A Tale of Two Cities
Average Vancouver detached prices to the moon! Check out Larry Yatkowsky’s graph.
Alas all is not well in BC. The Vancouver Sun shows a few Okanagan MLS listings, highlighting what a cool 550,000 smackeroonies gets you, compared to the EastVan McGill Speedway placeholder (pictured below). Kelowna has been experiencing a significant inventory glut over the past year and prices are starting to fall:
While Metro Vancouver’s home prices continue to rise, prices in the Okanagans have experienced a significant slide, local realtors said Monday.
One local agent says vacation properties are “feeling the pinch,” as buyers focus on their home markets during the economic turmoil in the past few years.
So the euphemism du jour is “pinch”. Not exactly the best of times up there. Let’s look at a couple of these “vacation” properties. What’s the difference between a vacation property and a principal residence exactly?
2919 MCGILL ST Vancouver
545 San Cabrio Court, Kelowna area
965 Monashee Place, Kelowna
Ah but location is everything you say. Meh, I’ll use these props as a baseline and revisit what $550K buys in our Two Cities later on this year.
February 1st, 2011 at 6:09 pm 1
I note that, in the comments section, Larry Yatkowsky says that 21 properties sold for more than $10 million each. I wonder how much that affected the average?
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February 1st, 2011 at 7:21 pm 2
@Whisperer: You don't have to wonder; there's this thing called mathematics that will help you arrive at the answer.
From Larry's data: 793 detached homes sold in January at an average price of $1,144,537. Thus, the total value of homes sold was 793*1,144,537=907,617,841. Let's assume that the 21 properties sold for more than $10 million, sold at exactly $10 million each (to provide an estimate of the minimal dollar amount that these properties skewed the averages upward). Thus, we take 21*10000000-$210,000,000 off the total sold value. (As an aside, these homes accounted for at least 23% of the total value of real estate sold!!
So, taking the number and dollar value of these sales away from the total we get 772 detached homes sold for a total value of $697 617 841. So the average comes out to about 900,000. So these 21 sales (or 2.6% of the total) increased the average by almost one-quarter of a million dollars, or 26.5%.
Anybody who thinks that the mix of homes isn't important when trying to compare average prices is an idiot. Compare benchmarks.
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February 2nd, 2011 at 12:09 am 3
Still, 21 houses selling for over ten million is not generally a sign of a weak market. When fundamentals do kick in we won't need to use calculators to figure it out.
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February 2nd, 2011 at 12:20 am 4
China Is Poised to Raise Rates Again, Bankers Say
http://tinyurl.com/bearishChinesenews
from the NYT
"Inflation lately has caused friction in China’s mighty export machine. Now, Beijing’s efforts to fight inflation, through higher interest rates and tighter restrictions on bank loans, could begin to slow segments of China’s domestic economy slightly — particularly the breakneck pace of investment in new factories, office buildings and apartment complexes.
That, in turn, could weaken demand for industrial materials like steel and copper that depend heavily on Chinese purchases."
good news for Canada?
methinks not………
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February 2nd, 2011 at 12:26 am 5
Here are some inventory counts for February 1st. These are numbers I noted from realtylink.org over the past few years. There are some holes in the data, so I hope this formats well.
Area 06 07 08 09 10 11
DT-FN condos 354 509 475 790 ?? 546
CH condos 69 109 112 207 ?? 159
VW detached 358 335 331 ?? ?? 374
BU detached ?? ?? 294 440 ?? 233
NW detached ?? 73 61 96 ?? 82
Some comments:
1) Despite reports to the contrary, VW detached listings are healthy–more than typical at this time of year. Nowhere near levels of 2009 yet of course, but no shortage either.
2) CH condos, DT-FN condos, and NW detached are pretty heavy on the inventory. Why?
3) BU is light on inventory. My VE numbers (not shown–only a couple years of data) also look like pretty light inventory. Why is BU and VE hot?
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February 2nd, 2011 at 12:29 am 6
Victoria average prices took a hammering.
I agree, I think its sales mix, if normalized (adjusted), other than Richmond/Westside, me thinks things are flatlining at best, and beggining to weaken is actually what I think we are seeing.
As the new mortgage rules hit (in a few months (again, anyone for sure know if the deal has to be done, or just the mtg pre-approved, as this will lengthen the time to impact)) and then the higher expected interest rates (anyone smell inflation), I can't see the jugernaut continue…then again, I thought this long ago as well….
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February 2nd, 2011 at 12:30 am 7
@VHB: My VW detached comment (1) is better interpreted if you could see the 2009 and 2010 numbers. For 2009, the first data point I have is 694 for February 15th. We are far behind pace to hit that. For 2010, the first data point I have for VW is 391 on February 7th. I bet we will surpass that for 2011.
Inventory growth, aside from some oddities like VE and BU, is strong.
Again, all this is from public MLS listings. These numbers are not official. I don't have any special paulb-esque access to the fancy realtor database.
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February 2nd, 2011 at 12:36 am 8
#2 oneangryslav2 Says: "Anybody who thinks that the mix of homes isn’t important when trying to compare average prices is an idiot."
Can't speak for Yatter specifically but the benchmark appears to have been downplayed by the industry in general ever since it stopped delivering the right message. "Vancouver benchmark up 4.6% year over year" doesn't have the same bam-biff-pow appeal as "average to the moon!"
For good reason. Economists like Thornberg in the US predicted that when activity at the low end slows or stops, the end has begun. Average hides that.
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February 2nd, 2011 at 12:39 am 9
@VHB: Allow me one more. VW detached peaked out at 1010 in late September 2008 according to my records. That is when we saw substantial price drops.
For DT-FN condos, we peaked out at 1142 on June 25, 2010, far surpassing the 2008 peak. We didn't see great price drops because inventory fell back over the summer.
If you want a target number to keep in mind, how about this: When we see sustained 1000+ inventory for SFH in VW detached or DT-FN condos, we will see substantial price drops in those categories.
Inventory is growing, but there is a LONG hill to climb before we get to those levels. Of course, that's why we enjoy the inventory parties so much–these are important mileposts on the way to where things need to go if there are to be price drops.
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February 2nd, 2011 at 12:39 am 10
http://www.news1130.com/news/local/article/177911…
"City council considering five skyscrapers downtown"
So would one consider this as bear or bull news? More units means more glut to inventory. On the other hand, more construction workers employed to continue the ponzi scheme.
(Granted, if this moves forward, we may be quite a few year away from digging the first hole in the ground)
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February 2nd, 2011 at 12:42 am 11
Here is the residential aggregate over the past 13 months.
Dec-09 237.56
Jan-10 242.12
Feb-10 245.78
Mar-10 246.84
Apr-10 250.64
May-10 249.47
Jun-10 245.07
Jul-10 243.73
Aug-10 243.53
Sep-10 243.78
Oct-10 244.7
Nov-10 245
Dec-10 244.04
So, if we see a drop of more than 1.92 points, we'll be at negative y-o-y prices.
I actually expect a small increase in the benchmark this month since January is a month with lots of impatient buyers, but it should be within a hair of 0 +/- given the 6.0 inventory level.
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February 2nd, 2011 at 1:00 am 12
Based on Larry's graph, what do y'all think the likelihood of a head and shoulders formation on price is?
The top today is so much higher than 2008, that there's the possibility of a bear trap in 2013 if there's a head and shoulders pattern. Thing is, the catch & rise in 2008 wasn't initially just market sentiment but gov't policy.
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February 2nd, 2011 at 1:02 am 13
The 5-yr is getting above 2.60 now. link.
Who knows where it would go. But it's funny how even say a 50 bps increase in mortgage rates would have pumpers peeing their pants. Gee, must be a solid foundation for the 'boom' here, eh?
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February 2nd, 2011 at 1:05 am 14
@Whisperer:
To me it's all about perception:
Imagine the kind of stories that spreads in the real estate community with those 21 sales in one month (realtor to realtor to client…). Then the average comes out inflated by some $250,000 (thanks oneangryslav2!) and goes to confirm the tales of wealthy buyers, spring market taking off again, etc. and the fantasy rolls on. Advice that potential buyers and sellers (making up the market) will get from realtors will be heavily influenced by these stats as a way to justify why prices being so far out of proportion to incomes is normal in Vancouver and how it is different here.
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February 2nd, 2011 at 1:09 am 15
@N:
That doesn't say much.
What were those properties worth 3 years ago? 15mil?
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February 2nd, 2011 at 1:11 am 16
It's funny how every article the references any price weakness (eg. Kelowna, Whistler, remote BC waterfront)…the article always ends on a similar note:
"Connerty added, however, that most industry experts expect prices to rebound from the buyers' market condition."
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February 2nd, 2011 at 1:22 am 17
@oneangryslav2:
Thanks for doing the math on that.
I was immediately suspicious of Larry's numbers and that's why I asked him how many 10M+ sales there were in January and he confirmed my suspicions. A hell of a lot more than is normal.
That's why the average is useless and will be down sharply next month.
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February 2nd, 2011 at 1:45 am 18
@VHB: Hi VHB, if you'd like some advice on formatting your numbers, I use dots (…..) to format– they won't get lost in the HTML formatting. You do have to adjust a little with the previous window (silly variable-width fonts!), but it works…
For example, renumbering your inventory list shows the chart a little more legibly:
Area…………… 06… 07… 08… 09… 10… 11
DT-FN condos. 354. 509. 475. 790. ??… 546
CH condos……. 69.. 109. 112. 207. ??… 159
VW detached.. 358.. 335. 331. ??… ??… 374
BU detached… ??… ??… 294. 440. ??… 233
NW detached… ??… 73… 61… 96… ??… 82
And as always, thanks for posting your commentary and analysis!
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February 2nd, 2011 at 1:57 am 19
@Best place on meth:
"That’s why the average is useless and will be down sharply next month."
Good point. The average is so meaningless. If there is not another 20 $10M+ sales in Feb, the M-O-M average will look real ugly comparing Jan and Feb 2011. (Let's bring on more $30 per diem bus load of Chinese investors)
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February 2nd, 2011 at 2:06 am 20
@Best place on meth:
Good catch meth. I saw the numbers and freaked out completely (end of the world – whats going on). Then I read the comments section and found your Q with Larry A: 21. HA. What a joke!
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February 2nd, 2011 at 2:07 am 21
@Best place on meth:
Good catch meth. I saw the numbers and freaked out completely (end of the world – whats going on). Then I read the comments section and found your Q with Larry A: 21. HA. What a joke!
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February 2nd, 2011 at 2:53 am 22
"Meh, I’ll use these props as a baseline and revisit what $550K buys in our Two Cities later on this year."
Are they an unbiased pair of properties, or has the Vancouver Sun deliberately picked the best of Kelowna to compare with the worst of Vancouver for the sake of journalism?
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February 2nd, 2011 at 3:02 am 23
Can someone explain to me why Richmond and Van westside is so strong?
After you say rich asians can someone explain AGAIN why rich asians don't affect price?
Get your heads out of your arse's. I don't know how long it will last but please, please go to an open house in Mckenzie Heights this week/wknd and count the white people on one hand … and bring a hand held counter for the asians – you'll need it.
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February 2nd, 2011 at 3:03 am 24
Does anyone know how many homes in the $10 million range normally sell in a month or year? It seems like a very high number for a short period.
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February 2nd, 2011 at 3:08 am 25
@Junius:
Yatter said there was 1 sale last month and zero the month before.
That makes the 21 in January a severe anomaly and his theory is Chinese buying for New Years.
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February 2nd, 2011 at 3:25 am 26
#25 Best Place on Meth,
Thanks. I have not been to Yatters site.
So a complete statistic anomaly drives up stats at the high end. How is this a hard trend? Classic abuse of statistics.
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February 2nd, 2011 at 3:29 am 27
#19 specialfx3000,
Good point. When the Feb stats come in Prices will almost certaintly be down, partially as a result of these 20 sales. Only then will the pumpers call these 20 sales an outlier event. In the meantime, prices only go up.
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February 2nd, 2011 at 3:50 am 28
Hmmmm…..
21 ten million dollar homes all sold just before the Chinese New Year in a traditionally weak month….
Hmmmm……
An acknowledgment from realtors that this is not the norm…..
Hmmmm……
I wonder whether rich asians impact prices in Vancouver?
I wonder if their sales impact average prices, and hence the RE industry's ability to further pump RE?
Hmmmm…..
And twenty one 10 million dollar homes – that sure is a lot of chinese relatives each contributing 50k in accordance with Chinese capital control laws eh?
So that makes 4200 chinese, each contributing 50k, to buy those houses right?
Hmmmm…..
Good thing that no one is laundering their dirty Chinese "business" proceeds here – whew!
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February 2nd, 2011 at 4:03 am 29
My VOW has really been popping. As many new listings in the last 24 hours as the entire previous week. Anyone else seeing this?
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February 2nd, 2011 at 4:05 am 30
@VHB:
I'm seeing it too – that's insane!
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February 2nd, 2011 at 4:34 am 31
@Anonymouse:
"Are they an unbiased pair of properties, or has the Vancouver Sun deliberately picked the best of Kelowna to compare with the worst of Vancouver for the sake of journalism?"
Genuine question. Why am I getting voted down?
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February 2nd, 2011 at 4:39 am 32
@VHB:
What's VOW?
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February 2nd, 2011 at 4:43 am 33
@Anonymouse:
“Are they an unbiased pair of properties, or has the Vancouver Sun deliberately picked the best of Kelowna to compare with the worst of Vancouver for the sake of journalism?”
Genuine question. Why am I getting voted down?
Genuine answer: Yes, and no.
Want proof? Do the research yourself.
http://www.mls.ca
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February 2nd, 2011 at 4:54 am 34
@Jimbo: http://en.wikipedia.org/wiki/Virtual_Office_Websi…
Sign up with your Realtor of choice.
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February 2nd, 2011 at 4:55 am 35
Oh… okay, thanks for explaining. =)
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February 2nd, 2011 at 4:58 am 36
@ VHB
Feb 2 12:56p
492 New
84 Price Changes
288 Sold
Looks like both the sales and listings are popping!
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February 2nd, 2011 at 4:59 am 37
@Anonymouse: $550K is the worst of Vancouver. In all of Vancouver, there are only 7 houses on land worth less than $550K. All 7 look pretty dumpy to me.
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February 2nd, 2011 at 5:00 am 38
@ VHB
Feb 2 12:56p
492 New
84 Price Changes
288 Sold
Sorry that was yesterday and today- here's just today
138 New
28 Price Changes
83 Sold
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February 2nd, 2011 at 5:05 am 39
@ VHB
Feb 2 1;05p
139 New
28 Price Changes
86 Sold
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February 2nd, 2011 at 5:12 am 40
@VHB: #34
I like this:
"The National Association of Realtors, which created the VOW policy, is under an ongoing antitrust investigation by the U.S. Department of Justice, which deemed the VOW policy as anti-competitive."
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February 2nd, 2011 at 5:56 am 41
Fraser Valley stats out for January…lookin might bearish.
http://www.fvreb.bc.ca/statistics/Package%2020110…
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February 2nd, 2011 at 6:01 am 42
Vancouver Island stats out as well.
Alberni, Cowichan Valley, and Nanaimo took a beating!
http://www.vireb.com/assets/images/pdf/01-jan_11_…
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February 2nd, 2011 at 6:06 am 43
A great article about the Irish Housing Collapse. It sounds painfully familiar. Comming soon to a Rich Asian market near you.
The statement struck him as absurd: real-estate bubbles never end with soft landings. A bubble is inflated by nothing firmer than expectations. The moment people cease to believe that house prices will rise forever, they will notice what a terrible long-term investment real estate has become and flee the market, and the market will crash. It was in the nature of real-estate booms to end with crashes—just as it was perhaps in Morgan Kelly’s nature to assume that, if his former students were cast on Irish TV as financial experts, something was amiss. “I just started Googling things,” he says.
Googling things, Kelly learned that more than a fifth of the Irish workforce was employed building houses. The Irish construction industry had swollen to become nearly a quarter of the country’s G.D.P.—compared with less than 10 percent in a normal economy—and Ireland was building half as many new houses a year as the United Kingdom, which had almost 15 times as many people to house. He learned that since 1994 the average price for a Dublin home had risen more than 500 percent. In parts of the city, rents had fallen to less than 1 percent of the purchase price—that is, you could rent a million-dollar home for less than $833 a month. The investment returns on Irish land were ridiculously low: it made no sense for capital to flow into Ireland to develop more of it. Irish home prices implied an economic growth rate that would leave Ireland, in 25 years, three times as rich as the United States. (“A price/earning ratio above Google’s,” as Kelly put it.) Where would this growth come from? Since 2000, Irish exports had stalled, and the economy had been consumed with building houses and offices and hotels. “Competitiveness didn’t matter,” says Kelly. “From now on we were going to get rich building houses for each other.”
The endless flow of cheap foreign money had teased a new trait out of a nation. “We are sort of a hard, pessimistic people,” says Kelly. “We don’t look on the bright side.” Yet, since the year 2000, a lot of people had behaved as if each day would be sunnier than the last. The Irish had discovered optimism.
Their real-estate boom had the flavor of a family lie: it was sustainable so long as it went unquestioned, and it went unquestioned so long as it appeared sustainable. After all, once the value of Irish real estate came untethered from rents there was no value for it that couldn’t be justified. The 35 million euros Irish entrepreneur Denis O’Brien paid for an impressive manor house on Dublin’s Shrewsbury Road sounded like a lot until a trust controlled by the real-estate developer Sean Dunne’s wife reportedly paid 58 million euros for a 4,000-square-foot fixer-upper just down the street. But the minute you compared the rise in prices to real-estate booms elsewhere and at other times, you re-anchored the conversation; you biffed the narrative. The comparisons that sprung to Morgan Kelly’s mind were with the housing bubbles in the Netherlands in the 1970s and Finland in the 1980s, but it almost didn’t matter which examples he picked: the mere idea that Ireland was not sui generis was the panic-making thought. “There is an iron law of house prices,” he wrote. “The more house prices rise relative to income and rents, the more they subsequently fall.”
Read More http://www.vanityfair.com/business/features/2011/…
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February 2nd, 2011 at 6:07 am 44
Fear not, benchmark prices are still being referenced as in this article for Richmond and Vancouver West – the 2 hottest markets right now.
http://www.vancouversun.com/business/Region+housi…
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February 2nd, 2011 at 6:12 am 45
@IT__Pro:
Prices falling across the board in the Fraser Valley.
The spin made me laugh though:
"INCREASE IN LISTINGS ADVANTAGEOUS FOR
FRASER VALLEY BUYERS"
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February 2nd, 2011 at 6:17 am 46
@IT__Pro:
Must be a typo on pg. 9 Sales to Active Listings ratio: 11%
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February 2nd, 2011 at 6:37 am 47
@joycer:
It's correct and implies an MOI of 9.1
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February 2nd, 2011 at 6:38 am 48
Even though many good points have been made on this blog about how the Vancouver housing market is playing itself out; one particular question I have is what kind of social engineering is the Province & Vancouver's city council creating that directly drives this overblown real estate bubble.
Are they forcing the buyers of single family homes to get tenants in order to afford their mortgage and consequently solving their affordable housing issue? I have a neighbor that leases his 15×15 utility 'shed' to a single male with some mental issues. He doesn't have to collect the rent from the individual, he gets the money deposited directly from the Provincial authority.
Is the Fed & Provinces trying to avoid a future problem with CPP liabilities by propping up the value of homes so that the bulk of retirees that has just reached the age of 65 this year will be able to sell out and move somewhere cheaper so that they are not completely dependent on CPP for their survival. Unless you have a nice company or Govt pension which apparently is only about 35% of the population.
And finally, doesn't this really amount to a huge hidden tax burden on the younger generation of working families?
Will we be facing a Cairo style protest in the near future if this information is ever proven true?
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February 2nd, 2011 at 6:49 am 49
RE: End of the Vancouver Sun Article:
"Connerty added, however, that most industry experts expect prices to rebound from the buyers' market condition"
…no rhyme or reasoning, just that industry experts aka realtors have a good feeling that the buyers market will soon end
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February 2nd, 2011 at 7:11 am 50
@bigbadbear1:
Those are not industry experts, they are industry cheerleaders.
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February 2nd, 2011 at 7:18 am 51
New Listings 212
Price Changes 40
Sold Listings 110
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February 2nd, 2011 at 7:25 am 52
RE: End of the Vancouver Sun Article:
“Connerty added, however, that most industry experts expect prices to rebound from the buyers’ market condition”
@bigbadbear1:
Yes, that is true, pumpers would say they expect price to rebound, they said that in the USA, because everyone wanted to live there, they were running out land, rich baby boomers seeking better weather, and the rich Asians of course.
In fact a while back when the rich Asian thing became too stale, the pumpers were starting to pump / hype the rich Albertans and rich Germans.
Tick tock , tick tock
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February 2nd, 2011 at 7:33 am 53
The benchmark price of local residential real estate rose by 0.7 percent over the past three months, according to January 2011 statistics released today (February 2) by the Real Estate Board of Greater Vancouver.
http://www.straight.com/article-371150/vancouver/…
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February 2nd, 2011 at 7:41 am 54
Stats are up.
http://www.mikestewart.ca/blog/
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February 2nd, 2011 at 8:19 am 55
Here's an attempted flip:
4842 Victory Street Burnaby MLS #V861597 Sold Sep22/2010 for $655,000 now listed for $888,000. House is a teardown or in need of major renovation. Was an estate sale originally in 2010 I think.
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February 2nd, 2011 at 8:22 am 56
There is clearly an error in the average price is it includes 10 sales > 10 million.
In all of vancouver (including west van) there are a total of 17 listings > 10 million.
I doubt very much, that 10 sold in one month.
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February 2nd, 2011 at 8:32 am 57
@Recall_Them_All:
Nobody is "forcing" buyers to do anything because nobody has to buy in the first place.
Like in all bubbles, the buyers themselves (along with the Federal government which is financing them) are responsible for excessive prices and the buyers themselves are creating the "affordable housing issue", which is in fact a non-issue because real rents have been falling over the last decades.
Don't want to have a problem with high house prices? Don't buy. Try it, you might like it.
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February 2nd, 2011 at 8:47 am 58
@space889:
How profound. Since every property sold has one buyer and one seller, there is always the same number of buyers and sellers.
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February 2nd, 2011 at 9:12 am 59
@van coffee:
:There is clearly an error in the average price is it includes 10 sales > 10 million.
In all of vancouver (including west van) there are a total of 17 listings > 10 million.
I doubt very much, that 10 sold in one month.
"
That's a very good point, and to clarify Larry claims it was 21 over $10million homes sold in January. I too just checked MLS and for the entire lower mainland has 21 homes over $10million. There is something VERY wrong with the numbers. Either there was a mistake or someone is cooking the numbers. Seems someone made a mistake.
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February 2nd, 2011 at 9:38 am 60
@patriotz:
"Since every property sold has one buyer and one seller, there is always the same number of buyers and sellers."
If somebody is trying to buy or sell you'd still call them a buyer or seller before they've completed any transaction.
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February 2nd, 2011 at 9:57 am 61
New Listings 267
Price Changes 56
Sold Listings 147
11196
Re: the 10M house sales. My buddy just told me he can see only one >10M sale which rang in at 13M, then a couple about 6M and a few more about 5M.
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February 2nd, 2011 at 10:05 am 62
@Anonymouse:
As I and others have said before, someone who is actually trying to buy or sell is someone who is willing to pay or accept the market price (respectively), and the size of each group is always the same.
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February 2nd, 2011 at 10:26 am 63
———–MACHINE GUN FIRE———–
http://english.aljazeera.net/watch_now/
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February 2nd, 2011 at 10:34 am 64
Regarding the Ponzi scheme:
My friend Stan sat down today, with an anxiety attack: he is about to buy a 1 bdrm condo (pre-sale) for $350 000. He is single and close to retirement, so he is balancing if he will be able to pay the mortgage in 10 years. I tried to put the numbers down with him. He said:" My real estate agent is very different from you. He is VERY pushy. He told me: you are NOT buying a dwelling, you are getting hold on an INVESTMENT for 5 years, until you can find the next SUCKER to sell it to, at an inflated price." So I asked Stan: "What does that make YOU? The previous sucker?" That anecdote is telling me a lot about the spirit in this city.
Regarding Asian buyers:
I do not know the real numbers, but realtors on UBC campus buy the story of hot Asian money. Open houses are staged "Asian" style. Realtors are often Asian. The Asian population on campus has increased several folds in the past 4 years. For example, at the Old Barn Community Center, you are welcome by an agent speaking Mandarin, and some classes have 100% Asian kids (e.g. the choir). The program is geared toward the Asian populations (drawing courses in Mandarin, Kung Fu, Tai Chi, etc). U Hill secondary population is changing too. Realtors websites are in English/Mandarin/Korean. It might be an epiphenomenon though.
Nevertheless, realtors are feeding the beast of racism.
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February 2nd, 2011 at 10:47 am 65
Ah yes Mike Stewart. Didn't you used to work in film Mike? How'd that work out?
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February 2nd, 2011 at 10:57 am 66
Fascinating daily numbers! Here are my projections for month-end of February. I switched to a 5-day moving average for the projections–yesterday I tried a 20 day MA but it wasn't picking up the end-of January increase in sales levels quickly enough and so was giving us a bad projection. I think the 5 day MA does a good job of giving us a solid basis for projections.
What I do here is to use the 5 day average and variance to project what happens for the remaining days of the month. I add this to what has already happened this month to get the projected end-of-month total. As the month progresses, the 'known' portion of this total grows and the 'unknown' portion diminishes, meaning that the +/range will decrease as the month nears its end.
February 2011 month-end projections
Days elapsed so far 2
Days remaining 18
5 Day Moving Average: Sales 148
5 Day Moving Average: Listings 282
SALES
Sales so far 357
Projection for rest of month 2657
Projected month end total 3014 +/- 619
NEW LISTINGS
Listings so far 617
Projection for rest of month 5076
Projected month end total 5693 +/- 658
Sell-list so far 57.9%
Projected month-end sell-list 52.9%
MONTHS OF INVENTORY
Inventory as of February 2, 2011 11196
MoI at this sales pace 3.71
We are on pace for a 3000 sale month–a level we reached a couple of times in the super hot years. That's a hot sales month, at least what it looks like so far. If you get 150 sales a day, that gives you 3000 for the 20day month. We've done that and more the first 2 days of the month.
For listings, however, we are blowing everything off the map. The previous high was 5260 in 2008. We are on pace for 5693. So, we are not on pace for a hot listings month, but a SUPER hot listings month.
What matters for prices is how many buyers there are for available inventory. If listings continue to outpace sales–even if sales are elevated–then inventory will grow.
If we get 5500+ listings this month, then it is clear the rush to the exit is on. If we get 3000+ sales, all that means is that 3000+ suckers didn't notice the music stopped.
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February 2nd, 2011 at 11:31 am 67
@VHB:
The sales won't continue past March 18, this listings will.
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February 2nd, 2011 at 11:33 am 68
Disillusion Row, Numbers 1-12
http://wp.me/pcq1o-1MS
Twelve anecdotes from a single recent thread at vancouvercondo.info, archived as a record of some of the sentiment being expressed at this juncture.
Our housing bubble is at the very least profoundly distracting. Worse, it is scaring away human capital and putting our local economy at risk of implosion.
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February 2nd, 2011 at 12:02 pm 69
I updated my year over year change in house price graph based on the latest Vancouver Board's HPI index numbers. It's still on the same downward linear trend line.
http://worldhousingbubble.blogspot.com/2011/02/va…
I still predict 653k for the HPI detached by December, barring the government freaking out and doing something extremely short-sighted.
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February 2nd, 2011 at 12:46 pm 70
@VHB:
VHB… "If we get 5500+ listings this month, then it is clear the rush to the exit is on. If we get 3000+ sales, all that means is that 3000+ suckers didn’t notice the music stopped."
It wouldn't mean that at all. It would mean that we are on the high side of a balanced market.
There is no 'rush to the exits'. If there was such a thing, it would have already happened two years ago. If people had to bail, they would have most likely done it then. The buyers in the past two years are well aware that they purchased after a correction. I would hardly expect many speculators to be in that bunch.
I think we are going to have high listings for a few months. We had a slow summer in 2010 and a lot of those people are probably going to list early this year. Coincidently, the new mortgage rules will cause some of that extra inventory to get taken up as buyers rush to beat the deadline.
Anyways, I think we are right on track for some serious bear capitulation this year.
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February 2nd, 2011 at 1:01 pm 71
"Anyways, I think we are right on track for some serious bear capitulation this year."
What an idiotic thing to say. Based on what?
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February 2nd, 2011 at 1:01 pm 72
@Dave: You're kidding. Right?
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February 2nd, 2011 at 1:17 pm 73
@van coffee:
"There is clearly an error in the average price is it includes 10 sales > 10 million.
In all of vancouver (including west van) there are a total of 17 listings > 10 million.
I doubt very much, that 10 sold in one month."
What do you mean? Aren't all these millionaires rushing to beat the March 17th deadline? After all the CMHC guarantees and subsidizes their mortgages too!
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February 2nd, 2011 at 1:30 pm 74
@Boombust:
Reality. At some point you have to stop believing in Santa Claus.
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February 2nd, 2011 at 1:52 pm 75
@Best place on meth:
You were saying EXACTLY the same thing last year when the finance dept tightened, and there has been no crash (or even correction). Does that even give you pause? do you ever re-evaluate?
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February 2nd, 2011 at 1:52 pm 76
@domus:
So, when there were 21 >10 M houses in the mix, that was bearish, and when there are not 21 >10 M houses in the mix, that's bearish. Have some bear pride my friends. Use your heads. Try to see things for what they are. Not everything can be a bearish signal.
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February 2nd, 2011 at 2:10 pm 77
@Dave, "At some point you have to stop believing in Santa Claus."
Dave, you're right but not in the way you think. Santa's not going to be coming any more. No more gimmicks to prop up artificially high prices. This will upset the bulls, not the bears. You'll see.
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February 2nd, 2011 at 2:11 pm 78
@Dave:
They tried. Don't you remember inventory running up, no buyers and prices collapsing 20% in months. Emergency interest rates and pumping money into the system only delayed the inevitable. There are still lots of speculators holding who couldn't sell last time prices plummeted and like you they think all is well now. There are also plenty of new speculators who entered the market since. This time the government is out of tricks to delay the collapse.
Ever person who has purchased a place over the past few years is a speculator. They are speculating there will be capital appreciation otherwise buying would not make sense. They are speculating interest rates will not rise. They are speculating there will be a greater fool.
Agreed. Those who think Vancouver real estate can sustain these levels truly believe in Santa Clause.
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February 2nd, 2011 at 2:21 pm 79
@Vanrod:
Check out the trend:
http://worldhousingbubble.blogspot.com/2011/02/va…
It started last year. Game is over. There are no new tricks to reverse it.
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February 2nd, 2011 at 2:22 pm 80
@Dave:
Like ever-rising prices?
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February 2nd, 2011 at 2:31 pm 81
No, wait, a soft landing!
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February 2nd, 2011 at 2:35 pm 82
Pope:
just an idea. I am starting to suspect that elections might be round the corner. Without taking sides, it might be a good idea if readers of this blog took the step to write to ALL their candidates letting them know what they think about the CMHC (namely, that it should immediately stop insuring mortgages for millionaires and RE investors with multiple property, then it should be abolished in due time).
We could use a format similar to the one that was circulated a few months ago. I'd be happy to send it off to the people running in my area.
If there are 3 candidates in your constituency, make sure to let them all know that the CMHC is one of the things at the top of your list: these people are only sensitive to electors' input during election time.
Don't let the opportunity pass you by.
The CMHC is probably the single most important reason of the huge price inflation over the past 8 years. Get rid of it and sanity might actually come back.
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February 2nd, 2011 at 3:04 pm 83
@Best place on meth: Something's fishy here. If these are the "rich Asian" buyers from China, what would cause a little group to buy at this exact level at this particular moment? A special sales presentation to a small busload to move a bunch of properties at once? Could it be that some of the moderately wealthy in China are expecting the RE bubble in major cities to pop any minute? (Reasonable people could agree that this would not be unexpected given overbuilding, govt. efforts to dampen the RE fervor, inflation picking up.) Hypothesis: A very small group, probably Chinese realturds who read the writing on the wall there, decide to sell while they have equity, take their gains to Canada where they feel things are much more stable and they have relatives…but oops…a surprise is coming…Doesn't change my view that we are flatlining before we drop off a cliff. A drop in the proverbial bucket of sales…but certainly a molehill that industry and its mouthpieces will present as a mountain.
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February 2nd, 2011 at 3:30 pm 84
I see the James development on 2nd is having a "Chinese New Year Sale", basically a 10K incentive to buy in Feb. Are they trying to appeal to imaginary buyers?
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February 2nd, 2011 at 4:45 pm 85
Looking at the numbers, I think you would have to be insane to think that Chinese buyers don't matter in certain markets like VW and Richmond. I mean, the index for Richmond SFH is now over **300**. West Van is around 200. The y-o-y in Richmond is 22.6%. That's +22.6%.
This doesn't mean that these places are immune–not at all. But the buyers that are pushing the market in these areas–today in 2011–are very likely Chinese.
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February 2nd, 2011 at 8:22 pm 86
@VHB:
What do you mean by "Chinese"? If you simply mean of ethnic Chinese origin, well again no shit they matter just about everywhere in the Lower Mainland.
If you mean "immigrants of Chinese origin" well there are more than enough of them to be significant in many municipalities.
If you mean "offshore buyers" the numbers show they cannot matter in more than a few neighbourhoods.
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February 2nd, 2011 at 10:02 pm 87
@VHB: I am curious as to what your previous 20 day MA predicts compared with the 5 day MA, since the listings/sales near end of month is sometimes volatile (presumably due to back log and delays and general monthly patterns). In any case, this is great info, and will be interesting to watch!
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February 2nd, 2011 at 10:49 pm 88
Pope, could we change the disappearing vote trigger from -10 to -5? That way, we can vote down contrary thoughts more quickly. k thanks.
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February 2nd, 2011 at 11:44 pm 89
@Dave:
Dave, could you go hang out at RET instead?
Your viewpoints will be appreciated much more over there.
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February 3rd, 2011 at 12:03 am 90
@Best place on meth:
Unlike you, I don't seek to reaffirm my viewpoints. I want to read contrary opinions so that I can question my own beliefs. I never want to be wrong for lack of consideration of all viewpoints.
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February 3rd, 2011 at 12:10 am 91
Interestingly enough, even those "vacation properties" are still overpriced.
I viewed the one at 545 San Cabrio Court almost a year ago. It is by no means a vacation property. It is a residential home and it won't sell unless the asking price drops at least another 50k.
The glut of inventory in the Okanagan is odd – there are tons of homes for sale, but it is obvious that only a small percentage of them are serious about selling. I was seeing homes relisting last month that were listed for almost a year at 700k, and they're coming back on at 690k. Get serious.
There were a few oddball sales last Oct/Nov where overpriced homes were selling within 5% of ask, but I think that more serious sellers are coming onto the market and that will spell an end for the overpriced sales. I expect fairly quick price drops by the summer, in the realm of 10%.
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February 3rd, 2011 at 12:41 am 92
Hi Guys,
Yup, I used to work in the film biz. Real Estate pays exponentially better and the hours are a bit more manageable.
I bet anyone here a lunch on me that prices in Vancouver will rise this year.
Any takers?
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February 3rd, 2011 at 12:44 am 93
@Dave:
Whatever Dave,
My point is that you and the other cheerleaders keep whining about the voting system here and how we're all mean to you because of our supposed "group-think", so I just thought you'd be happier at RET where cheerleaders abound and you wouldn't have to suffer such indignity.
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February 3rd, 2011 at 12:46 am 94
@Mike Stewart:
1. Easy profits in RE have drawn people out of just about every field, even the movies.
2. When a realtor offers to buy you lunch, ask yourself how much your time is worth to you. [Second prize... TWO lunches with MikeStewartRealtor...]
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February 3rd, 2011 at 12:46 am 95
@Mike Stewart:
Hi Mike,
I'll take your bet on the condition that should I lose I would just send you $20 and you go have lunch by yourself.
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February 3rd, 2011 at 12:53 am 96
@Best place on meth: "..would just send you $20 and you go have lunch by yourself."
LOL
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February 3rd, 2011 at 12:54 am 97
@fatjay:
Agreed. I go to Kelowna about once a month and I keep driving by the same houses for sale, over and over again. And oddly, when I noticed that some were no longer listed on MLS, I checked out the recent BC Assessment database to see how much they sold for, only to discover there is no sale recorded. Interesting.
I think the same thing is happening here too, I keep seeing the same houses/condos for sale over and over again. I looked at V862005 (New West) around this time last year, and they haven't dropped the price ONE CENT! Geez…get a clue people!
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February 3rd, 2011 at 12:54 am 98
@Mike Stewart: Mike, I'll take that bet. Now we have to set the parameters. I suggest "the benchmark price for a Vancouver home will be lower on January 1st, 2012 than it was on January 1st, 2011." How does that sound?
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February 3rd, 2011 at 12:57 am 99
#90 Dave Says:"I want to read contrary opinions so that I can question my own beliefs."
Why should whining about other real estate talkers or re-inventing basic economics to suit your view be voted up? Post coherent reasoning instead. You might even like the novelty. Until then your posts are simpleton attempts at viral anti-marketing – bears unfair! undemocratic! not accepting my BS is victimization!! – and deserve to be drilled into obscurity. Try thinking outside the downtown shoebox.
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February 3rd, 2011 at 1:00 am 100
Hi oneangryslav2,
Good to hear from you.
I lose the bet if the following situation exists:
“the benchmark price for a Vancouver home will be lower on January 1st, 2012 than it was on January 1st, 2011.”
Sounds good to me.
Where should we go for lunch?
What happens if I win?
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February 3rd, 2011 at 1:14 am 101
@Mike Stewart:
OK…so if I lose I have to let you buy me lunch. What if I win?
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February 3rd, 2011 at 1:41 am 102
@IT__Pro
LOL! Uh no.
If I win you buy me lunch (quite tough to collect on given the anonymous nature of this blog). If you win, I buy you lunch (quite easy to collect on if you're willing to meet me Downtown at a restaurant of your choosing).
This offer is open to everyone here and I'm prepared to buy several lunches.
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February 3rd, 2011 at 1:44 am 103
We appear to have a breakout taking place.
http://www.bloomberg.com/apps/quote?ticker=GCAN5Y…
Higher interest rates from the banks coming up?
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February 3rd, 2011 at 1:46 am 104
@Mike Stewart: Is this a closed bet, or can others join?
I think you need to specify whether you are considering overall prices, single family, attached, or condo, and, does someone publish a benchmark for one day? Just curious what number you are using for the Jan 1 2011 number?
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February 3rd, 2011 at 1:52 am 105
@Mike Stewart: I'm game. I'm in Vancouver 2-3 times a year, often around the new year.
Or I can send you a bag of gourmet coffee instead if I lose. You're going to need it working that 3rd job to make ends meet.
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February 3rd, 2011 at 1:53 am 106
I see the James development on 2nd is having a “Chinese New Year Sale”, basically a 10K incentive to buy in Feb. Are they trying to appeal to imaginary buyers?
*****
Hopefully the building does not have a 4th or 14th floor or else they will screw themselves out of some sales to their target ethnic market.
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February 3rd, 2011 at 1:54 am 107
We appear to have a breakout taking place.
http://www.bloomberg.com/apps/…..CAN5YR:IND
Higher interest rates from the banks coming up?
__________
Gee, you haven't been saying that since 2008 or anything…
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February 3rd, 2011 at 1:55 am 108
@AG Sage
Good to hear from you.
The bet is open to all takers on this thread.
I was going to use this "“the benchmark price for a Vancouver home will be lower on January 1st, 2012 than it was on January 1st, 2011.” based on REBGV numbers for the City of Vancouver attached and detached. Does that work?
Are you in?
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February 3rd, 2011 at 1:56 am 109
PS make it decaf from Artigiano's please!
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February 3rd, 2011 at 2:34 am 110
"Capital Economics also warns that a crash in prices could cost Canada Mortgage and Housing Corp., which insures high loan-to-value mortgages, to lose as much as $10-billion"
Writing is on the wall for both CMHC and housing market
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February 3rd, 2011 at 2:44 am 111
@Mike Stewart:
Mike, I've got to ask about your thinking here. Are you of the opinion that Vancouver real estate prices will go up indefinitely, or do you think they will go down, but just not in 2011?
I guess that, if you think they will always go up, I'll leave it at that, because that would indicate to me a lack of fundamental understanding. But if you just think that 2011 will not be the year when gravity kicks back in, I would be interested to know why you think so.
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February 3rd, 2011 at 2:48 am 112
"As the bank raises interest rates, mortgages will become more expensive for Canadians. Add inflation to the mix, and Capital Economics predicts prices could fall 25 per cent over the next few years."
http://www.theglobeandmail.com/report-on-business…
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February 3rd, 2011 at 2:55 am 113
@Mike Stewart:
Sure, I'm in.
The Jan 1 numbers would be December's numbers, no? What is the starting number, maybe that will clarify your metric for me. Not that it matters. At all. The bet works out the same. For me, that is.
Worst case, you can reach me at my blog, which is linked off my name above. My comments are open.
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February 3rd, 2011 at 3:57 am 114
@Blindy:
I like those "ethnic buildings", great foundation for the future ghettoization.
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February 3rd, 2011 at 4:21 am 115
@Blindy:
I like those “ethnic buildings”, great foundation for the future ghettoization.
******
You mean CONTINUED ghettoization. The lower mainland is already a composite of self segregated ethnic communities. Richmond is Asian, Surrey is South Asian, and West Vancouver is Caucasian (albeit rapidly changing). There is no multiculturalism in the lower mainland.
These actions just reinforce the “differences” of groups instead of their “similarities” and reinforces the “us” versus “them” mentality.
I have never seen so many long, unhappy and defensive faces in what is supposed to be the “best place on earth,” and by logical extension, the happiest place on earth.
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February 3rd, 2011 at 4:43 am 116
@Blindy:
"Richmond is Asian"
There are almost as many Europeans as there are Asians :
http://www.richmond.ca/__shared/assets/2006_Ethni…
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February 3rd, 2011 at 4:54 am 117
@Blindy:
"There is no multiculturalism in the lower mainland."
I rub elbows with people from different cultures all the time — on the ski lift, on the sky train, at lunch, at dinner, at the PAC, in the park, at home, everywhere. It might be a question of wanting to or not wanting to. Also, please note that the divisions you mention are made on racial, rather than cultural grounds. Asian is not a culture, as any multi-stop visit to that part of the world will tell you, nor is white or south Asian.
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February 3rd, 2011 at 5:00 am 118
@Anonymouse:
Wow, look at that percentage change in 5 years.
Chinese up 21%, French/English/Canadian are moving out.
What's attracting all the Chinese to a flood plain?
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February 3rd, 2011 at 5:12 am 119
“Richmond is Asian”
There are almost as many Europeans as there are Asians :
http://www.richmond.ca/__share…..y20987.pdf
______
Did you actually read your 2006 report or do you just like the knee jerk responses to clearly visible facts because it might be construed as non-PC?
If so, I guess you glossed over this pertinent information in the report:
"Visible Minorities are now the Majority in Richmond"
In Richmond in 2006, 65.1% of the population is a visible minority under the definition above, the highest proportion of any municipality in B.C. and the second highest (after Markham, Ontario) in Canada. The predominant minority group in Richmond is Chinese, at 45% of the total population (the highest proportion in Canada by a wide margin). The next most common minority groups are the South Asian group (for example East Indian, Pakistani), at 8% of the total, and Filipino at 5% of the total.
As for "Europeans," even when you add up all the European ethnic origins in the report, (English, Scottish, Irish, German, French and Ukranian), it is less than even the Chinese "asians." I did not even count the Japanese, the Philippinos, and the Southeast Asians in that definition of "asian."
By the way, I see that you only took offence to Richmond being categorized by its dominant ethnic group.
What, no offence taken to West Vancouver being categorized as Caucasian?
I see, you just had a little PC knee jerk response….
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February 3rd, 2011 at 5:48 am 120
I love digging up these old articles written just prior to other housing busts, like this one from 2006 discussing how higher interest rates are not needed to burst a bubble.
http://www.foxnews.com/story/0,2933,185091,00.htm…
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February 3rd, 2011 at 5:56 am 121
@Anonymouse: #fail. Page 2 of the doc you link to has 65% of Richmond being vizmin. That seems like a 2:1 ratio to me.
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February 3rd, 2011 at 5:59 am 122
@Best place on meth: Bang on. I love this quote as is seems so appropriate for Vancouver these days.
"For many homebuyers, interest rates are the key to how much they will pay for a home. How much home you can afford is really how much monthly payment you can swing. The fact that a home is $300,000, $500,000, or $700,000 is almost irrelevant — what can I buy for $3,000 a month?"
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February 3rd, 2011 at 6:08 am 123
@vreea
LOL! I've been out of film for 5 years and weathered the last correction very well. Things are so good I'm hiring!
@best place on Meth – Sure, as long as the $20 comes with a photo of you with a sign behind it saying I won the bet.
@N – Neither. Its just a bet for a lunch. You in?
The market is a dynamic thing that is impossible to predict. Be VERY wary of anyone who says they can accurately tell you the future.
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February 3rd, 2011 at 6:10 am 124
@vreea
LOL! I’ve been out of film for 5 years and weathered the last correction very well. Things are so good I’m hiring!
@best place on Meth – Sure, as long as the $20 comes with a photo of you with a sign behind it saying I won the bet.
@N – Neither. Its just a bet for a lunch. You in?
The market is a dynamic thing that is impossible to predict. Be VERY wary of anyone who says they can accurately tell you the future.
@ AG Sage – My comments on my blog are open too! I like your blog!
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February 3rd, 2011 at 6:12 am 125
@Anonymous:
"@N – Neither. Its just a bet for a lunch. You in?"
I'd have paid for a lot of lunches if I had bet every year that I thought Vancouver RE prices would go down.
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February 3rd, 2011 at 6:17 am 126
Anyone hear Bernanke speak today? He's very upbeat about the US recovery. I wonder how many of you bears took it up the ass with the Dow Jones Index busting through 12k and the TSX exploding like gangbusters. Must suck to be on the sidelines.
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February 3rd, 2011 at 6:17 am 127
@Mike Stewart Vancouver Realtor:
You'll get a photo of my ass with "You won the bet" written in Sharpie.
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February 3rd, 2011 at 6:19 am 128
1637:
The contract prices of rare tulip bulbs in the Dutch Republic, which
had been steadily climbing for three months, abruptly dropped, marking
the decline of tulip mania.
hey bulls! you were wrong then as you are wrong now
so suck it up princess!
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February 3rd, 2011 at 6:22 am 129
@Mike Stewart Vancouver Realtor
"I weathered the last correction very well"
LOL, what 8 months?
Wow are agents going to have a rude awaking soon. That was a blip. This city has been living high on the hog ( debt)for so long that they don't even know reality anymore.
Untrained kids ( not you), taking a 2 week course, and running out and making $150k a year is NOT normal. It only seems that way because it has gone on a little too long.
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February 3rd, 2011 at 6:24 am 130
Sorry, this bet is G Rated. You can keep that picture for someone else.
N – The I guess you're a bear?
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February 3rd, 2011 at 6:25 am 131
@Supraboy:
That means higher rates coming.
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February 3rd, 2011 at 6:37 am 132
@Supraboy: Mr Bernanke, the same person that said there is no housing bubble in 2005!
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February 3rd, 2011 at 6:39 am 133
@Supraboy:
What does the stock market have to do with the demise of Vancouver real estate?
Are you busy trying to figure out how to profit from the death and destruction in Egypt?
As always, thanks for stopping by douchebag.
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February 3rd, 2011 at 6:40 am 134
@Supraboy: Being a Vancouver RE bear doesn't mean you're a bear for everything. I'm bullish on equities and US Real Estate, just a bear on Vancouver real Estate (and maybe Toronto as well). In fact, the better the US economy the worse the crash will be because the Canadian dollar will weaken and purchasing power of the consumer will decline (i.e. less money left for Mortgages).
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February 3rd, 2011 at 6:45 am 135
@Best place on meth: Actually BPOM, it does, and same with exchange rates, but in the opposite way that he thinks. A strong US economy will exacebate the Vancouver RE bust in the following way. 1. Massive global outflux from RE, bonds and commodities back in to equities. Thus a spike in global RE listings including Asia. 2. Canadian dollar weakens w.r.t. US dollar which means imports start to cost more (including gas prices etc) so less money available to pay mortages. 3. Interest rates start to go up to curb inflationary pressures, adding more downward pressure to RE. There is more but you get the hint. The world is connected!
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February 3rd, 2011 at 6:46 am 136
@Blindy:
"What, no offence taken to West Vancouver being categorized as Caucasian? "
Who said I'd taken offence?
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February 3rd, 2011 at 7:08 am 137
@Mike Stewart Vancouver Realtor:
"N – The I guess you’re a bear?"
I prefer the term, "sane."
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February 3rd, 2011 at 7:28 am 138
http://tinyurl.com/6fvm3k7
"Madani is predicting that house prices will fall by a cumulative 25 per cent over the next several years or “in the same ball park as the recorded declines in the U.S. and other countries.”
YUP!
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February 3rd, 2011 at 7:38 am 139
@various bets taking place: on that topic, I am in need of advice. Last night my brother in law wanted to to TRIPLE our $100 bet that average price of greater vancouver dwelling will be down by 35% or more in december 2013. I would like to poll the readership here – who here thinks I should go for it? ( I am the bear bettor, he the bull).
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February 3rd, 2011 at 7:41 am 140
sorry, that's relative to december 2011.
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February 3rd, 2011 at 7:46 am 141
2010! I mean december 2010!! (i am a big believer in post edit functions)
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February 3rd, 2011 at 7:51 am 142
TRIPLE our $100 bet that average price of greater vancouver dwelling will be down by 35% or more in december 2013. I would like to poll the readership here – who here thinks I should go for it?
*****
I think that you should go for it if you like losing 300 bucks. But hey, you are surely one of the many rich bears here sitting on a massive war chest (lol).
You have been taking advice from the same bears for probably 5 years and they have all been wrong.
And 35%, keep dreamin' you youngin
'
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February 3rd, 2011 at 7:53 am 143
@tpfkaa:
35% in 3 years?
I'd go for that bet.
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February 3rd, 2011 at 7:58 am 144
@tpfkaa:
35% in 3 years?
I’d go for that bet.
________
says the unemployed student…
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February 3rd, 2011 at 8:08 am 145
# 143 Best place on meth Says:"35% in 3 years?…I’d go for that bet."
No question. The ONLY thing floating the market is the Conservative's manipulation and distortion of rates and incentives. The air's almost out of that balloon, hence the election noises. The ONLY reason for not jumping on Mikey's bet is you're betting on how low the government will stoop to win the next election, not where the market must inevitably go. 2013 is safely outside of what anyone can do without destroying the country or selling it off.
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February 3rd, 2011 at 8:35 am 146
@Mike Stewart Vancouver Realtor:
The market is a dynamic thing that is impossible to predict. Be VERY wary of anyone who says they can accurately tell you the future.
Impossible to predict exactly when the bubble will burst, but more or less a mathematical certainty that it will pop.
However in terms of reading tea leaves most of you pimps engage regularly.
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February 3rd, 2011 at 8:35 am 147
@tpfkaa:
Don't bet on the average – it's incredibly biased by market mix. The average in many California markets lagged the bust by well over a year – high end properties kept selling but the low end went dead.
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February 3rd, 2011 at 9:11 am 148
Just got another "Chinese New Year Promotion" email, this time from Onni (yesterday was from the James development on West 2nd).
Basically you go to one of their presentation centres, buy a new home, and for that you get to "Spin the Wheel of Fortune" to win prizes such as luxury goods, gift cards, or a discount on your purchase price.
If the Chinese money thing is a myth – and I've no idea whether or not it is – why are the marketeers chasing after it?
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February 3rd, 2011 at 9:12 am 149
@Supraboy: Bernanke: subprime is contained. Bernanke needs markets, government and people to be calm and confident. I wouldn't take anything he says at face value, ever. With the other Fed bankers you can read between the lines, some are even forward, The Ben Bernank is a spin-meister.
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February 3rd, 2011 at 9:18 am 150
@Anonymouse: Who says they are? It's just an excuse to hold a publicity stunt. Any reason is good enough, just happens to be Chinese New Year. If they have an Easter Egg Hunt will you say they're courting the rich European demographic?
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February 3rd, 2011 at 9:32 am 151
I have better questions.
1. If the Chinese thing is true why are they sending you emails. In the 90s rich Hong Kong Chinese bought the whole buildings in hours.
2. Why are they giving stuff away in order to attract buyers? Rich Chinese pay over asking and they don't need a free gift.
The promotion and email to you shows sales are slow and the Rich Chinese are not buying. The whole promotion is designed to send the message to you and motivate you to buy because the rich Chinese thing is a marketing ploy.
There are of course lots of people of Chinese decent in Vancouver who are buying just like every other race. They are doing it with highly leveraged mortgages just like everyone else.
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February 3rd, 2011 at 9:51 am 152
New Listings 267
Price Changes 47
Sold Listings 104
11342
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February 3rd, 2011 at 9:55 am 153
@Renting:
Or perhaps they're just jumping on any calendar event in order to generate interest surrounding a promotion? Maybe they'll be doing Valentine's and Easter specials too?
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February 3rd, 2011 at 9:56 am 154
@4444:
>>>The market is a dynamic thing that is impossible to predict. Be VERY wary of anyone who says they can accurately tell you the future.<<<
Oh crap, that means I can't count on the real estate industry's prediction of a 3.72% gain in 2011.
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February 3rd, 2011 at 9:57 am 155
@DaMann: Funny factoid. When the bubble burst in California, there were as many real estate agent licensed in California as there were real estate transactions in the state for the entire year.
One might be able to identify asset bubbles by the associated occupational bubbles.
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February 3rd, 2011 at 10:01 am 156
"Since I bought my home my 'income' has been 40% from my job and 60% from housing appreciation."
http://wp.me/pcq1o-1Oi
The amount of "income" from appreciation of current market value of their house should be ringing alarm bells for this owner, and telling him/her something about the market, …but it isn't.
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February 3rd, 2011 at 10:06 am 157
Ha!
I just did an analysis on a house down the street on McGill from the one pictured above and used the one above in my analysis.
All the comparable houses that were showing active I called on were sold for full price (1524 E Pender & 2594 Triumph Sold Full Price 2962 Trinity Accepted Offer) or had an accepted offer.
The market for houses under $700K in Hastings East is tight and moving away from where a lot of you want it to be!
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February 3rd, 2011 at 10:15 am 158
@Mike Stewart Vancouver Realtor:
Mike,
I think you've mistaken us for the cow-eyed dumb asses you normally deal with in your business, or perhaps you're just on the wrong website without realizing it.
Nobody here wants to buy a $700K piece of shit on Hastings or anywhere else in this city.
Don't you have balloons to tie?
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February 3rd, 2011 at 10:17 am 159
@4444:
>>>The market is a dynamic thing that is impossible to predict. Be VERY wary of anyone who says they can accurately tell you the future.<<<
Oh crap, that means I can't count on the real estate industry's prediction of a 3.72% gain in 2011.
&&&&&&&&&&&&&&&&
LMAO – priceless!
Don't you know – only let the experts predict like professionally trained realtors!
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February 3rd, 2011 at 10:22 am 160
I've been reading some anecdotals by renters lately. A few posters have talked about how investors have swooped in on a few occasions to flip the property the renters were living in…meanwhile the renters just stay for the next flip. The investor holds for a few months and then flips to another sucker. It is very apparent that much of Vancouver real estate is currently in a Ponzi scheme.
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February 3rd, 2011 at 10:32 am 161
@The Leak:
This happened to me in 2004/2005. The condo we were living in for two years had about 3 different owners. Some who never even came to see the place. We were just informed by the real estate agent/property manager that the place had been sold and we were to make the rent cheques out to a new owner. Odd. When we finally moved out, the building manager (who had something to do with the strata, I guess) asked who owned the place, because they were behind in their strata fees. I wonder how many times that place has been flipped in the last five years.
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February 3rd, 2011 at 10:36 am 162
@Mike Stewart Vancouver Realtor: Mike, I completely believe you. However, this is what makes people like me believe Vancouver is a bubble ready to pop. I have a real honest question for you: Do you really think this is sustainable? The reality is that everyone collectively decides that their property is worth crazy amounts, and anyone who wants to buy has to pay those crazy amounts. If you are already in the game, this is OK because you also want a crazy amount for your property. But how about first time buyers. At some point don't you think they will collectively say, "Screw it … keep you house … I'll rent thank you!" DO you not think this will happen? Do you think everyone will be house horny forever? My final question: What do you suggest a starting family with household income of 75K should buy in this city?
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February 3rd, 2011 at 10:54 am 163
Anecdotal evidence on my street suggests that the market is still hot. Lots of sold signs everywhere.
On another topic, what the hell is going with this pay per interent usage?
Are they are trying to screw every canadian more than they already have?
We already pay the highest internet fees on the developped world already. Now they want to put everyone on interent rationing, fxxking comunist country we are becoming!
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February 3rd, 2011 at 11:05 am 164
PaulB
Looks like 12,000 will be here before mid-month.
Any thoughts on the general market from your point of view, or too early to call any meaningful trends?
Looking at the real estate stats, wow lots of markets are underwater from levels 3 years ago. Just Richmond and Van West holding things up. But if you look at other markets (on the whole), not looking that great.
Interesting. Imagine how the YoY and 3 year stats look over the months ahead, I can't see the picture improving.
Mike, I've met him, he's a hustler, good for him.
I think things weaken as we progress through the year, gotta get through the 35yr amorts and hit a few interest rate hikes…that said, the market already looks tepid to me.
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February 3rd, 2011 at 11:18 am 165
February 2011 month-end projections
Days elapsed so far 3
Days remaining 17
5 Day Moving Average: Sales 142
5 Day Moving Average: Listings 285
SALES
Sales so far 461
Projection for rest of month 2421
Projected month end total 2882 +/- 659
NEW LISTINGS
Listings so far 884
Projection for rest of month 4852
Projected month end total 5736 +/- 576
Sell-list so far 52.1%
Projected month-end sell-list 50.2%
MONTHS OF INVENTORY
Inventory as of February 3, 2011 11342
MoI at this sales pace 3.94
Inventory is growing quickly. We have a shot at a 2-party month!
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February 3rd, 2011 at 11:23 am 166
Seriously Mike Stewart how come you don't work in film anymore?
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February 3rd, 2011 at 11:46 am 167
I don't doubt MS's anecdotes. The market in WV VW, VE, Richmond, and BU is hot.
But outside of that it is not. Kelowna and VI are already toast, all would agree. Now the suburbs are cold. It is getting closer to the core.
knock knock
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February 3rd, 2011 at 11:52 am 168
mike stew, today is Chinese new year, you picked one fvck of a day to provoke me with your cheap attempt at some free exposure.
I have placed a curse on you…..
Real estate will be your vehicle to poverty.
444444444444444444444444444444444444444
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February 3rd, 2011 at 12:05 pm 169
What I thought was going to be a market update on the Fraser Valley turned out to be another fear-mongering piece from yet another low life realtor complete with scary camera angles.
http://www.youtube.com/watch?v=JJ0XouOE4TQ
Seriously, I fucking hate these people. I have more respect for the local gangsters.
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February 3rd, 2011 at 12:12 pm 170
@Best place on meth:
You're crackin' me up today
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February 3rd, 2011 at 12:25 pm 171
Thanks to that lawsuit against him, Jurock now lays low and does his shit from home.
http://www.youtube.com/watch?v=L7dVD4TICvg
You can't hide forever, Ozzie!
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February 3rd, 2011 at 12:33 pm 172
#170 IT_Pro,
I agree. BP on Meth is on fire today.
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February 3rd, 2011 at 12:35 pm 173
@paradox:
"We already pay the highest internet fees on the developped world already. Now they want to put everyone on interent rationing, fxxking comunist country we are becoming!"
You are mixed up on this one. The market players like Bell want to charge more. In a free market, they would get to do that. The ruling that people are mad about says that people can sell what they want for the price they want. The Harper government is coming in and saying, No, we the government will decided who pays how much for what, and we will not allow Bell to charge smaller companies on a pay-per-use basis. So yes, we are becoming pinkified here, but the pinko side is the side that wants to keep prices lower (in the short term for a specific group — see Economics in One Lesson.)
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February 3rd, 2011 at 12:48 pm 174
How can people listen to that corrosive teutonic accent of Ozzie is beyond me. especially when he is speaking his book so blatantly. yeah, new york, paris , london and vancouver. What a pice of shit motherfucker.
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February 3rd, 2011 at 1:00 pm 175
One last vid from a concerned citizen who fears Vancouver is already lost.
http://www.youtube.com/watch?v=AVH8yVX3E1A
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February 3rd, 2011 at 1:02 pm 176
The fact a guy like Ozzie Jurock is still around shows how stupid people are in Vancouver. People actually pay him to take a course that teaches you how to buy real estate FROM him. Ozzie Jurock is the biggest real estate flipper in all of BC. He makes Tom Vu look like a well respected financial advisor.
http://classactionozzie.com/
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February 3rd, 2011 at 1:19 pm 177
Interest rate rise could trigger house price collapse, report says
http://ca.news.yahoo.com/interest-rate-rise-could…
' A new report predicts that Canada's housing market is poised for a collapse and is only waiting for the trigger of rising interest rates expected for later this year — a view that flies in the face of many other forecasts. '
but but it's different here!!!!
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February 3rd, 2011 at 1:27 pm 178
@N: N, to be quite honest, I think you are the misinformed one here on the internet fee debate (newsbreak: internet providing is not a free market in Canada)
See here for a debate on the issue: (go to 35:35)
http://tinyurl.com/648yhr9
Go George Burger!!!
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February 3rd, 2011 at 1:40 pm 179
@1:
I am in school fulltime so I don't really have a "from the trenches" perspective, however if I had to guess, I would expect a busy next couple months with unusually high sales and listing numbers; followed by a huge drop in demand this summer and significant price declines. I expect at least a 30% drop within a couple years.
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February 3rd, 2011 at 1:44 pm 180
@VHB:
"MoI at this sales pace 3.94"
Wow.
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February 3rd, 2011 at 2:43 pm 181
#175 Best place on meth Says: "One last vid from a concerned citizen who fears Vancouver is already lost."
Sympathetic, but way too many factual errors for my taste. Bailed early. If I had a Youtube account I'd reply to his rhetorical 'where is anyone talking about this problem' question.
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February 3rd, 2011 at 2:54 pm 182
@Renting:
Finally someone with a brain. Don't forget the brown dudes are buying too. We are not rich, but we have many. With so many of us, there is got to be some dumb ones buying now.
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February 3rd, 2011 at 3:04 pm 183
@Anonymouse:
"A musician drove his statistician friend to a symphony concert one evening in his brand new mid-sized Chevy. When they arrived at the hall, all the parking spots were taken except one in a remote, dark corner of the lot. The musician quickly maneuvered his mid-sized Chevy into the space and they jumped out and walked toward the hall. They had only taken about ten steps when the musician suddenly realized he had lost his car key. The statistician was unconcerned because he knew the key had to be within one standard deviation of the car. They both retraced their steps and began searching the shadowed ground close to the driver's door. After groping on his hands and knees for about a minute, the musician bounced to his feet and bolted several hundred yards toward a large street light near the back of the concert hall. He quickly got down on all fours and resumed his search in the brightly lit area. The statistician remained by the car dumbfounded knowing that the musician had absolutely zero probablity of finding the key under the street light.
Finally, after fifteen minutes,the statistician's keen sense of logic got the best of him. He walked across the lot to the musician and asked, "Why in the world are you looking for your key under the street light? You lost it back in the far corner of the lot by your car!"
The musician in his rumpled and stained suit slowly got to his feet and muttered angrily, "I KNOW, BUT THE LIGHT IS MUCH BETTER OVER HERE!!"
http://my.ilstu.edu/~gcramsey/VarCov.html
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February 3rd, 2011 at 3:14 pm 184
@blueskies:
All your losing bears are pinning the hope on China hei ?
I am surely to tell that even China raise its int to moon level,no one could stop the rolling tank which carries tons of cash enough flooding the whole world.When you guys can face the raality and admit defeat ? Vancouver is unique market cos it is dominated by Chinese buyers either from local or abroad.This century belongs to China.
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February 3rd, 2011 at 3:14 pm 185
@Anonymouse: If we continue on pace for inventory accrual we will be at 13K or so by the end of the month. That would put MoI at 4.6 with 2800 sales.
This is indeed lower than 6, so you have to expect prices up a few notches.
A precondition of price drops is a big inventory stock. We aren't there yet, so no price drops yet.
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February 3rd, 2011 at 3:28 pm 186
@Lilypad:
No, it is not a free market, which is a shame, but restricting the fees that can be charged by businesses represents more state intervention, not less. I know it makes it easier if you consider every instance of reduced choice to be communist and every short lived burst of individual satisfaction as capitalist, but it's not that simple. (See: http://en.wikipedia.org/wiki/Economics_in_One_Les…
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February 3rd, 2011 at 7:02 pm 187
@vreaa:
Of course the housing appreciation is not 'income' but unrealized (and collectively unrealizable) capital gains.
Such is the material that this house of cards has been built from.
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February 5th, 2011 at 6:10 am 188
[...] Crash at vancouvercondo.info 2 Feb 2011 4:19pm – “Here’s an attempted flip: 4842 Victory Street Burnaby MLS #V861597 Sold Sep22/2010 for $655,000 now listed for $888,000. House is a teardown or in need of major renovation. Was an estate sale originally in 2010 I think.” [...]
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February 5th, 2011 at 7:50 am 189
[...] turtle at vancouvercondo.info February 2nd, 2011 at 6:34 pm- “My friend Stan sat down today, with an anxiety attack: he is about to buy a 1 bdrm condo [...]
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