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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[…] “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… Read more »
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[…] 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 […]

Anonymous
Guest

@gordholio:

gord, you should know better

NO paper in vancouver is relevant anymore

this city is illiterate and proud of it

x
Guest
x

"describing their lying, cheating and stealing."

I am glad we are so honest over here…

Bre X

Nortel

and in the US

Enron

Madoff

patriotz
Member

@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.

Donald Trump
Guest
Donald Trump

Boy..lots of rude c*cksuckers and assh&les on this F4kkin blog.

Get some manners you pryxxxs.

Conrad
Guest
Conrad

@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

4SlicesofCheese
Guest
4SlicesofCheese

@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.

Best place on meth
Member
Best place on meth

@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.

Makaya
Member
Makaya

@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!

Keeping An Eye On Th
Guest
Keeping An Eye On Th

@jesse:

I'm not 100% sure, but didn't we end up supplying the Japanese with coal for less than production cost?

Best place on meth
Member
Best place on meth

@jesse:

Sino Forest

Longtop

Silvercorp

Best place on meth
Member
Best place on meth

@jesse:

China is different.

More fraud, lying, cheating and stealing than any country in history.

They'll end up far worse off than Japan.

paulb.
Guest
paulb.

New Listings 158

Price Changes 87

Sold Listings 107

TI:15739

http://www.laurenandpaul.ca

gordholio
Member
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.… Read more »
Annonymous
Guest
Annonymous

Another Doom and Gloom circle jerk going on here today?

sir
Guest
sir

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!!!!!!!

DaMann
Member
DaMann

@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!

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.

Best place on meth
Member
Best place on meth

@Manson:

Thanks Manson.

Now piss off.

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. 🙂