Vancouver market data: SFH under $1 million

Love Data? Eric has been tracking a specific North Van market and shares the raw data with you here:

Dear Readers,

I have spent over a year diligently noting the numbers of listings on MLS for the lower mainland from certain price points under 1 million dollars. My initial reasoning for taking on this endeavor was to allow me to have better insight into this crazy marketplace that can be very difficult to understand. My goal is to live on the north shore with my wife in a single detached home so all of the information I have gathered refers specifically to single detached.

As you can see from my excel sheet there are several categories: From the left are statistics specific to the North Shore. A realtor sends me any SDH listing on the North Shore (Deep Cove to Lions Bay) under 1 million. I have broken that number down by price into several categories (0-500K, 500K – 600K, 600K – 700) I then have a total listings number for SDH on the north shore under 1 mil and specifically West Van houses under 1 mil. The next categories are for the lower mainland in general. These categories range from 0 -400K, 400K – 500K etc. until 900K – 1 mil. I then have a total for all the listings and a day to day change as well as a total North Shore listings as a percentage of Lower Mainland listings.

There are several inherent flaws with my statistics that you should be made aware of if you haven’t guessed them already. Firstly, the information I get for the Lower mainland homes is from MLS by taking the same snapshot (9 reverse clicks from Knight and Kingsway) every day at the same time Monday to Friday. Secondly, I only have statistics up to 1 million dollars when many of the homes in the lower mainland exceed that price point. Thirdly, when comparing year on year stats by price point you must take into consideration that since prices have moved up over that same amount of time then one must consider that fact when looking at comparisons.

The conclusion that I have drawn based on the most recent YOY numbers is that listings are WAY down. As I mentioned above, some of this is due to the increase in price but I still see a substantial decrease in listings (closing in on down 40% YOY). This is a very fascinating statistic since many of the Real Estate Board stats have shown sales decreasing at a steady pace over the past year. This leads me to believe that there is a huge shadow inventory on the market that will slowly be unleashed over the next year. I have no reason to believe that wide spread sales will pick up since any manner for people to get access to money will dry up further over the next several years (interest rates hikes, taxes, CMHC insurance regulations, consumer debt loads). When this inventory rears its head we will see supply finally begin to win the battle over demand which will send prices down where hopefully they get to more normal levels. This deleveraging will take a couple of years to fully realize.

For me this has been an exercise in watching a pot trying to reach a boil. The thing is eventually it will. But watching it certainly hasn’t sped things up.

If there is a positive response to this package of statistics then I will gladly send it to VCI every quarter or whenever it is deemed to fit well. I want to thank VCI and all of the other bear blog/forum sites that are fighting the good fight. I worry for our country over the next decade, but I think we’ll all be just fine in the end.

Best regards,

Eric

Click here to download the XLS file and please share any analysis you may do with the rest of us, either in the forum or here in the blog comments.

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jesse
Member

Interesting analysis. I graphed the map search data in the forum here.

The inventory over $800K is less stark YOY than the lower end stuff. I expect this is partly because there are now many more SFD listings above $1MM than before, and a reflection that prices are close to 10% above last years' levels.

Inventory is generally down compared to last year but it's not due to elevated sales numbers. There is simply less incentive to list right now, for whatever reason. My initial guess is that people don't need to list because rates are low (the 5 year mortgage renewal gap is negative), variable rates are still at emergency levels, and there isn't much in the way of massive oversupply witnessed in other North American cities.

patriotz
Member

IMHO it's less a matter of "need to list" than "want to list". Nobody wants to sell when prices are still going up. When they top out, watch the speculators head for the exits.

I also tend to disagree about oversupply – I think there's lots of it. It's just not listed yet.

Patiently Waiting
Member
Patiently Waiting

Many people can't survive now without tapping their home equity. Even if they did sell their home, they'd just buy an even more expensive one. Give it time, sweet time LOL.

Troll
Guest
Troll

@patriotz:

Nobody wants to sell when prices are still going up. When they top out, watch the speculators head for the exits.

Well, prices 'topped out' for almost a year last year and there was no rush for the exits. I think you'll need more of a trigger than that.

vangrl
Member
vangrl

k it's really depressing reading these Realtors comments at the bottom of this article. It's so obvious that mainland China is taking over the Westside neighborhoods (even though Garth still says there is no proof). Frustrating that the government doesn't do anything.

http://www.inman.com/news/2011/05/31/housing-pric

vangrl
Member
vangrl

and now we've made the Wall Street Journal!…..puke

http://online.wsj.com/article/SB10001424052702304

Johnny_O
Guest
Johnny_O
@vangrl: Depressing it should not be for your generation unless you just want to let yourself be caught up in the hype by the realtors. Like the WSJ article pointed out; the fact that jobs are/will become more in demand should be the silver lining for young families to avoid getting caught in the debt trap for now and simply save,save,save while you are renting and will be ready with cash when this RE speculative market comes crashing down. Which it will as per the WSJ article, when a city is unaffordable it doesn't imply that it's unaffordable for a minority. Au contraire, it has become unaffordable for the majority including those that bought pre-2002. And like the old farts like myself (where I still commute 2-3 days a week into Vancouver for my job)who vacated their old homes to… Read more »
Patiently Waiting
Member
Patiently Waiting

@Johnny_O: I don't see your "silver-lining". As Ladner points out, our community and economy is being hollowed-out.

When the crash hits, our city will be in dire straights for the better part of a generation. I agree that at some point there will be a buying opportunity, but not in the forseeable future.

As far as jobs being created, I can't believe how many require a foreign language like Mandarin or Korean 🙁

Leaving
Guest
Leaving
When the crash hits, our city will be in dire straights for the better part of a generation. I agree that at some point there will be a buying opportunity, but not in the forseeable future. _______ Agreed – its not like the corporate headquarters will flock back to Vancouver after a drop in prices nor will the city be flooded by bright, young professionals from the rest of Canada and from around the world. This city will ALWAYS be founded on some form of speculation, because we generate nothing of value. We will be a "Starbucks & Chapters" service economy for many many years. And as for all those jobs materializing from retirements, we have have been hearing that tune for over a decade now. Freedom 55 was wiped out in the dot.com crash, and baby boomers will be… Read more »
Patiently Waiting
Member
Patiently Waiting
From the Inman story: "PECK: We have had to hire significantly more support staff to keep up with the increased number of transactions. We have seen a surge in the number of new Realtors joining the profession as well, and they are younger than before — particularly those from Asian countries. Brokerage models have not adapted too much to changing demographics, meaning that large brokerages with several hundred agents remain core to the business. While sales prices might be skyrocketing, commissions have not kept similar pace. Those new entrants are willing to do more work for less money in order to get a foothold into the market. The conventional paper mail-out through the local postal service is now being superseded by social media and Internet advertising. This represents less cost, but is a more time-consuming approach to marketing; which, naturally… Read more »
Tim
Guest
Tim

I've been visiting with US relatives lately and just realized how widespread the fallout of the US housing bubble is. I have relatives walking away from their house and others that feel "trapped" despite easily being able to afford their housing costs and still being able to travel. Just the psychological weight of owing more than a house is worth seems to be draining.

I remember how people in Vancouver viewed property, especially condos at the end of the nineties. After a long market decline, when everybody "knows" that property is a bad investment, that's when it will be the best time to buy.

bubbly
Member
bubbly

QE3 is coming, because "we are on the verge of a Great, Great Depression" – says Peter Yastrow, the "World's largest libor trader" (so it's probably nothing).

http://bit.ly/ioMREX

Realtors say that everything is OK. Get out, talk to your mortgage broker and buy some damn property!

Tiki
Guest
Tiki

ouch…this blog is quiet…only a handful of bears left now..

must be tired of saying the same thing for 5 years as prices just kept on going up

jesse
Member

@Tiki: "must be tired of saying the same thing for 5 years"

LOL. Think positive! People who live in Nanaimo and Kelowna who occasionally read here and subsequently refused to buy at high prices have benefited.

WFT?
Guest
WFT?

Young anesthesiologists are leaving BC, in part, because of the high cost of living. And anesthesiologists are not moving here from other provinces any more. The shortage has been really bad for the last decade. And what has happened to housing prices over that time?

http://www.youtube.com/watch?v=4XQjyXribD0&NR

WFT?
Guest
WFT?

@Tiki:

Agreed. You can only talk about rising prices so long. It is now time to talk about leaving.

jesse
Member

CBC: Canada's personal debt rises

Canadians rang up five per cent more in personal debt in the first three months of 2011 compared with 2010, according to a report released Wednesday.

TransUnion, a Chicago-based credit specialist, said the average Canadian had almost $26,000 on his or her credit card, bank lines of credit and other borrowing vehicles — excluding mortgages — during the January-to-March period. That amount represented a jump of more than $1,200 compared to the same three months one year earlier.

Yeah…

jesse
Member

@vangrl: Agree, that Inmam article has some great quotes. Here's one of my favourites:

While most commissions we see being charged on paper are quite typical, we do see a lot of discounting on closing deals, with rebates to both buyers and sellers. This is quite typical of new immigrants expectations in this marketplace.

You mean immigrants call a spade a spade and realise Realtors and their agencies are attempting to overcharge on sales commissions? This is clear evidence that immigrants bring great things to Canada — in this case ruthlessly negotiating with an industry that has been milking home buyers and sellers for a while now. To this I say bravo!

Patiently Waiting
Member
Patiently Waiting

@jesse: The last time I seriously considered buying was 3-4 years ago. My options were a condo or townhouse in New West or Tricites, or an SFH further out in a place like Mission.

Considering all costs, I would've taken a modest loss if I bought the condo or townhouse. I'm including all fees, taxes, opportunity costs, risks of ownership and inflation.

If I bought out in Mission I'd be totally screwed by now.

So, no, I don't regret being a bear 🙂

WFT?
Guest
WFT?

@jesse: "$26,000 on his or her credit card, bank lines of credit and other borrowing vehicles — excluding mortgages "

Wow! That is a lot of debt. Maybe they beileve the banks when the banks tell them that they should save be taking on debt!

Anonymouse
Guest
Anonymouse

@jesse:

Commissions are always negotiable, and Canadians have always had the opportunity to propose their own commission structures to the agents involved.

Bear Vancouverite
Guest
Bear Vancouverite

@Anonymous "Commissions are always negotiable, and Canadians have always had the opportunity to propose their own commission structures to the agents involved."

That may be true, but I'm not sure if you've ever seen hardcore Asians negotiating, it gets pretty ridiculous, and many of them are more than willing to walk away to find another Realtor – they know eventually someone will be willing to do it at the price they are willing to pay. Seems funny when they are paying so much more than they should for our real estate, but I guess there's no logic to all this.

sore loser
Guest
sore loser

@jesse:

$26K per average Canadian… WOW, that'salmost $80K per family of three.

So If I don't have any debt,that means my neighbors owe $160? I can see that with home equity loans and such….

But still, WOW!

Devore
Member
Devore

@Patiently Waiting:

Just another reason for old-school realwhores to keep crapping their pants.

These geezers can't even learn from millenia of guild, trade union and professional association history how to build a monopoly. Now they have foreign labour undercutting them in their own house. While the average realtor may be making barely enough to qualify as part-time employment, per-transaction costs are very high. Places like 1% realty and discount brokers must be doing good business.

Ravishing Rick
Member
Ravishing Rick

Cut the music!

@ Troll – if we hung you for being intelligent we'd be hanging and innocent man.

What bear theory doesn't seem plausible? Price to Income ratios are at extremes? Rental yields are low? Cap Rates suck? Inventory is building? Calgary is down 12% from its highs?…

Yeah these really dona't sound like statements of observable fact and more like unlikely X-files conspiracy theories… moron

Hit the music!

wpDiscuz