The month with no sales.

Inventory says.. Not a single new home sold on the west side in September, first zero sale month going back to 1994. Here’s the historical data:

Vancouver West New Home Sales September
YEAR = SALES / LISTINGS
1994 = 15 / 79
1995 = 16 / 157
1996 = 9 / 173
1997 = 12 / 126
1998 = 4 / 90
1999 = 4 / 35
2000 = 6 / 30
2001 = 2 / 35
2002 = 4 / 25
2003 = 14 / 43
2004 = 8 / 48
2005 = 15 / 43
2006 = 5 / 43
2007 = 4 / 42
2008 = 4 / 93
2009 = 11 / 74
2010 = 9 / 61
2011 = 0 / 77

Even the minicrash of 2008 saw four sales of new homes on the west side. The worst September for new home sales was back in 2001.

VMD also notes Burnaby sales are not looking so hot:

[Confirmed: Burnaby Sept/11 SFH Sales Lowest in 5+ years. 60% of last year, 1/3 of 2009, lower than 2008 levels]
2011: 46 (I predicted 45 on post #2)
2010: 75
2009: 127
2008: 51
2007: 81

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Li Kai Shing
Guest
Li Kai Shing

ffffirrrrrrssstttttt I tink

Madashell
Guest
Madashell

Maybe all the Cam Good helicopters are grounded due to bad weather.

jesse
Member

What are the thoughts: are people waiting for HST to be repealed? I'd say, given the target market for these properties, the high price level, and the commensurate 7% costs, yes there must be some impact.

Prediction: "We pay the HST" will start popping up in ads.

Oh, and look at the construction permits issued in the City of Vancouver. I summarized them here. Summary: detached dwelling permits granted in July and August are the highest in recent memory. These are houses that are currently being built and likely won't be completed until 2012. There are lots of new detached properties being built right now; how many do you think are spec builds?

Pipa
Guest
Pipa

TSX down 3%

major cdn banks all down around 3%

flerhty looks panicky today

900kCrackHouse
Guest
900kCrackHouse

With these markets, I wonder if anyone is starting to freak out at their huge mortgage debts.

I don’t understand why anyone in their right mind after watching the big housing crash in the US would buy the hype and have bought into this market in the last 6 months. They are going to be screwed BIG TIME!

VanRant
Guest
VanRant

@Pipa: Perfect storm, looks like the stock market, Housing Bubble, Jobs, Economy, etc, are all blowing up in Flaherty's face, while he's in office. Can't happened to a better guy.

900kCrackHouse
Guest
900kCrackHouse

Guys, I'm going to start volunteering at the soup kitchen. When I see Cam Good, Ozzie, Sumerland, Rennie in line, that is when I buy.

painted turtle
Guest
painted turtle

Friday evening dinner: everyone talking about moving their pension plan into bonds. They did not even trust the "balanced" funds. Most lost a few $1000 in the last 2 months and pessimistic.

I meet with my banker tomorrow to move my stuff. No hope to see things getting better in the near future. I am gald most my money is in land.

The boomers I am meeting at work are tensed, and find their daily work routine surreal compare to their worries. Most have big mortgages and nowhere to park their life savings, except cash. But may be it is just the rain.

I once thought that when Vancouver real estate starts crashing, tons of fence seaters would be jumping in. Well. One needs confidence in the future to do this…

900kCrackHouse
Guest
900kCrackHouse

Another point of interest…

If a $2 million dollar westside home drops by $1000 / day for the next year, what price does that make it? $1,635k. Thats a price reduction of only 18%.

If it drops by $1000 / day for another year that brings us to a very affordable $1,270k. Thats a price reduction of $36.5%.

You have to work pretty damn hard to make $1000 / day 365 days / year.

Pipa
Guest
Pipa

painted turtle Says:"I meet with my banker tomorrow to move my stuff."

excellent move. i did that a week ago and I am happy. markets are imploding. look on friday Kodak lost 80% in share price and there was talk of bankruptcy. This morning in Europe big financial Dexia was in nationalization rumors. Then when US markets open American Airlines lost 40% od stock value and there was talk of bankruptcy. Then in the afternoon US financials got killed, all 7-8% down, canadian banks 3% down..What to expect tomorrow other then more of the same…economic system is de-leveraging with debt deflation.

patriotz
Member

@900kCrackHouse:

"With these markets, I wonder if anyone is starting to freak out at their huge mortgage debts."

I don't think so.

People are paying absurd prices for RE precisely because they think it's immune to the downswings seen in the stock market.

"I don’t understand why anyone in their right mind after watching the big housing crash in the US would buy the hype and have bought into this market in the last 6 months. "

That's the one that's always puzzled me. I thought most people going to realize that the jig was up in 2008. On the contrary, they think that Canadian RE is even more bulletproof.

DaMann
Member
DaMann

@900kCrackHouse:

"that brings us to a very affordable $1,270k."

Wow, $1.27 million is very affordable?

bubba
Guest
bubba

I smelt a rat at the spring RE pump fest…..in HAMville…when houses were shooting up over $1 Million in West Richmond.

Then some realtor/s got caught trying to flip, pissing off owners who thought they had sold.

The "fall" started back in the "spring".

bubba
Guest
bubba

HST is a false flag/red herring in these markets.

Why worry about 7% of Tax if the properties values are getting 25%+ haircuts?

Anonymous
Guest
Anonymous

@Li Kai Shing:

WTF LKS? Why are you even here still? Don't you know when you're not wanted? You had a few funny posts way back, but nothing but noise ever since. Hit the bricks!

Noodlevan
Member
Noodlevan

@patriotz,

"People are paying absurd prices for RE precisely because they think it’s immune to the downswings seen in the stock market."

while that may be correct, I can't imagine people's confidence about future prospect (job security, abitlity to sustain current income level etc.) not being affected by the declining markets. That is – if I have a huge mortgage, while I may not be concerned about the declining asset value, I would be very concerned about my ability to continue servicing the loan.

Vansanity
Guest
Vansanity
I agree with the HST argument… would buyers really be that concerned over 7% savings while having to then wait for 2 more years for it to kick in? These are buyers we're talking about. Not the most prudent thinkers. This is the perfect storm. All the eternal optimists and denialists are pointing to 2008. However, in 2008 govt's slashed rates in unison in an emergency meeting that one fateful Sunday, unprecedented. Markets eventually bounced back and beyond. Well now what? What can the gov't do? In Canada we can slash our rates to 0% as they have in the US. Will that generate demand? Perhaps internally to a minor extent but not if those finished goods can't be sold abroad. If global demand craters the commodities markets, save for gold, and the US recession craters manufacturing, Canada is in… Read more »
pipewrench
Member
pipewrench

Deflation is at hand and all money is running for safety. I really wonder if Europe and the US are out of bullets because if they fire off another stimulus and it does nothing the jig is up.

take care of your money and keep liquid. Van is toast and day old now.

Not much of a name...
Member
Not much of a name...

@jesse:

What are the thoughts: are people waiting for HST to be repealed? I’d say, given the target market for these properties, the high price level, and the commensurate 7% costs, yes there must be some impact.

It is interesting. The thing that I find funny about this is that the "target market" is one that is apparently concerned over $140k of tax on a $2M house, yet at the same time, this "target market" is willing to get into bidding wars on properties and pay $200k plus over list on houses. Strange indeed.

Anonymous
Guest
Anonymous

Globe and Mail:Oversupply cuts price for Yaletown condo

http://www.theglobeandmail.com/life/home-and-gard

AG Sage
Member

@Not much of a name…: In all fairness to the theory, human behavior on pricing is no logical.

For example, a 3% credit card fee on top of the purchase, makes people angry, but set the price 3% higher and give a discount for cash and people (even those using a CC) are happy.

space889
Member
space889

Hey, there is a post over the weekend about the Richmond development Quintet paying $50/hr to fake buyers to line up and fake interest in the development. Just curious, where do they find these people and how do I sign up? $50/hr is more than my current hourly rate as a senior software engineer!

jesse
Member

@Vansanity: "would buyers really be that concerned over 7% savings while having to then wait for 2 more years for it to kick in?"

I think they would. Look at it this way: if expected inflation is right around zero and "everyone" is crowding into risk-free low-yielding assets like USTs and Vancouver housing (!) — flying to so-called stores of wealth — then current nominal prices should reflect expected future nominal prices. If you suddenly add in 7% tax, that's an immediate 7% loss. No wonder speculative buyers are balking.

Now if the "store of wealth" argument starts showing weakness, the 7% tax will be the least of buyers' (and sellers') concerns.

jesse
Member

@Vansanity: “would buyers really be that concerned over 7% savings while having to then wait for 2 more years for it to kick in?”

I think they would. Look at it this way: if expected inflation is right around zero and “everyone” is crowding into risk-free low-yielding assets like USTs and Vancouver housing (!) — flying to so-called stores of wealth — then current nominal prices should reflect expected future nominal prices. If you suddenly add in 7% tax, that’s an immediate 7% loss. No wonder speculative buyers are balking.

Now if the “store of wealth” argument starts showing weakness, the 7% tax will be the least of buyers’ (and sellers’) concerns.

Not much of a name...
Member
Not much of a name...

@AG Sage: I know what you mean, however, consumers have a right to be angry if a vendor adds a 3% charge for accepting credit cards. That goes against the agreement the vendor has with credit card processing company. But that's another topic for another day.

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