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.

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"Vendetta"
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"Vendetta"

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…

DaMann
Member
DaMann

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…

pricedoutfornow
Guest
pricedoutfornow
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… Read more »
Anonymouse
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Anonymouse

So if they're forecasting price declines does that mean you can stop calling them pumpers now?

Devore
Member
Devore

@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.

Anonymous
Guest
Anonymous

and you know this for sure or just guessing as many here have for many years.

Anonymouse
Guest
Anonymouse

@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.

Dabster
Guest
Dabster

@DEFAULT NAMEe:

I don't get it, what's your point dude?

YLTN @ Work
Guest
YLTN @ Work

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???

Boombust
Guest
Boombust

CYA time in the making. That's all, folks.

Johnny_O
Guest
Johnny_O

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 … 🙁 !!!

whydoItry
Guest
whydoItry

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?

Troll Be Gone - Now
Guest
Troll Be Gone - Now

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…

chip
Guest
chip

@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.

Anonymous
Guest
Anonymous

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.

patriotz
Member

@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.

Best place on meth
Member
Best place on meth

@DEFAULT NAME:

The writer of the courier article/advertisement is a realtor.

There is no point even reading it.

Anonymouse
Guest
Anonymouse

@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.

cgh
Guest
cgh

@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

Manson
Guest
Manson

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.

4SlicesofCheese
Guest
4SlicesofCheese

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.

Jim
Guest
Jim

There's no sustainability like a housing market where the median wage earner can choose from one of a handful of crappy condos. 🙂

Best place on meth
Member
Best place on meth

@Manson:

Thanks Manson.

Now piss off.

Keeping An Eye On Th
Guest
Keeping An Eye On Th

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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