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Divergence

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Stories abound of weakening housing markets. Except Vancouver. Here are some examples, some a bit closer to home than you might think:

fishyre: periphery not selling

househuntvictoria: staleness in the spring air

worldhousingbubble: Oz not strong

huffpo: new record prices in US cities (the percentages cited are DECREASES, not increases, just to be clear.)

The Vancouver market, otoh, is hot, unfortunately the “frenzy” quickly fades to a state of ennui as we move farther away from the “core”.

It’s probably nothing…

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pricedoutfornow
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pricedoutfornow
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Just for kicks I've been counting the number of listings of "luxury" homes for sale in Kelowna (priced $900k to unlimited). About a month ago, there were 264 listings. Yesterday, 298. Even noted at least one foreclosure of a couple-million dollar property and one piece of land listed with a whole bunch of 8s wasn't selling. This seems like a lot of luxury houses for sale in a community such as Kelowna, though in the past (once in awhile) we'd hear about some movie star or hockey player who'd bought a mansion. I have a feeling Kelowna may just become California north. Lots of those luxury houses were built in 2008 or 2009. Heck, a friend of mine's parents even got into the game, building a luxury house and tried to flip it for $900k. Two years on the market… Read more »
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7 years 5 months ago
Dave
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Let's not mistake a balanced market for a bad market. We haven't experienced a balanced market for over ten years. We had mostly a bull market and a short bear market in the Fall of 2008. The discussion seems to focus on either extreme, but I think we are in for a balanced market for some time to come. We can expect higher inventory and lower sales, but prices won't really move much.

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7 years 5 months ago
Manna from heaven
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Ottawa is the best place to live in Canada, or so says MoneySense magazine in its annual ranking of Canadian cities.

Vancouver, meanwhile, did not finish in the top 25, ranking 29th due to finishing dead last among 180 cities for affordable housing.

http://www.vancouversun.com/Ottawa+named+best+pla…

We also eat our young.

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7 years 5 months ago
Boombust
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"We can expect higher inventory and lower sales, but prices won’t really move much."

Who says?

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7 years 5 months ago
jesse
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"higher inventory and lower sales"

There's higher inventory and lower sales, and there's higher inventory and lower sales. Parts of BC are definitely the latter.

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7 years 5 months ago
registered
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2 Dave Says: "..and a short bear market in the Fall of 2008.."

If that's a bear I'd love to see your definition of a bad market. Prices entered total and instant free-fall at the end 2008. Had it maintained that pace the market would be back at mid-Nineties prices today.

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7 years 5 months ago
Anonymous
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@Dave:

If debt ratios aren't that high, I would think that a 10% drop would still put us in a relatively balanced market.

However, given all the 5-10% down-payment sales that been completed in recent years, many of these buyers would have their equity wiped out quite quickly. If interest rates creep up as Carney suggests, watch out below.

"We can expect higher inventory and lower sales, but prices won’t really move much." Dave, are you for real?

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7 years 5 months ago
Renting
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On CBC's Lang and O'Leary Exchange yesterday.

Is Vancouver real estate a boom or a bubble? "It is a bubble…"

Check it out 22:30 in.

http://tinyurl.com/49p7m9g

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7 years 5 months ago
Dave
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@Boombust:

I said it. It's already a done deal. Some of us get the 'memo' before others.

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7 years 5 months ago
Anonymous
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@fixie guy: "If that’s a bear I’d love to see your definition of a bad market. Prices entered total and instant free-fall at the end 2008. Had it maintained that pace the market would be back at mid-Nineties prices today."

Ummm, but it didn't?

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7 years 5 months ago
registered
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@10 Anonymous : What's your point sweetums?

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7 years 5 months ago
victoria
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I have the private client listing service and every day about 4 or 5 homes over $500,000 keep coming on. Not one is selling – especially the homes over $1 million. Just sitting, sitting, sitting.

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7 years 5 months ago
Dave
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@fixie guy:

If only… Ya but… If it wasn't for this… If this had happened… Incorrect decisions are always preceded by an excuse.

We all do this and it often leads to irrational thoughts or delusions. If we are late for a meeting, we blame traffic, not ourselves. Etc, etc… An interesting exercise to test your ego is to try and remove excuses from your vocabulary for one week. Instead of placing blame upon external things, try to internalize it. Ask what could I have done differently? Ask yourself where you were wrong.

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7 years 5 months ago
registered
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@13 Dave: You're the expert on delusional thoughts Dave. My post was clearly and only abut your dishonest classification of a rapidly collapsing market as a 'bear'. To make it 100% unambiguous, it was about YOU, not Vancouver.

As to the rest of the psychobabble in 13, "paging Doctor Freud, is there a Doctor Freud in the house?"

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7 years 5 months ago
Vansanity
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There's no debate left whether we're in a bubble or not… the debate is in when it will pop and how severe it will be.

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7 years 5 months ago
Flip Flop
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Has there ever been a market, anywhere in the world, that has sustained a rent/buy ratio of 300+ for any extended period of time?

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7 years 5 months ago
/dev/null
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@Dave: We can expect higher inventory and lower sales, but prices won’t really move much.

So rising MOI won't result in lower prices? We've all seen data that shows a robust relationship between MOI>6 and price decreases (from Jesse/Mohican/VHB I believe).

Are you suggesting that MOI will remain below 6 or that the correlation will break? Or are you now just going to qualify "won't really move much"?

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7 years 5 months ago
Devore
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@fixie guy: 2008 was still within +/- 20%, so a flat market according to Dave's definition.

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7 years 5 months ago
patriotz
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@fixie guy:

Prices entered total and instant free-fall at the end 2008.

Try mid-2008. Been there, seen that.

As for a "balanced" market – supply and demand are always equal at the market price by definition, so the term is meaningless. You either have a bull market or a bear market or a flat market.

And as #16 said, if anyone knows about a market that has stayed flat at 300+ price/rent, I'd like to hear about it.

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7 years 5 months ago
Dave
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@/dev/null:

I have been clear about my exact price expectations. In my opinion, prices will not fall below the Winter 2008/2009 low and not remain above the August 2010 high. I expect prices to trade between those two levels for quite a number of years.

There will be ups and downs during that period, but overall, I expect a flat trend, which will be apparent in hindsight, if not already.

Specific enough for you?

If MOI weakens to above 6, then I would expect prices to gradually adjust.

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7 years 5 months ago
Lister
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Boombust:

“We can expect higher inventory and lower sales, but prices won’t really move much.”

Who says?

____

Dave, the man who has been consistently right in his predictions. So listen up!

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7 years 5 months ago
cgh
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Speaking of soft peripheral markets, there's a poster here from Squamish. Does he/she have any news about what's happening there? I see lots of stuff for sale, and apparently sales are low/nonexistent, but prices aren't moving much.

Also, the Aqua has gone into receivership. A sign of things to come?

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7 years 5 months ago
crabman
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@Dave: I'm gonna save this gem from Dave! And since his post is headed to invisible land, here it is again (the funniest part in bold):

Let’s not mistake a balanced market for a bad market. We haven’t experienced a balanced market for over ten years. We had mostly a bull market and a short bear market in the Fall of 2008. The discussion seems to focus on either extreme, but I think we are in for a balanced market for some time to come. We can expect higher inventory and lower sales, but prices won’t really move much.

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7 years 5 months ago
jesse
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@Flip Flop: "hat has sustained a rent/buy ratio of 300+ for any extended period of time?"

I believe Taipei has been up around there for some time now. Around 95% of properties are owner-occupied so it's not representative, but it does give you an indication of what certain buyers might be thinking is "normal" for property yields.

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7 years 5 months ago
Lister
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You have been wrong for so long it is time to listen to someone who has been right – consistently. And that would be Dave! You bears failed to anticipate the strength of the market, and each of your supposed catalysts for a collapse never had their intended consequences. Shall we recite them – the 2008 recession would sped up the demise of the market; rising interest rates would crush new and marginal buyers; the end of the Olympics would herald the collapse of Vancouver RE; the 2010 mortgage rule changes would surgically strike Vancouver’s market; the introduction of the HST would crush new home sales and the market; and March 18th would be the final straw in cooking the market. Hmmmm…with that track record one would think that you should be more humble in dismissing the views of the… Read more »
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7 years 5 months ago