BCREA Calls for Price Drops. WAIT WHAT?
BCREA in a recent report is forecasting “stability” in the housing market, but at the same time is also forecasting (average) price drops in most areas:
After declining 12 per cent in 2010, residential unit sales through the Multiple Listing Service® (MLS®) in BC are forecast to rise by 3 per cent to 77,000 units in 2011 and a further 4 per cent to 80,000 units in 2012. However, BC home sales will remain relatively low by historic measures, falling short of their 10-year average of 87,600 units. While low mortgage interest rates are expected to persist through 2012 accommodating housing demand, headwinds in the global economy will act to restrain BC economic and employment growth.
BC economic growth slowed from an Olympic charged 3.8 per cent in 2010 to a forecast 2.1 per cent this year. Lackluster economic performance is largely the result of weaker than expected US economic activity, some belt tightening and deleveraging by households, and the Euro-zone debt crisis. Employment growth in the province is estimated to fall to 1.1 per cent this year. While emerging Asian markets have tilted some BC exports in an upward trajectory, domestic demand has stagnated. Retail sales in the province are estimated to increase just 1.5 per cent this year after climbing 5 to 6 per cent per annum over much of the last decade. Against this backdrop, moderate consumer demand for housing and relatively flat home prices are forecast through 2012.
Despite more moderate consumer demand, average home prices have climbed dramatically this year. The average annual BC MLS® residential price is estimated to increase 12 per cent to $564,600 in 2011. Rather than reflecting market conditions, the upward skewing of average price data was the result of a change in regional demand patterns and a shift in the mix of home types sold rather than as a result of a return to pre-recession market froth. By the winter months, most of the upward bias in average price data will have dissipated which will contribute to the average annual BC MLS® residential price decline of 2.5 per cent to $550,500 in 2012.
For flat to falling prices, that means months of inventory averaging about 6 for the entire year. That means longer times to sale and more delistings.
November 10th, 2011 at 1:32 am 1
Whatever…this market is so screwed up prices will probably keep going up….
There is no political will to change anything…
There are times in the political system that leaders should be tried and sentenced as traitors…..
Purposely leading you country into economic chaos when you know, or for bloody sakes should know, the consquences of your misguided economic policies should be one of those situations…
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November 10th, 2011 at 2:19 am 2
I keep having an friendly argument with my wife about the Chinese money influence in Vancouver. I don't think it has much to do with the rise in prices. I keep telling her it's cheap money
""Other cities include: Edmonton with 165 per cent, Saskatoon with 163 per cent, Winnipeg with 158 per cent, Kelowna with 156 per cent, St. John's with 149 per cent, Greater Vancouver 128 per cent and Calgary with 126 per cent."
http://ca.finance.yahoo.com/news/Canadian-housing…
Everything in Canada has more than doubled in the last 10 years. If it were only Vancouver that doubled then I would maybe agree. The correlation in all this is cheap easy money, that's it. Unless of course the rich Chinese are bidding up Regina…
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November 10th, 2011 at 2:20 am 3
I've had some interesting conversations with clients these last few weeks. I work in the financial industry and we are well aware that several of our clients have way too much debt (yes, a lot of it is bad decisions regarding real estate investments). We have a list of those we anticipate will be going bankrupt in the next 1-2 years. However, we've had a few surprises-people who we thought were fine financially are calling up and confessing that they are facing financial problems-credit card debt, loc debt etc. It's quite surprising to hear from these people that things are not so good after all. In terms of bankruptcies, we've seen it coming for a few years now, but it only seems to be about now that people are facing the inevitable. Before they could run through savings, cash out RRSPs, run up that LOC in hopes that things would turn around. But now there is no money/credit left. The end of the line is here, it's strange how it seems to be coming to so many people at the same time-I would expect to see a flood of bankruptcies over the next two years. I can't see how the housing market will continue the way it has, people are tapped out now.
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November 10th, 2011 at 2:44 am 4
So if they're forecasting price declines does that mean you can stop calling them pumpers now?
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November 10th, 2011 at 2:54 am 5
@pricedoutfornow: A few hundred thousand in equity can cover up a lot of sins. That's the hail mary, hoping things get better soon, once you go down that path. Plenty of people who bought for $2-300k years ago, now owe more than they started with, instead of having paid off houses.
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November 10th, 2011 at 2:59 am 6
and you know this for sure or just guessing as many here have for many years.
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November 10th, 2011 at 3:46 am 7
"The correlation in all this is cheap easy money, that’s it."
Cheap easy money comes from all over the world; Vancouver obviously has been the benefactor of some of this international money. We'll see how "cheap" and "easy" this capital will be in the next 5-10 years!
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November 10th, 2011 at 4:17 am 8
@DEFAULT NAMEe:
Vote me down all you like, but the point I'm making is that the BCREA has so far been infinitely more accurate in their estimates than any of you.
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November 10th, 2011 at 5:01 am 9
@DEFAULT NAMEe:
I don't get it, what's your point dude?
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November 10th, 2011 at 5:23 am 10
Off topic, but I am more amazed each time I see Obama afraid to make a tough decision… he is starting to look like Mayor Moonbeam!
http://www.bloomberg.com/news/2011-11-10/obama-ad…
Delaying the XL decision until after the election. Nice, if you get voted in by the environuts who cheered your delay you can screw them after you have guaranteed 2 years. If you lose, no worries, the crazy right-wingers will push the pipeline through.
On the bright side, perhaps this will help Northern Gateway go through???
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November 10th, 2011 at 5:28 am 11
CYA time in the making. That's all, folks.
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November 10th, 2011 at 5:31 am 12
Can someone please tell me what’s going on? WTF’s going on!!!
I was told real estate is the safest investment long term. And after reading this blog 6 years ago I thought you were all a bunch of clueless snotties waiting for something that would never materialize.
I bought 2 pre-sales last year thinking the water is safe since you’ve all been forecasting doom that never would come. But I ‘m already $40k under water! Why!!! Why now!!! The realturd said I would make $25k easy per unit.
So what is going on …
!!!
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November 10th, 2011 at 5:37 am 13
Translate that into everyday English. I'm assuming that the report is saying that people are moving from the outer neighborhoods into the inner city and moving from condominiums to single family homes. That's why the average is so high with the lower volume of sales?
I think?
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November 10th, 2011 at 5:37 am 14
Can someone please tell me what’s going on? WTF’s going on!!!
______
Maybe you should join your "underwater" condos and go away troll….
Nobody is taking the bait…
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November 10th, 2011 at 6:00 am 15
@YLTN @ Work:
"Delaying the XL decision until after the election. Nice,"
When the Solyndra scandal was about to break the WH rushed through billions in more solar subsidies before anyone could stop them.
Yet, when all they need to do is step aside to allow billions in private sector investment and tens of thousands of jobs, well, can't have that now, can we.
Idiots.
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November 10th, 2011 at 6:21 am 16
Prices down? Now's your opportunity to jump in!
"Downsize while condos remain relatively cheap", Vancouver Courier, Nov 9/11.By Deb Abby, Contributing Writer.
http://www.vancourier.com/Downsize+while+condos+r…
"Contributing Writer", I guess you that means you need to contribute ($) before you can write.
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November 10th, 2011 at 6:25 am 17
@Johnny_O:
"I was told real estate is the safest investment long term. "
It is, because it's easier to determine the right price to pay for RE to make you money than other investments.
"Safe" does not mean "idiot-proof". No investment can protect people who pay more for it than it's worth.
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November 10th, 2011 at 6:28 am 18
@DEFAULT NAME:
The writer of the courier article/advertisement is a realtor.
There is no point even reading it.
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November 10th, 2011 at 7:23 am 19
@Dabster:
"I don’t get it, what’s your point dude?"
When they were predicting price rises everybody just said they were "pumpers". Another way of looking at it, now it seems they're not just pumping, is that they were "accurate". At least more accurate that anybody here.
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November 10th, 2011 at 7:28 am 20
@Best place on meth:
Haha, you're right! Her site is abbeypartners.ca.
She's reprinted the article/ad in her blog. Here's the first line:
"I know that the benchmark price for a detached house in Greater Vancouver has increased by almost 25 per cent in the past year, but really, it’s a buyers’ market!"
W
T
F
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November 10th, 2011 at 7:48 am 21
Don't worry folks…none of you will be able to afford a nice place in Vancouver no matter how far prices fall.You guys should really be looking in Whalley.Cheers.
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November 10th, 2011 at 7:49 am 22
Deb Abbey is a real estate agent at Royal LePage City Centre in Vancouver.
She is the author of two best-selling books on SUSTAINABLE INVESTMENT.
Wow.
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November 10th, 2011 at 7:50 am 23
There's no sustainability like a housing market where the median wage earner can choose from one of a handful of crappy condos.
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November 10th, 2011 at 8:04 am 24
@Manson:
Thanks Manson.
Now piss off.
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November 10th, 2011 at 8:25 am 25
BCREA is far too bearish.
The report doesn’t take into account that Christy Clark just kicked down a few doors in China and is now headed for India.
Soon the remaining tycoons in Asia who hadn’t received our calling card during the Olympics will be opening their purchase orders.
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November 10th, 2011 at 8:38 am 26
@cgh:
:She’s reprinted the article/ad in her blog. Here’s the first line:
“I know that the benchmark price for a detached house in Greater Vancouver has increased by almost 25 per cent in the past year, but really, it’s a buyers’ market!”"
I honestly wonder if these people are sitting around at home drinking wine and laughing their ass off when they write this shit. How can you take yourself seriously? Or they really are delusional!
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November 10th, 2011 at 9:16 am 27
Cut the music! Li Kai shing and bubba are the men in charge here!! Vote up if you disagree and vice versa
Hit the music!!!!!!!
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November 10th, 2011 at 9:18 am 28
Another Doom and Gloom circle jerk going on here today?
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November 10th, 2011 at 10:17 am 29
Long time no visit. How's everyone doing? I'm fine, thank you. Renting, in a word, is AWESOME. I can not adequately convey how much fricken money I'm saving over the nimrods all around me who've laid down $700,000 and up (plus interest, plus property taxes, plus repairs, plus loss of equity as this fattened hog of a bubble deflates) for similar accomodations next door.
So, this "Deb Abbey" chick needs a stern talking to. Like the infamous 2006 National Association of Realtors ad titled "It's a Great Time to Buy *or* Sell a home" (http://www.burbed.com/2006/11/06/its-a-great-time-to-buy-or-sell-a-home-the-ad/), Abbey's article is a deceptive yet wholly vague lump of steaming poo that says basically nothing yet will ultimately come across to the few remaining believers as one more reason they need "to get their real estate groove on."
The Courier also needs a counterpoint. And dammit, I'm just the guy to do it. Do any of you who reside in Vancouver proper know if this paper is still relevant? Does anyone read it?
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November 10th, 2011 at 10:59 am 30
@Keeping An Eye On The Pimps: "Soon the remaining tycoons in Asia who hadn’t received our calling card during the Olympics will be opening their purchase orders."
I remember the same story when the Japanese were in BC looking to buy up all raw materials exports. That turned out well. China's different because they're different.
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November 10th, 2011 at 11:10 am 31
New Listings 158
Price Changes 87
Sold Listings 107
TI:15739
http://www.laurenandpaul.ca
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November 10th, 2011 at 11:20 am 32
@jesse:
China is different.
More fraud, lying, cheating and stealing than any country in history.
They'll end up far worse off than Japan.
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November 10th, 2011 at 11:36 am 33
@Best place on meth: Olympus
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November 10th, 2011 at 11:44 am 34
@jesse:
Sino Forest
Longtop
Silvercorp
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November 10th, 2011 at 12:15 pm 35
@jesse:
I'm not 100% sure, but didn't we end up supplying the Japanese with coal for less than production cost?
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November 10th, 2011 at 1:02 pm 36
@Best place on meth: Agree China has some significant headwinds due to its less-mature rule of law and property rights, just pointing out that Japan has never really smelled of roses either.
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November 10th, 2011 at 1:22 pm 37
@paulb.: 67.7% sale/list ratio, better than yesterday but still not great for this time of the season… Looking forward to see what the inventory numbers will look like in spring!
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November 10th, 2011 at 1:29 pm 38
@jesse:
Yes, which is big reason why Japan is where it is today – paying for their sins.
By the way, referring to China's "less-mature rule of law and property rights" is a very polite way of describing their lying, cheating and stealing.
Well done.
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November 10th, 2011 at 1:44 pm 39
@Gordholio
Funny you ask, I was waiting for my lunch and there were courier, strait and some other paper laying around all had developer ads all over them.
Actually I overheard some ppl flipping thru the courier and talking about the cambie corrider. So when they left I took a look and saw the Deb article.
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November 10th, 2011 at 1:52 pm 40
@Makaya:
"Looking forward to see what the inventory numbers will look like in spring!"
if I had a dollar for every time I heard that one I could buy a SFH in Vancouver
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November 10th, 2011 at 2:09 pm 41
@Best place on meth: "their lying, cheating and stealing"
It's not appropriate to paint all immigrants with this brush. Without living there and experiencing inequality you really don't know the perspective some immigrants have. My old neighbours came to Canada because they wanted to start a family. They were not rich and part of the reason was because they lost a lot of their savings to corruption. For every crook there is at least one victim.
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November 10th, 2011 at 2:16 pm 42
Boy..lots of rude c*cksuckers and assh&les on this F4kkin blog.
Get some manners you pryxxxs.
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November 10th, 2011 at 9:55 pm 43
@Best place on meth:
"They’ll end up far worse off than Japan."
As if they weren't far worse off than Japan right now.
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November 11th, 2011 at 2:22 am 44
"describing their lying, cheating and stealing."
I am glad we are so honest over here…
Bre X
Nortel
and in the US
Enron
Madoff
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November 11th, 2011 at 8:49 pm 45
@gordholio:
gord, you should know better
NO paper in vancouver is relevant anymore
this city is illiterate and proud of it
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November 13th, 2011 at 9:00 am 46
[...] see how the housing market will continue the way it has, people are tapped out now.” – pricedoutfornow at vancouvercondo.info 10 Nov 2011 10:20am Share:TwitterFacebookRedditStumbleUponDiggLike this:LikeBe the first to like this post. This [...]
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November 13th, 2011 at 3:57 pm 47
[...] “I’ve had some interesting conversations with clients these last few weeks. I work in the financial industry and we are well aware that several of our clients have way too much debt (yes, a lot of it is bad decisions regarding real estate investments). We have a list of those we anticipate will be going bankrupt in the next 1-2 years. However, we’ve had a few surprises-people who we thought were fine financially are calling up and confessing that they are facing financial problems-credit card debt, loc debt etc. It’s quite surprising to hear from these people that things are not so good after all. In terms of bankruptcies, we’ve seen it coming for a few years now, but it only seems to be about now that people are facing the inevitable. Before they could run through savings, cash out RRSPs, run up that LOC in hopes that things would turn around. But now there is no money/credit left. The end of the line is here, it’s strange how it seems to be coming to so many people at the same time-I would expect to see a flood of bankruptcies over the next two years. I can’t see how the housing market will continue the way it has, people are tapped out now.” – pricedoutfornow at vancouvercondo.info 10 Nov 2011 10:20am [...]
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