.
The move-up buyers can't afford to move up, because they're already mortgaged to the hilt and their properties are no longer appreciating like crazy. And the first-time buyers, who feed the real estate escalator, are gone for a decade.
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August 30th, 2010 at 1:49 am 18
I'm a buyer and personally I would see good value at around 20% off.
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August 30th, 2010 at 1:52 am 19
@SuperSmartBull:
The precedent for the buying frenzy was not the decline in price, it was the HUGE drop in the cost of capital.
Price plus drop in Cost of capital was enough to see almost a 40% decrease in initial montly costs (for those who see that as the most important thing).
So Yes, the "pent up" demand was unleashed, but it was unleashed on the combination of the two which resulted in a nearly 40% decrease in monthy costs over just 6 months prior.
IMO…financing costs was the shoe that dropped last time…this time is the other shoe Prices!
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August 30th, 2010 at 1:58 am 20
@“A-sharp” accountant: Even the great RE guru eyesthebye will confirm that. He has admitted that without the low interest rates, he would have never been able to buy.
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August 30th, 2010 at 2:00 am 21
@BigMomma: "I would see good value at around 20% off."
Well SSB there's 1 buyer for you at 20% off. Good luck.
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August 30th, 2010 at 2:02 am 22
I wonder what SSB does for a living that he has time to post all day like he does…?
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August 30th, 2010 at 2:09 am 23
@Girlbear: he's a realtor….
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August 30th, 2010 at 2:20 am 24
U guys r missing out on za best BULL sausage fest circle jerk
all time! On ReTalks of course!
Bull 1: oh yes Vancouver iz different
Bull 2: unfathomly agreed with all honesty!
Bull 3: we have no land! za Chinese is invading!
Bull 4: by george yor right!
etc etc etc
2 legs good, 4 legs better!
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August 30th, 2010 at 2:23 am 25
@Girlbear:
I'd bet any money they're either a REALTOR or an assistant at a branch.
No one else would be so diligently and passionately stupid for such a long time.
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August 30th, 2010 at 2:31 am 26
@Anonymous:
….says the ANONYMOUS blog poster. Haha bear.
Why bear so quick to try to label people, does this make analysis easier for bear? Sad and can lead bear to disregard or take as truth statement base solely on label.
Look, bear not make 100% case for why market will not rebound like in 2008. Always focused on lower rates in 2008 as reason, and that if price drop this time they will keep plummet to bottom because of lack of confidence and rates already low. I think this is simplistic.
In any RE purchase, 2 things at work. (1) Ability to pay – through low rates or rich asian cash (2) Willingness to pay – psychology of market. Need both to support market, one doesn't work without other. If we have even small dip of 10% we are in same price place as 2008 for #1 since rates still low. So that is red herring, do not need to lower rates again to stimulate #1. So bears counting on #2 to change, psychology change to fear and everybody run like armageddon or Running of Bulls in Pamplona. Possible, but not certain bears. In 2008, after 15% drop even though everybody talk about new Depression and soup lines, people still pile into Vancouver RE market because psychology strong and rates low. Happen again? Let's see bears.
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August 30th, 2010 at 2:50 am 27
Canadian banks are the best in the world and the economy here is booming. You negative people need get off your computers, go back to your underground layers and make sure the dirty jobs are being done for us ellites.
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August 30th, 2010 at 2:58 am 28
#19 A, right on…the bullshit was that there were millions of frustrated buyers who formed a pool of 'pent up demand' when in fact the free money created a tsunami of speculation who bought multiple properties that are only now coming to market. The desperate 'pre completion' buyers as we see are very reluctant and further…incapable of closing. The others are underwater with the current drop in prices and/or renting at a loss every month. The worst examples are in the OKanogan and Calgary so far…but I think the stats are going to follow fridays release of real estate stas as falling sales again eclipse historical norms for the third month in a row. Denial can't keep this pig afloat for much longer.
Still , let the pimps play, they will probably allow the banks to overlook re-appraisals in the first year as the number of zero equity homes hit refi…but as it is technically contrary to the Bank Act to loan at zero equity we will see some political blowback from that.
We have the World Bank forcing free daycare on BC taxpayers. This will cause a small percentage of 'homeowners' to free up a few hundred a month for payments rather than spending the money on daycare. An excellent discourse was released this am on the Big Slut show….Bill sounded taken aback at the fury of facts his producer hadn't prepared him for….comical. Look for more of these artificial subsidies as an attempt to keep the bubble aloft. Of course it will burst…as it has everywhere else..its just a matter of time.
I think they were hoping to 'create equity' by juicing the market agian with the new subsidy…but that 'equity' has been wiped out by the stubborn collapse of the market..despite the best efforts to manipulate the thing. It will be intersting when the variable rates come up for refi and they are so far underwater that the daycare subsidy won't bridge the loan. This new subsidy is the equivelant of the $8500 giveaway that failed to save the market in the US.
I too was suprised that the BC government was taking its marching orders from the World Bank on this day care issue…not something that was mentioned in the papers….they seem to think that fucking the taxpayers will generate additional revenues for the government to keep the inflato-train running straight. I have said before…..100% is everything…if Canadians are 150% in debt now…..how does the World Bank expect to gouge the taxpayer for more? I'm going to suggest that we rationalize expenses as opposed to raising taxes. We should do what they are doing in the Euro Zone and the US…cut the wages , benefits and number of parasites sucking off the taxpayer by 40%.
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August 30th, 2010 at 2:59 am 29
@SamanthaD:
20% off in NOTHING. We will need to go back to somewhere between 3X – 4X yearly income prices before I will consider. There must be still some sane people left out there, so I hope I am not alone. Or am I?
Am I Legend?
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August 30th, 2010 at 3:08 am 30
@SuperSmartBull: "even small dip of 10% we are in same price place as 2008 for #1 since rates still low."
You assume the pool of money is infinite, with an infinite number of buyers waiting on the sidelines. Pool only so big, bull, which is why your argument is wrong.
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August 30th, 2010 at 3:14 am 31
@ SSB: What % odds would you give to a 2008 type rebound; assuming the same decline? 90? 80?
Also a potential FTB here. 120-140x rent with 90% confidence that we're past the point of significant price decline velocity @ 350-400K. I don't see a rebound this time, so we`ll sit on the flat line for a bit before we pull the trigger.
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August 30th, 2010 at 3:37 am 32
"I wonder what SSB does for a living that he has time to post all day like he does…?"
He's currently unemployed and lives in gramma's basement suite for free.
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August 30th, 2010 at 3:38 am 33
"Canadian banks are the best in the world"
Does that mean anything? The best of the fools is still a fool.
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August 30th, 2010 at 3:46 am 34
From today's Guardian.
House prices have nowhere to go but down
http://www.guardian.co.uk/business/2010/aug/30/ho…
Amazing how this simple, well-thought analysis applies to Vancouver.
For those who ignore it, south-east England is one of the most densely populated areas in Europe, home to both a strong services and manufacturing sector. And prices are still going to go down…
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August 30th, 2010 at 3:50 am 35
did anyone else see this morning on Global news the small island for sale off west van going for 10 million, down from original asking of 30 million?
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August 30th, 2010 at 4:00 am 36
@SuperSmartBull: I've asked you in the past and you've refused to respond, and once again you evade answering the question: "is your income directly related to the real estate business?"
I've stated repeatedly that mine is not, and I currently rent.
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August 30th, 2010 at 4:02 am 37
@domus: Of course that's the reality. It's more like a pyramid scheme, without new entrants, vast majority of move-up buyers cannot move without selling their current house first (they may try to rent it out, look out below). FTB sentiment and affordability will be key. If FTBs keep buying, the ripples will be felt up the chain, but if they decline, the same effects will be in play.
By many accounts, it is the high end market that is still showing any pulse, and the low end in many areas is sputtering. What do you numbers guys see?
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August 30th, 2010 at 4:07 am 38
I just found this. Not sure if anyone else has already posted this.
What a bear housing market looks like:
http://www.financialpost.com/news/business-inside…
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August 30th, 2010 at 4:11 am 39
@oneangryslav2:
No.
Jesse:
What a silly non-sensical statement. What does theoretical abstract notion like "infinite" have to do with talk about Van RE market in next few years? All you need is enough money to keep market going. You say it's all gone, run away like bear from conservation officer. I say it might not be. Lots of money and debt still slosh around looking for home.
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August 30th, 2010 at 4:40 am 40
Key fact is sales are not at zero level. Sales down yes but not zero. That means price stable not fall like bear fantasy. Inventory falling faster than sales bear. Housing start down too. What does this mean for mold snorting bear? It means the begining of VANCOUVER BOOOOOOOOOOOM 4.
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August 30th, 2010 at 4:49 am 41
Hey @Grampy tinfoil:
" We should do what they are doing in the Euro Zone and the US…cut the wages , benefits and number of parasites sucking off the taxpayer by 40%."
Wow for once we agree. Mind you our definition of "parasites" probably differ. Mine includes you and all of the rest of the money and health care draining elderly. You crusty old fuckers are like vampires, draining us of resources.
Seriously, what how do old people benefit from society? At least union people are working and doing *something*. Old people just sit around being old and complaining about everything (and Grampy, you're a prefect case in point).
I propose we take our queue from "Logan's Run". You hit 65, and it's off to fucking Carousel for you. It's lovely Grampy, you just disappear! No taxes to pay, no foreigners to hate, just blissful oblivion, and by that I mean your betters (which is everyone, really) get to watch you turned into dust, then go home, make a sandwich and feel great about life.
Here's a link. C'mon, it's not so bad grampy one minute you're here and the next you're a fine ash.
http://www.youtube.com/watch?v=xSnLU9nyFSA
God just think about the people we could finally be rid of: Grampy, Conrad Black, most of the CBC's audience. I'm getting all tingly just thinking about it.
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August 30th, 2010 at 4:52 am 42
Why do you guys keep engaging these empty 'super'-heads and their their throw-it-against-the-wall rationalizations? Crazies have infinite energy, you'll end up like that episode of Star Trek TOS in which the half-white, half-black face guys are locked in pointless battle for eternity. Don't choose white or black, choose red.
And SuperSmartBull sounds like a landlord to me, exactly like RET's Thompson in style and content.
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August 30th, 2010 at 4:56 am 43
"Why do you guys keep engaging these empty ’super’-heads"
I simply scroll on past. Don't stop and look for even a nano-second.
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August 30th, 2010 at 4:57 am 44
@rent-o-rama:
How does that constitute as news?
If I have a used car for sale originally priced at $30000
now priced at $10000, are they going to do a story on me
so I can get free publicity for my used car?
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August 30th, 2010 at 5:06 am 45
CBC radionews at 1pm reported "The mayor of Vancouver is worried about sales of Olympic Village condos. He says they are not selling fast enough and worries about another real estate slump."
Anybody have any current stats on these sales?
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August 30th, 2010 at 5:29 am 46
The writings on the wall for Calgary…no amount of bullshit can paint this pig pink again
http://www.calgaryherald.com/business/Calgary+hom…
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August 30th, 2010 at 5:48 am 47
@SuperSmartBull: "All you need is enough money to keep market going."
I don't think the massive # of FTBs who bought last year are going to re-appear if prices drop 10%. Four words: borrowing demand from future.
For a suped up example of what this means, look at the US. Ultra low rates, high inventory, low sales, and prices falling. Where are the buyers even with all the supposed money "sloshing" around looking for a "home"?
Not a bad time to sell right now. Just make sure you list your property in Chinese papers to lure all those rich Shanghainese coming over by the planeload.
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August 30th, 2010 at 5:56 am 48
@fixie guy: "exactly like RET’s Thompson"
Not exactly. Subtle differences. SSB may be trolling but actually has arguments and doesn't display pictures of a baboon's face as it's taking a dump like the infamous Thompson.
Actually, looking at what I just wrote, it doesn't make RET look very good at all.
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August 30th, 2010 at 5:57 am 49
Speaking of Calgary, the whole province of Alberta just got another kick in the nuts.
http://ca.news.yahoo.com/s/capress/100830/busines…
Meanwhile, back in the priciest place on earth, sales are absolutely anemic and the "days on market" is ballooning.
Remember earlier this month there was that horrible stench in the air all over Vancouver for a couple of days and the media blamed it on the farms out in the valley?
Turns out it was actually lower mainland REALTORS®, collectively shitting themselves.
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August 30th, 2010 at 6:18 am 50
@Bilbo Bloggins: Agreed, this is definitely not news but when did that ever stop Global? The interesting thing to me was that they were even talking about a negative housing story at all. I suppose they think if they only talk about a property that only 0.000000001% of the population can afford, nobody will get too concerned.
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August 30th, 2010 at 6:22 am 51
Pent up demand…
Remember that term from a few years back? This was the term that explained why all of a sudden everyone wanted to buy a condo in Vancouver and why people were lining up over night or days in advance to do so. I was walking around downtown last week and it finally dawned on me that this line was complete BS and I can’t believe I ever fell for it.
The argument was that there was a tonne of “pent up” demand for housing downtown, but not enough places for sale to meet this demand and that as soon as buildings started to pop up like mushrooms, all of this demand came to the forefront to buy, thus pushing prices up. The epiphany I had was that demand can’t be pent up…it’s either there, or it isn’t. If there was a lot of “pent up” demand back when there were few condos available downtown, it would have caused prices back then to skyrocket (more demand than supply) and that as soon as yaletown/coleharbour was built, this demand should have been satisfied and prices should have relaxed. Obviously we all know now that the exact opposite occurred.
I now realize that the Vancouver boom was more closely tied to the city winning the bid for the Olympics and, more importantly, the cheap credit that was increasingly becoming available. This fed the mania which became the Vancouver bubble. The pent up demand theory is just another example of Realtor BS in action.
It should be fairly obvious to everyone on this blog, and some people out in the city, that this market is cooked. There will be many other attempts by Reators to spin the facts to suit their argument, but don’t be fooled!
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August 30th, 2010 at 6:32 am 52
"I can’t believe I ever fell for it…"
What are your circumstances? Did you actually buy?
Just curious.
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August 30th, 2010 at 6:38 am 53
@Boombust:
No, I never bought, still haven't… but I was fooled by the spin and until late 2005 I was looking to get in. Now after renting, and being able to live such a good life, I don't think I will buy for some time now.
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August 30th, 2010 at 6:43 am 54
Listen crew, Stu here. Stu doesn't want to see another basement suite circle jerk here. They've been talking about pent up demand running out here for decades. Well, the ethnics keep storming the immigration office son. I think the crusties in Ottawa planned it that way. The ethnics don't like it there because it's too cold. I think the KKK is still active once you get past Port Coquitlam. Well, as always the best time to buy was yesterday.
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August 30th, 2010 at 6:56 am 55
http://www.calgaryherald.com/business/energy-reso…
Alberta is toast…..
The economy of this province runs on NG exploration and production and when the largest and most respected investment house says we're done….boys…..RE ain't coming back any time soon regardless of whatever any local realtor says……..
——————————————–
"Forget about investing in North American natural gas, FirstEnergy Capital Corp. said Monday.
Too much supply and not enough demand has made the resource – once the bread and butter of Alberta government coffers – a sinking ship, according to analyst Martin King.
"With this interim price forecast update we are effectively abandoning hope that any price recovery on the scale that we had been previously forecasting for late 2010 and 2011 will come to pass," he said in an early morning report.
The Calgary-based analyst slashed his 2011 natural-gas price forecast by a dollar to average $4.75 US per million British thermal units.
King also lowered his 2010 average price to $4.63 US per mmBtu, from $5 US.
North American markets have been flooded with shale gas volumes as producers stepped up drilling activity south of the border. Analysts attribute the fevered pace of activity to drill-to-keep lease requirements, as well as volumes being supported by dwindling hedging contracts inked at higher prices.
Prices in Canada will suffer from a widening spread between New York and Alberta trading hub AECO, with Alberta natural gas averaging $4.24 per thousand cubic feet, from a previous estimate of $5.38 per mcf.
"With a clear lack of any major negative impact on supply and rig counts from the past year of price activity, we are prompting avoidance of the North American natural gas investment space," King said in a Monday morning research note.
© Copyright (c) The Calgary Herald"
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August 30th, 2010 at 7:01 am 56
Unfortunately the recent decrease in 5yr fixed rates will increase sales and stop the price decline for another month or so. Don't be surprised to see an uptick in sales this week and next.
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August 30th, 2010 at 7:07 am 57
@VanCity Guy:
"No, I never bought, still haven’t… but I was fooled by the spin and until late 2005 I was looking to get in. Now after renting, and being able to live such a good life, I don’t think I will buy for some time now."
If you'd bought before 2005 and sold at the previous peak you'd have been able to live an even better life.
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August 30th, 2010 at 7:14 am 58
@Anoymous:
If you’d bought before 2005 and sold at the previous peak you’d have been able to live an even better life.
I always thought it was a shame I wasn't born as Forrest Gump – what a life… plus I would have obviously bought stock in a certain fruit company and gotten rich.
Oh well. big mistake there, I guess…
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August 30th, 2010 at 7:15 am 59
@realpaul:
But they certainly are trying to dress up that pig! The Herald completely ignored this outright lie spouted by Queen Realturd(TM):
'Diane Scott, president of the Calgary -Estate Board, said supply and demand is playing a role on current average prices but there's also the factor of luxury home sales. "Homes sold over $1 million are down in numbers from last year for the same period," she said. "June to August last year we had 98 sales over $1 million."'
Now from this they would have us believe that a fall in luxury home sales are putting downward pressure on the average price. However this ignores the fact that sales are down big across the board, roughly 40% from last year. And when you're looking at average prices then relative sales matter.
Sales of "luxury" $1 million homes make up a greater proportion of sales in 2010, and are actually putting upward bias on the prices. Mike Fotiou went through the numbers on his blog if anyone's interested.
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August 30th, 2010 at 7:18 am 60
@Anoymous: #57
Possibly, but timing these things is a complete crap shoot.
Also not having a mortgage to tie me down meant I could leave Vancouver and travel for extended periods of time… a luxury I took well advantage of!
Even if I could have timed the market perfectly, and was more interested with turning a condo into an investment… the type of property I was interested in would have only, at most, given me a 100k "wind fall." I use quotation marks because these 100K would not include my realtor costs, property tax or interest on the mortgage etc etc etc. By renting, I've been able to save about as much (even after my travel expenses).
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August 30th, 2010 at 7:20 am 61
@Anoymous:
"f you’d bought before 2005 and sold at the previous peak you’d have been able to live an even better life."
But if you have not sold yet, you are in for a crappy life of deflating house prices while your huge mortgage debt stays the same. What will it be? Bankruptcy or a rent it out and loose money every month?
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August 30th, 2010 at 7:23 am 62
@Anonymous: Any thoughts on why the median price dropped so much more than the average price?
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August 30th, 2010 at 7:25 am 63
@Anoymous: I'm not convinced. Please do the math, including all associated costs–realtor's commissions, etc.–and the forgone opportunity cost of a down payment, and compare to renting the whole time.
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August 30th, 2010 at 7:33 am 64
@900kCrackHouse: Well, while the median and the mean are both measures of central tendency, they are calculated differently. The mean is the mathematical average, while the median is the "middle" amount.
Example: 5 sales–500K, 500K, 750K (East Van bungalow!), 850K, 2000K.
The mean is 920K, while the median is the "middle" sale, or 750K. You'll find that the lower the total number of observations, the more (in general) the median and the mean diverge. Sometimes the median will be higher than the mean, other times it will be lower. It all depends on the mix of real estate being sold.
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August 30th, 2010 at 7:51 am 65
Realwhores in the UK are blaming 'a lack of first time buyers' and ' the deposit requirement' for killing the market. HUH !!!! Does that mean that you can only juice the market with stupid kids and zero down?????? Sounds a lot like the phony 'pent up demand' bullshit we heard here in Vancouver.
http://www.telegraph.co.uk/finance/newsbysector/c…
Now, if we could only figure out a way to jump start that 50 year mortgage program again…..ya, thats the ticket.
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August 30th, 2010 at 7:57 am 66
I was in Yaletown on Sunday. Ran across a gaggle of asians clustered around open house signs. I have no idea if they were wealthy and just flew in from China. I didn't really care, as I was spending my Sunday relaxing, doing some recreational woodworking at the Roundhouse, and going for a walk. Life as a renter is pretty difficult.
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August 30th, 2010 at 8:07 am 67
@900kCrackHouse: "Any thoughts on why the median price dropped so much more than the average price?"
A few large numbers pulled the average up. Likewise, when the median is above the mean, a few low numbers are pulling the average down. The median is generally more reliable, but it's easy to be mislead by one number. It's best to have the distribution.
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August 30th, 2010 at 8:11 am 68
@nonREgirl: CBC reports the Mayor of Vancouver pissed his pants. But it wasn't related to sales of Olympic Village condos, which are non-existent and threatening turn the city into Lehman Brothers. He just does that on a regular basis.
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August 30th, 2010 at 8:17 am 69
@rp1:
"CBC reports the Mayor of Vancouver pissed his pants."
He just found out how much it's going to cost to put in covered, heated bike lanes in time for winter.
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August 30th, 2010 at 9:03 am 70
Reality is the real estate slump, denial is the fantasy.
""It's either feed your kids or pay your mortgage," says Omayra Delgado, a 33-year-old special education teacher whose Miami house has slumped in value from $160,000 (£103,000) to $60,000. "My home is in foreclosure. I'm trying to keep it."
http://www.guardian.co.uk/business/2010/aug/30/us…
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August 30th, 2010 at 9:10 am 71
@The other Garth:
"I was in Yaletown on Sunday. Ran across a gaggle of asians clustered around open house signs. I have no idea if they were wealthy and just flew in from China. I didn’t really care, as I was spending my Sunday relaxing, doing some recreational woodworking at the Roundhouse, and going for a walk. Life as a renter is pretty difficult."
Ya, cos no homeowners had a relaxing weekend either. Jeeesh.
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August 30th, 2010 at 9:41 am 72
New Listings 191
Price Changes 116
Sold Listings 102
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August 30th, 2010 at 9:44 am 73
Singapore's property market continues to go on a tear, helped along by some 30% annualized GDP growth in the first half and a very high immigration rate that has brought in almost 150,000 people a year since 2005 (note, the city-state only has 5 million people and these immigrants are all vetted to a much stricter education and current-income criteria than those in Canada).
But the government doesn't have a reputation for economic management for nothing. Yesterday, they introduced measures to yet again rein in the property market, and the minister responsible spoke with a clarity that Canadian politicians sorely lack:
"If the current momentum in the market continues, what will likely happen is that a property bubble will form. And when the bubble bursts, and not if, but when the bubble bursts, there will be severe implications for individuals, as well as for the economy on the whole."
Not if, but when. Not it's different here because we're the second wealthiest country in the world, or we had 1 million tourists arrive in the month of July alone or any other exercises in cognitive dissonance that the Singaporeans could trot out if they wanted to.
But when.
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August 30th, 2010 at 9:49 am 74
Days elapsed so far 20
Days remaining 1
Average Sales this month 105
Average Listings this month 181
Projected Sales 2207
Projected New Listings 3803
Projected sell/list 58.0%
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August 30th, 2010 at 9:50 am 75
And my anecdote of the day, with no meaning attached whatsoever, is that I was at the Canadian embassy getting a passport for my son when a Chinese couple (mainland not Singaporean) asked the admin officer what they need to do to move to Canada because their daughter is studying there and they own three properties in Vancouver.
I really wanted to ask them how they bought three properties outside China despite that $50,000 annual cap on taking funds out of the country. I'm truly curious as to how this works.
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August 30th, 2010 at 9:51 am 76
VHB,
How do your stats compare MoM, and YoY?
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August 30th, 2010 at 9:52 am 77
I was in Harrison last week and it was a ghost town. One of the employees at the Harrison Hot Springs hotel said she thinks the recession is still on.
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August 30th, 2010 at 9:52 am 78
"…and they own three properties in Vancouver."
Maybe it's that huzbah or his wife we saw on the News.
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August 30th, 2010 at 9:53 am 79
@chip:
At least Singapore actually does have a lack of land.
It's 1/4 the size of greater Vancouver with more than twice as many people – 9 times the density.
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August 30th, 2010 at 9:57 am 80
@chip: But isn't Singapore the antithesis to the government-free libertarian utopia that you and your co-ideologues revere?
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August 30th, 2010 at 10:53 am 81
"One of the employees at the Harrison Hot Springs hotel said she thinks the recession is still on."
Well, I think she's got that right. It was never really "off".
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August 30th, 2010 at 11:06 am 82
@oneangryslav2:
Government-free isn't the same as limited government, which is the practice of the Singapore govt when it comes to the economy. Singapore has the second freest economy in the world. It took me two days to incorporate a new business here, all online. My first year tax rate on income up to S$100,000 is zero in the first three years, and only 8.5% on the remaining amount up to S$300,000.
My personal tax return is one page.
Singapore is constrained politically with limits on the media that you won't see in Canada. That is partly due to the newness of the country and partly due to the nature of its neighbourhood. Whereas Canada shares the world's longest undefended border with the world's biggest economy, Singapore has the sometimes hostile Indonesia and Malaysia and their associated religious tensions. Singaporeans are also a mostly a culturally conservative people so they believe the price they pay for political stability here is preferable to the price that the Thais and Filipinos pay for their young, free-wheeling democracies. When they no longer want to pay that price they will vote the government out because they do have elections.
Personally, I feel freer here. I have never been contacted by the government whereas in Canada the CRA badgers me with demands, many of which were resolved ages ago but they keep losing the paperwork. I have never filed a police report whereas in Canada petty and not so petty crime is always an issue. When I enter Singapore the customs official invariably says Welcome Back to Singapore, Mr XX, whereas in Canada I'm always asked many useless questions about my business, family etc.
And I keep most of what I earn, whereas in Canada half of it is taken and presumably pored down a big gaping hole somewhere near Ottawa.
In sum, Singapore has fewer laws and regulations but very stiff penalties. Operate within those limits and you are very free. Canada has many laws and regulations which, though not overly punitive, together smother one's liberty to a significant extent.
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August 30th, 2010 at 11:28 am 83
@chip:
All your points regarding Singapore are spot on, BUT, can you go golfing, sailing and skiing there all in the same day?
Because to some of our local mouth breathers that seems to be a critical selling point when trying to pass Vancouver off as the best place on earth.
You know, the kind of stuff the average person cares about.
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August 30th, 2010 at 11:31 am 84
@Boombust:
August Units 1994-2009
1994 = 2159 = 44%
1995 = 2326 = 47%
1996 = 2141 = 48%
1997 = 2096 = 55%
1998 = 1589 = 49%
1999 = 2002 = 59%
2000 = 1805 = 51%
2001 = 2659 = 77%
2002 = 2558 = 73%
2003 = 3413 = 88%
2004 = 2570 = 61%
2005 = 3800 = 82%
2006 = 3092 = 65%
2007 = 3493 = 75%
2008 = 1611 = 35%
2009 = 3496 = 74%
2010 = ???? = ??%
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August 30th, 2010 at 11:39 am 85
The brokerages – including Century 21, Royal LePage and ReMax – will meet Tuesday to try and agree to an alternative listings site that would pool their offerings. The meeting comes a day after Yahoo Canada announced it will offer listings on its main search page using database and real-time search technology from Toronto-based Zoocasa.com.
Big-name realtors plot rival listings site
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August 30th, 2010 at 12:23 pm 86
The brokerages – including Century 21, Royal LePage and ReMax – will meet Tuesday to try and agree to an alternative listings site that would pool their offerings. The meeting comes a day after Yahoo Canada announced it will offer listings on its main search page using database and real-time search technology from Toronto-based Zoocasa.com.
In related news, Rotary dial telephone makers team up with wagon wheel companies to fight what they are calling "absurd claims of fantasy" that their businesses are in decline due to technological change. President of the new association called REALTOR for short, claims that business is better than ever. Only 0.05% of the world has made a rotary dial telephone call so the future growth is endless!
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August 30th, 2010 at 12:30 pm 87
That Guardian article says the D.P. requirement in the UK was increased from 10% to 25%. It would be nice to have the same in Canada. That would definitely kill prices. I remember before the latest mortgage rules were introduced there was quite a bit of speculation in the media as to what the changes would be. The possibility of an increase in the DP requirement from 5% to 10% was met with great consternation by the RE industry as you can imagine. I recall reading the opinion that an increase to 10% would cause a "crash". 10 percent!! That is how leveraged this market is. I would love for it to go back to 25% but I think we all know Harper government will never do it: a) He has no balls, and b) Harper is all about pandering to homeowner families (everyone else can eff themselves).
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August 30th, 2010 at 12:35 pm 88
@SamanthaD: I'm sure real "ellites" (elites) such as yourself should be able to spell "layers" (lairs) and use proper grammar.
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August 30th, 2010 at 12:54 pm 89
@Best place on meth:
You can golf, sail and water ski on the same day. But more importantly, you can finish work on a Friday and within a few hours be having a drink in Bali or Phuket for the same price that Air Canada charges for a one-way flight from Vancouver to Nanaimo.
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August 30th, 2010 at 12:56 pm 90
It seems that at least one developer is getting out while the getting is good, however his greed may be getting the better of him.
http://www.realtor.ca/propertyDetails.aspx?proper…
Looks like he bought the lot last September for $600k, spent $15K on soft costs, and now wants $830K.
Is this a desperate hail mary at the end of the boom, or a valid business model?
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August 30th, 2010 at 1:12 pm 91
@Anonymous: #87
Harper does have balls but they're in his mouth and belong to someone else.
Looks like it's open season on realtards and boy are they pissed.
http://www.theglobeandmail.com/report-on-business…
Go propertyguys.com, wipe those douchebags off the face of the earth.
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August 30th, 2010 at 1:15 pm 92
Some red meat for fecalpaul:
http://news.yahoo.com/s/ap/20100831/ap_on_re_us/u…
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August 30th, 2010 at 3:11 pm 93
PIIGS squeal
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August 30th, 2010 at 3:15 pm 94
Is Canada really different? 2 links:
Why Canada's housing market may be heading for a correction
http://www.theglobeandmail.com/report-on-business…
Is Canada in a housing bubble?
http://www.theglobeandmail.com/report-on-business…
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