The Housing Bottom is There
Bill McBride over at CalculatedRisk has a simultaneously chilling and uplifting post on the US housing market:
There have been some recent articles arguing the “housing bottom is nowhere in sight”. That isn’t my view.
First there are two bottoms for housing. The first is for new home sales, housing starts and residential investment. The second bottom is for prices. Sometimes these bottoms can happen years apart.
For the economy and jobs, the bottom for housing starts and new home sales is more important than the bottom for prices. However individual homeowners and potential home buyers are naturally more interested in prices. So when we discuss a “bottom” for housing, we need to be clear on what we mean.
For new home sales and housing starts, it appears the bottom is in, and I expect an increase in both starts and sales in 2012…
And it now appears we can look for the bottom in prices. My guess is that nominal house prices, using the national repeat sales indexes and not seasonally adjusted, will bottom in March 2012.
The problem with using the house price indexes to look for a bottom is that they are reported with a significant lag. As an example, the recently released Case-Shiller index was for November and the index is an average of September, October and November – so it is a report for several months ago. The CoreLogic index is a little more current – the recent release was for December, and CoreLogic uses a weighted average for prices (December weighted the most) – but that is still quite a lag.
Both of those indexes will bottom seasonally around March, and then start increasing again.
What planet is McBride on anyways? For many Vancouver is different because it is inconceivable that it’s the same. Inconceivable.
February 6th, 2012 at 2:33 am 1
Are there any areas in the US that are still seeing a price/rent relationship that's up over, say 200x?
What, if any, impact will media coverage on a US housing market bottom have on a potential crash in Canadian RE?
If I were a betting man, my bet is that the majority of the pullback will happen faster than most of us (bears) expect.
FF
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February 6th, 2012 at 2:49 am 2
@DEFAULT NAME: Parts of the US home to the so-called "1%" has seen a milder pullback than other areas. Part of this is because job and wage growth on the high end has not been sluggish. To wit parts the Bay Area are only down 10-20% from their price peaks in 2006. Looking at price-rent ratios in areas like Manhattan show, in some cases, price-rent ratios comparable to Vancouver. But the devil's in the details, there are other factors at play in markets like Manhattan.
Not that this is justifying current valuations in Vancouver but just pointing out that the bust in the US has been far from homogeneous.
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February 6th, 2012 at 3:22 am 3
@jesse:
"just pointing out that the bust in the US has been far from homogeneous."
Which also has a lot to do with the bubble not being homogeneous, indeed not all of the country was in a bubble.
"What, if any, impact will media coverage on a US housing market bottom have on a potential crash in Canadian RE?"
None. Canadians didn't pay attention to news of the bust so I don't see why they would pay attention to news of a bottom. It's different here.
"If I were a betting man, my bet is that the majority of the pullback will happen faster than most of us (bears) expect."
Well that's what happened in 2008, nobody was predicting a decline that fast. Going forward, interest rates will most likely stay low, so we may well see a slower decline. But you never know. As I've said a commodities bust would be a real boat anchor.
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February 6th, 2012 at 3:24 am 4
In his defense, Bill McBride does say at the end of his post:
"And this doesn't mean prices will increase significantly any time soon. Usually towards the end of a housing bust, nominal prices mostly move sideways for a few years, and real prices (adjusted for inflation) could even decline for another 2 or 3 years."
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February 6th, 2012 at 3:34 am 5
Need some help please:)
Can anyone tell me what 1291 Morris Crescent (in Tsawwassen) sold for in 2010, I believe it sold around april or may of that year.
thanks in advance!
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February 6th, 2012 at 3:38 am 6
@Dan: "In his defense, Bill McBride does say at the end of his post"
FTR I think he has been reasonably accurate in his macroeconomic forecasting to date. Here he was a year ago, mentioning Canada only in brief passing:
http://www.calculatedriskblog.com/2010/02/new-hou…
Canada has a relatively minor impact on the US economy, as we will learn in due course. I think McBride calling the nominal and aggregate bottom in US Case-Shiller HPI is a good one. Canada is looking a wee bit out of phase with its largest trading partner.
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February 6th, 2012 at 3:39 am 7
Hello VCI community:
I am a long-time reader and infrequent poster, but I have a troubling dilemma I need some help with.
Like many of you, I am renting. I would suggest we are renting at the upper-end of the market (> $4K per month) based on my assessment of the market. We recently moved due to an expanding family into a large home.
Anyway – here is my question to you all:
We moved into the new place about a month ago. Recently, in a conversation with a neighbour, I was alerted to a gruesome murder that was committed in the bedroom I am now living in. I have confirmed that this occured.
Should I be upset with the agent that didn't tell me this ? (I am).
What should I do?
Best Regards,
VC
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February 6th, 2012 at 3:43 am 8
@Dan:
"real prices (adjusted for inflation) could even decline for another 2 or 3 years.”
Try decades. Look what the US now has:
- real house prices still above historic norms
- declining labour participation rate
- interest rates that can't get lower
- massive household debt (though now not as bad as Canada's)
- declining real wages for most workers
I don't see how you get rising real prices out of that.
Canada also has all of the above (real house prices way above norms of course), we're just behind the US by 5 or 6 years.
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February 6th, 2012 at 3:51 am 9
REBGV stats package (newlists, average/median, and sales by sub-region only). Benchmarks and total inventory aren't being released yet.
http://www2.topproducerwebsite.com/users/34449/do…
There are likely changes afoot to how the benchmark is being reported, we will have to see but trust me when I say that how the data are reported won't affect much. Nothing inference cannot fix, anyways.
Total inventory is being regularly reported by paulb. and is, with a slight adjustment factor, tightly aligned with the reported figures in past REBGV press releases. So failure to report total inventory is of no concern for us. Thanks again, paulb.!
Based on analysis by mohican there is a decent correlation between detached benchmark price changes and months of inventory. To calculate months of inventory we need inventory at the end of the month and total sales.
But all you really need to know is that an MOI of around 6 indicates flat prices, an MOI higher than about 7 means prices are falling and an MOI below 5 means prices are increasing. All the rest of the stats are just noise to keep data nerds like me busy and pass the long winter months. (And this is a darn long "winter"!)
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February 6th, 2012 at 3:56 am 10
@van_coffee: Nothing you can do about it. It has no material impact on the unit unless you believe in ghosts… DO you believe in ghosts?
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February 6th, 2012 at 4:02 am 11
January stats are trickling out in bits and pieces. Sorry don't have a link that doesn't promote a real estate agent.
Found this confusing info:
http://www.rebgv.org/housing-price-index?region=a…
and Listings/Sales:
http://www.rebgv.org/listed-vs-sold
My overall impression is certain specific markets might be crashing. Richmond, West Side and Burnaby in particular. West Van SFH to a lesser extent, but not West Van condos.
Some markets like East Van and Coquitlam show no clear trend yet.
North Van appears to be the one hot market with significantly rising sales and prices YOY.
Median condo prices are now down YOY in Richmond, Burnaby and Westside. SFH are down YOY in Richmond, and flat in Westside.
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February 6th, 2012 at 4:05 am 12
@van_coffee:
It's an unfortunate situation, and while anyone else would also be upset to my knowledge the agent actually had no legal obligation to inform you.
I was looking at renting a penthouse not too long ago. I took a look at one at the OMA condo near Brentwood in Burnaby and this was owned by a property management company. I remember vaguely reading about a murder in the area so I thought I would ask the property manager more details on it – didn't think it was actually in that building let alone that unit. I was appalled the PM didn't say anything about it, but I was told they had no legal obligation to do so unless asked. Not exactly a common question to ask – Is gas included? When does the pool close? Oh, was there a murder in here? Since I asked, she had to give me all the details. Apparently the day before the cleaners had just finished "cleansing" the place. She said if it was for sale, they are legally obligated to inform the buyer of such incidents – but not when renting it out.
Honestly had I not happened to catch that news article I wouldn't have asked and probably would've rented the place. I called the management company a week later out of curiosity and sure enough the unit had been rented out. With all that happens in the lower mainland, if you happened to miss the news you wouldn't even know it happened.
"Hello VCI community:
I am a long-time reader and infrequent poster, but I have a troubling dilemma I need some help with.
Like many of you, I am renting. I would suggest we are renting at the upper-end of the market (> $4K per month) based on my assessment of the market. We recently moved due to an expanding family into a large home.
Anyway – here is my question to you all:
We moved into the new place about a month ago. Recently, in a conversation with a neighbour, I was alerted to a gruesome murder that was committed in the bedroom I am now living in. I have confirmed that this occured.
Should I be upset with the agent that didn’t tell me this ? (I am).
What should I do?
Best Regards,
VC"
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February 6th, 2012 at 4:06 am 13
Jessee –
LOL.
Not yet, but my wife is getting me thinking…..
I know the person that rented it to us believes in Ghosts.
The only impact it has on the unit is the "weird people" treatment we get from everyone in the neighbourhood for living in the murder house…
You didn't answer the first part of my question? Would you be upset for them not telling you? Would you want to know? What happened to the Golden Rule?
Best,
VC
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February 6th, 2012 at 4:07 am 14
Patriotz, there is only one factor I can see causing decades of real declines and that would be demographics as America is roughly the same as us http://i42.tinypic.com/5np74.png
But nominally will of course be a different story.
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February 6th, 2012 at 4:09 am 15
Here is the latest stats release: http://www.laurenandpaul.ca/MarketTrends.ubr
You can see the new HPI near the bottom.
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February 6th, 2012 at 4:16 am 16
@van_coffee:
Sorry to hear about your dilemma. Most renters in Vancouver see 'debt' people.
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February 6th, 2012 at 4:21 am 17
@jesse: Yeouch! I love how you say prices in some areas are "only down 10-20%". That would be a loss of $100-$200k on a Vancouver house.
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February 6th, 2012 at 4:24 am 18
@PaulB – - Thanks for the link.
What I want to know is who has f—ed up the Whistler stats? There is no way that it has moved in the past 5 years as described in this table. 95% increase in apartment prics in 5 years? Really? I think they have it backwards – prob 50% fall.
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February 6th, 2012 at 4:33 am 19
I don't get this chart, is the 1 year +/- column the percentage that area has gone up or down in one year (feb 2011-feb 2012) ?
ugh, the whole thing is confusing to me
http://www.rebgv.org/housing-price-index?order=pi…
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February 6th, 2012 at 4:45 am 20
A quick note that the detached benchmark has changed its starting point so I will have to analyse the data a bit more (when I can get it in full) to see the impact, but if you hear the detached benchmark is now over $1,000,000, well it is… now. They changed the dataset and how they calculate it.
One thing I did notice is that the *new* detached benchmark increased more than the old one since 2007. Not that it matters much. As I mentioned, the price — however measured — is a lagging indicator of market distress. It matters eventually, of course, but not yet for many reading here I bet, only when you buy or sell!
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February 6th, 2012 at 4:54 am 21
Thanks Paul. I see you have a chart with average price on it near the bottom – are the average and median stats still available somewhere? I understand the problems with using them, but i kind of miss them already…
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February 6th, 2012 at 4:57 am 22
@Van Coffee, I would be furious!
Whats with this HPI?? It says the avg detached Van home is down .3% over the last 5 years. That makes zero sense whatsover.
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February 6th, 2012 at 5:01 am 23
No signs of the CNY in the stats…
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February 6th, 2012 at 5:13 am 24
@Supersogs:
Well, how does it affect you? Me, I'll take the 30% cut in price and leave some wind chimes out for the ghosts to play with.
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February 6th, 2012 at 5:32 am 25
Anyone else hear this ad?
"Situated in the heart of Downtown Langley, Serenade is located adjacent to Douglas Park just steps from shops, restaurants … It's free and anyone can join. …. We'll Give You a Brand New Car"
Free car = desperation.
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February 6th, 2012 at 5:47 am 26
This might be an awfully stupid question, but didn't the REBGV news releases previously publish average price data?
If not then i had too many drinks at lunch today.
If they did then they have systematically gone through all old news releases and stats packages on their website and replaced it with HPI data.
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February 6th, 2012 at 5:49 am 27
@Dyugle:
Here's the new car.
http://cdn.greenprophet.com/wp-content/uploads/20…
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February 6th, 2012 at 6:23 am 28
He might have a point. The Case Shiller is almost back to 1950's levels:
http://postimage.org/image/j129txrhj/
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February 6th, 2012 at 6:30 am 29
So over the last five years, condo apartments in the Lower Mainland have gone up 10% according to benchmark.
Someone who bought a condo for $300K in 2007, might get $330-340K if they sold it today. After all these years of paying the ownership premium, that amounts to a significant loss. Renters who kept their down-payments in savings accounts did much better.
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February 6th, 2012 at 7:08 am 30
FVREB Stats are out:
http://www.fvreb.bc.ca/mls-statistics.php
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February 6th, 2012 at 7:15 am 31
Yep..Big Crash happening..
http://www.cbc.ca/news/business/story/2012/02/06/…
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February 6th, 2012 at 7:36 am 32
@Patiently waiting
Doesn't sound like a "Bubble" to me.
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February 6th, 2012 at 7:38 am 33
@Independentwealth: "The index rose 0.27 per cent from December, driven by stronger results in Montreal, Toronto and Vancouver." – CBC
Nice reporting! Vancouver prices declined in January compared to December.
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February 6th, 2012 at 7:53 am 34
@DEFAULT NAME: "“The index rose 0.27 per cent from December, driven by stronger results in Montreal, Toronto and Vancouver.” – CBC
Nice reporting! Vancouver prices declined in January compared to December."
That's the beauty of the new index, you can make up the numbers as you wish. CREA and all the local REB are just deceiving people. This index is a fraud. Now the temperature of the RE market is cooling, they're changing the thermometer. Who are they kidding really?
I wouldn't like to be in their shoes when people start realizing that the reported "prices are going up" results in lower sale price for their individual home. Once millions of people have lost a good chunk of their (virtual) equity, they'll be looking for scapegoats. CREA and its provincial kids look like the perfect one for me.
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February 6th, 2012 at 7:56 am 35
BTW paulb. your reported month-end inventory, after correcting for items REBGV doesn't track was within 0.3%.
The benchmark has been overhauled, showing — wait for it — a significant bifurcation in prices. Check out the side-by-side comparison. Starting in 2010, then big-time in 2011, the new benchmark shows a distinct detachment from the old. I'll try to plot the condo compared to detached; I really think the zaniness in Vancouver is less acute in the vertical direction, despite some reports that Vancouver is in a "condo bubble".
The members of MayorGregor's affordability task force have been announced, I think density increases in Vancouver proper have been pricing themselves in for close to a generation and in many cases the density is coming in the grey market of semi-legal basement suites. Perhaps it's time to have more meaningful conversations. I would encourage all people reading here to submit their views to this task force, even if it's for naught. At least it passes the time while we wait for the inconceivable.
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February 6th, 2012 at 7:58 am 36
Aboriginals ask China to raise human rights issues with Harper on PM's visit
Aboriginals from British Columbia have asked China's president to quiz Prime Minister Stephen Harper on Canada's human rights record during his visit to the Asian country.
"In terms of tit for tat, this will give (the Chinese) ammunition and put some pressure on Canada. We wanted (Hu) to know that First Nations are not being treated fairly in Canada in terms of their aboriginal rights.
http://ca.news.yahoo.com/aboriginals-ask-china-ra…
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February 6th, 2012 at 8:23 am 37
@Makaya: Re-read the article and then read the press release from REBGV. The latter states that prices declined in January compared to December. It was the CBC that prices rose in January with the help of Vancouver. It has nothing to do with changing the HPI just how it's reported in the media.
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February 6th, 2012 at 8:28 am 38
@Nadleh Whut’en:
They should ask the Chinese to raise environmental issues too, since the Chinese set as good an example on the environment as they do on human rights.
They also don't seem to see the irony of asking the country that wants the Northern Gateway rammed through their territory to speak up for them.
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February 6th, 2012 at 8:31 am 39
There are other RE market that are awaiting an imminent crash…
In France, the number of approved mortgages has decreased by 25.7% YOY in January, and 49.4% between December 2011 and January 2012.
"La chute est comparable à 2009, au moment de la crise des subprimes américains" (the fall is comparable to 2009, during the US subprime crisis).
What happened there?
- The government decreased the tax credit for investors buying a newly built property (from 22% to 13%) [understand speculators...]
- and cancelled the "Pret a taux zero" (0% interest loan given to qualifying buyers [understand first time buyers, usually used as downpayment]) for resale properties.
The state coffers are empty and there's no more money over there to subsidize homeowners (no CMHC equivalent there).
Here is a google-translation of the article for those interested:
<a href="http://translate.google.com/translate?sl=fr&tl=en&js=n&prev=_t&hl=en&ie=UTF-8&layout=2&eotf=1&u=http%3A%2F%2 Fwww.lemonde.fr%2Feconomie%2Farticle%2F2012%2F02%2F06%2Fles-credits-immobiliers-accordes-en-janvier-en-chute-libre_1639610_3234.html” target=”_blank”>http://translate.google.com/translate?sl=fr&t…” target=”_blank”>Fwww.lemonde.fr%2Feconomie%2Farticle%2F2012%2F02%2F06%2Fles-credits-immobiliers-accordes-en-janvier-en-chute-libre_1639610_3234.html
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February 6th, 2012 at 8:32 am 40
@Independentwealth:
For detached:
Montreal is -4.6% or -$12,500 since the peak in July 2011.
Vancouver, by the measure they used just until this month, is -3.4% or -$31,000 since the peak in June 2011
Toronto is -4.1% or -$20,700 since the peak in November 2011.
Only Montreal notched up last month, month on month, and that is well within the usual level of noise.
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February 6th, 2012 at 8:37 am 41
Richmond – Detailed Data Mining on the inventory.
A couple of thoughts – as it is Monday and almost feels like a new year. Wait – maybe it's just supposed to be a New Year!.
Did some data mining. Richmond Detached looks like a disaster with over 10 months inventory, 844 units for sale etc. But what you're actually seeing if you break it down is a complete collapse in sales in the category which I would call "Spec build for Chinese buyer". If you break the market into 3 pieces – Lets say – New houses (up to 5 years). Houses that are not quite old enough to tear down (6-30 years) and houses over 30 years. You get the following:
Inventory
New to 5 – 198
6-30 – 314
over 30 – 332
If you then plot against the sales since Oct 1, you can compute MOI at that sales rate as follows
New to 5 – 16 months
6-30 – 9 months
over 30 – 5 months.
So – what you're seeing is the impact of a few years of tear-down and rebuilding turning into a glut of new homes which can not be sold quickly.
As you look at Richmond sales in the past month, the high-end also has not really moved. There are 164 properties for sale over $1,998,000 and only 4 sales in 2012 (17 since October). This is pretty clear evidence that the CNY is really a bust. The Chinese are not lining up in Richmond to buy the houses – at least those that are already built. You do seem to still see "lots" moving which are priced at current market and in desirable area. You have to wonder when builders holding old stock will have to drop price to get their capital out so they can move onto the next project.
Some other interesting stats
Actual transactions during 2012
Avg Price 1,118,000
Median PRice 975,000
Current inventory
Average Price 1,494,000
Median Price 1,289,000
Not sure how this market will fall but what I would expect is that soon the builders will stop buying lots and then the top of the market will also have to fall. How long can this trickle of sales go on for before there is a change? Who knows!!
Perhaps next we'll do Van-West. It's a bit different but today the inventory did finally go over 800. Been a while since it was there.
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February 6th, 2012 at 8:38 am 42
@DEFAULT NAME: That does tend to happen, because the turn in the market is hard to recognize until it has taken hold, then it is just a few months before it picks up momentum, partly from the building recognition. Bubbles and crashes are partly social events, which explains the vitriol from the owners/bulls.
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February 6th, 2012 at 8:38 am 43
@Makaya: for those interested, here is a nice graph representing the RE bubble in France. The red line is Paris. Look familiar?
This is taken from the equivalent of VCI there.
http://www.bulle-immobiliere.org/drupal/
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February 6th, 2012 at 8:50 am 44
@Makaya:
What I like is that "bulle-immobiliere" (which is French for housing bubble) looks so much like "bull immobile" in English.
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February 6th, 2012 at 8:50 am 45
@ZRH2YVR:
Great work.
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February 6th, 2012 at 8:53 am 46
@DEFAULT NAME: Not that it matters IMO but the detached benchmark is within spitting distance of the peak in the summer, less than $5K (i.e. a middle-of-the-road designer watch). Townhouse and condo are faring less well, and that's pushing down the aggregate benchmark.
I'll lob up a graph of detached vs TH/condo in the next few days. I think there is more downwards pressure than many might think and recent credit tightening isn't going to help matters.
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February 6th, 2012 at 8:53 am 47
@Makaya: I am so stealing all your links today. With attribution, of course.
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February 6th, 2012 at 8:57 am 48
I bet Bill McBride is counting the rebound on new wave of employed people in USA, although someone for got to mention that employment actually didn't increase and food stamps have hit new record highs.
The only way I could see prices in US rising if Ben prints money faster than BofA can foreclose! Hang on, I think that's called inflation.
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February 6th, 2012 at 8:57 am 49
@jesse:
" Looking at price-rent ratios in areas like Manhattan show, in some cases, price-rent ratios comparable to Vancouver. But the devil’s in the details, there are other factors at play in markets like Manhattan."
Yup, like rent control. There are all kinds of people in NYC renting at as little as a 5th of market value. On the open market you will not find a thing with price/rent ratios comparable to Vancouver. When I moved here six years ago, I went from a pretty crappy three-bedroom floor-though, with bad plumping and 1940s wiring in Brooklyn, to a whole house where everything worked here, for 30% less than what I was paying in Brooklyn (and I had a good deal in Brooklyn).
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February 6th, 2012 at 9:00 am 50
@AG Sage: you're more than welcome. I do it all the time
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February 6th, 2012 at 9:15 am 51
@DEFAULT NAME: "Yup, like rent control"
That's the thing, though, some of the numbers I'm seeing for rents and prices in Manhattan are upwards of 250-300 price-monthly-rent ratios, not to mention the expense of maintenance in some of those buildings. With the millstone of rent control I would have thought valuations would be less. Same goes for London and apparently parts of Paris too. (Makaya's insight into France yields some of the answer why.) There are still more than a few housing bubbles out there.
Yikes, just when I thought Vancouver was alone.
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February 6th, 2012 at 9:15 am 52
@DEFAULT NAME:
"Yup, like rent control."
No, rent control in NYC applies only to multi-unit rentals and even then only a fraction of them.
"To qualify for rent control, a tenant must have been living continuously in an apartment since July 1, 1971."
http://en.wikipedia.org/wiki/Rent_control_in_New_…
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February 6th, 2012 at 9:36 am 53
@patriotz:
In NYC the term is generally used to cover all forms of rent regulation. "…New York City, where over one million apartments are rent-regulated…"
Taken from the wiki you quoted.
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February 6th, 2012 at 9:43 am 54
@DEFAULT NAME:
The point is that rents for individually titled dwellings, which are what we measure price/rent for, are not controlled.
As is the case for many multi-unit rentals as well, since there are a lot more than one million of them.
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February 6th, 2012 at 9:53 am 55
You guys are off your rocker if you think the new hpi is used to skew market sentiment. it is anew system created for multiple markets. Vancouver was the onlyreal estate board market with an hpi previously so it makes sense that with a new model for all 5 big markets with a differing modelling method and different benchmark properties will have differing results. Prediction models are never perfect
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February 6th, 2012 at 9:55 am 56
Royal Bank suddenly ends mortgage special sooner than expected. Other banks are sure to follow.
http://www.vancouversun.com/business/Royal+Bank+C…
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February 6th, 2012 at 10:23 am 57
@Nadleh Whut’en:
>>>Aboriginals ask China to raise human rights issues with Harper on PM’s visit<<<
Yes, I'm sure our aboriginals would prefer to be under the control of the communist Chinese.
The same people who do wholesale slaughter of Tibetans and steal land from poor people to give to developers.
This is absolutely fucking laughable.
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February 6th, 2012 at 10:45 am 58
New Listings 325
Price Changes 82
Sold Listings 113
TI:13691
http://www.laurenandpaul.ca
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February 6th, 2012 at 10:48 am 59
Net 200. I'll call it a good Monday
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February 6th, 2012 at 10:56 am 60
@ricky: The timing of it is highly suspicious; we're not dealing with a particularly transparent group of folks here to say the least.
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February 6th, 2012 at 10:58 am 61
@Patiently Waiting: RBC seems to blame global uncertainty for the reversal. No mention of some stern talkings-to from TPTB (and something that rhymes with "BMHC").
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February 6th, 2012 at 11:14 am 62
@ Ricky
Totally. If you can't trust the CREA, in conjunction with the five largest realty boards in the country, to honestly put forth unbiased data that 1) they have a financial stake in 2) have jealously hoarded for years, and 3) have endlessly manipulated in the media prior to now, you must be a paranoid conspiracy theorist.
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February 6th, 2012 at 11:44 am 63
In 2009, did prices continue to decrease during CNY? Didn't prices start rising in the summer?
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February 6th, 2012 at 12:21 pm 64
@JR:
You're right, the new year is a very suspicious time to introduce something new. LOL.
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February 6th, 2012 at 12:31 pm 65
For the record, I'm not in the camp that thinks that the new CREA index is meant to change the message of the stats. I think REBGV and FVREB were quite far ahead in terms of trying to normalize the impacts of average prices (which are inherently affected by product mix). Now the rest of the country has caught up but in order to make it consistent. In order to make the REBGV and FVREB numbers comparable, they had to recalculate. Relatively speaking, not much changed compared to the past.
No matter how they present the numbers, this market is cooked once the credit conditions change.
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February 6th, 2012 at 12:37 pm 66
Watch for Year Over Year price declines across the board in 90 days.
It is going to get ugly folks.
Dudes, remember that time you got really drunk and woke up next to what's her name with your head pounding like there was no tomorrow – well, this is going to be much much worse.
Believe it.
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February 6th, 2012 at 1:18 pm 67
we went up .27% last month? does that mean Vancouver just surpassed Hong Kong as the least affordable place in the world?
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February 6th, 2012 at 1:22 pm 68
@jesse: I agree, the banks were told to cool it off. They're not going to argue with the government still deciding on the CMHC ceiling.
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February 6th, 2012 at 2:09 pm 69
re: 2012 VCI prediction contest:
Due to changes in HPI calculation in end of Jan.
All HPI predictions will be converted to %-increase/decrease, and will be compared to End-of-Jan HPI values (rather than end-of-Dec).
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February 6th, 2012 at 2:16 pm 70
@Troll Strange what happens to old calculations when there are new realities, regardless of the time of year.
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February 6th, 2012 at 2:20 pm 71
There seems to be some slightly disappointing RE news out of China, like sales dropping 57%.
http://www.bloomberg.com/news/2012-02-06/china-pr…
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February 6th, 2012 at 2:45 pm 72
@N: Don't believe too much of it… yet. Official stats are often doctored to deflect the Eye of Hu away. I remember last year after the government started complaining about inflation the next month's numbers were surprisingly in-line with the target.
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February 6th, 2012 at 3:06 pm 73
@DEFAULT NAME:
No. There are more unaffordable places than both HK and Vancouver.
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February 7th, 2012 at 12:20 am 74
True. HK & Van are only the most unaffordable in the "English speaking world". Many news articles miss this.
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February 7th, 2012 at 12:33 am 75
Affordability metrics for non-Western countries aren't useful for comparison because of unreliability of data, different ownership rates, and different forms of tenure.
I'm pretty sure Vancouver is the least affordable of any major Western market.
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February 7th, 2012 at 1:51 am 76
Feb-2012
Total days 21
Days elapsed so far 4
Weekends / holidays 2
Days missing 0
Days remaining 17
7 Day Moving Average: Sales 108
7 Day Moving Average: Listings 282
SALES
Sales so far 428
Projection for rest of month (using 7day MA) 1836
Projected month end total 2264 +/- 682
NEW LISTINGS
Listings so far 1130
Projection for rest of month (using 7day MA) 4787
Projected month end total 5917 +/- 530
Sell-list so far 37.9%
Projected month-end sell-list 38.3%
MONTHS OF INVENTORY
Inventory as of Feb 6, 2012 13691
MoI at this sales pace 6.05
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February 7th, 2012 at 2:10 am 77
@patriotz:
"Affordability metrics for non-Western countries"
You think Finland, Germany, Italy, France, etc, are non-Western countries? Just because they're not English-speaking countries doesn't mean the statistics are somehow invalid.
"I’m pretty sure Vancouver is the least affordable of any major Western market."
Then you'd be wrong.
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February 7th, 2012 at 2:41 am 78
@DEFAULT NAMEe:
Nothing but a link for you, pal.
http://www.economist.com/node/21540231
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February 7th, 2012 at 2:41 am 79
@DEFAULT NAMEe:
Well then, which western market is more unaffordable than Vancouver?
Which other western market has a price/income ratio higher than 10 like we do?
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February 7th, 2012 at 3:00 am 80
@DEFAULT NAMEe:
“I’m pretty sure Vancouver is the least affordable of any major Western market.”
Then you’d be wrong.
Are you plain stupid or can't read?
http://www.theprovince.com/homes/Vancouver+second…
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February 7th, 2012 at 4:19 am 81
realtor developer on BNN right now spewing crap. Says investors don't mind subsidizing rental properties, o.k with doing this for awhile to get the cap appreciation. That even though Toronto has more building going on than New york, chicago and some other city combined that they are "getting absorbed" blah blah blah…
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February 7th, 2012 at 4:24 am 82
the woman interviewing him is looking at him like he's crazy:)
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February 7th, 2012 at 4:28 am 83
now they have a realtor on that is actually a bit bearish..
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February 7th, 2012 at 5:01 am 84
Shit Realtors say
They should do a Vancouver special edition for that one…
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February 7th, 2012 at 5:13 am 85
http://watch.bnn.ca/#clip614869
building permits in Toronto
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February 7th, 2012 at 5:16 am 86
@Laibach:
"Are you plain stupid or can’t read? http://www.theprovince.com/hom…..story.html&quo…
FFS, you can't even read your own article. It says: "The survey examined 325 metropolitan markets in Australia, Canada, Ireland, New Zealand, the U.K., the U.S. and Hong Kong."
The 'Western World' extends outside of these countries.
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February 7th, 2012 at 6:26 am 87
@Makaya:
They've done it already in the US:
http://www.youtube.com/watch?v=bNmcf4Y3lGM
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February 7th, 2012 at 7:38 am 88
Last week it was widely reported that FirstLine, the CIBC-owned broker channel lender, announced it was capping owner-occupied loans at $1,000,000. What I didn't read anywhere was that they also put a $750,000 cap on rental property loans up to an 80 per cent loan-to-value. Also, Street Capital announced a similar decision last week, axing its rental program altogether.
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February 7th, 2012 at 8:00 am 89
@DEFAULT NAME: If CMHC is going to ration out its remaining headroom I wonder if owner-occupiers will be given first dibs.
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February 7th, 2012 at 8:24 am 90
http://watch.bnn.ca/#clip614869
never trust some one who never looks at the camera.
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February 7th, 2012 at 8:26 am 91
@jesse:
Nobody's an owner-occupier until after they've bought the property.
If you see what I'm getting at.
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February 7th, 2012 at 8:50 am 92
@DEFAULT NAME: "Last week it was widely reported that FirstLine, the CIBC-owned broker channel lender, announced it was capping owner-occupied loans at $1,000,000. "
The cap was for loans based on self-certified incomes.
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February 7th, 2012 at 9:10 am 93
@DEFAULT NAMEe:
You mean you can only get a liar loan now for $999,999? Good think they're cracking down before things get as bad as they did in the US.
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February 7th, 2012 at 9:17 am 94
From Garth's Blog:
#209 robert james on 02.07.12 at 4:24 pm
The stats are out for the Okangan… Jan. 11 average price $437,328…. Jan 12 average price $415,358 a drop of 5.02 percent.. I bet it is a good time to buy.. LO Lhttp://www.omreb.com/files/01%20-%20CO%20Statistics%20January%202012.pdf
Hard times are here, if you look at the peak residential average house price of $553,000 for the Central Okanagan in April, 2008 and peak median price of $498,000.
That is a drop of 25% for the average house price from April, 2008 and 19% for the median house price from May, 2008.
25% drop in the average house price in close to 4 years? WHY IS THIS NOT BEING REPORTED?
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February 7th, 2012 at 9:26 am 95
@McLovin
Good Find!
as far as why it's not reported….the media takes the "see no evil, speak no evil" approach to RE
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February 7th, 2012 at 9:26 am 96
@DEFAULT NAMEe:
Wrong. Firstline mortgages are capped at $1M and there are no "self-certified income" loans of any amount. We should see others follow.
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February 7th, 2012 at 9:31 am 97
@McLovin:"25% drop in the average house price in close to 4 years? WHY IS THIS NOT BEING REPORTED?"
Because the media are useless tools made up of low paid reporters who have very little time to put together a story. They wait for stories to be fed to them by shills of what ever industry wants a story out. I bet if you put something together and sent it to various media they might look into it and report it.
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February 7th, 2012 at 9:51 am 98
"Tenanted for $2950/month while you apply for permits or invest & hold"
ummm ya if you want to subsidize it by about $7000 a month…
http://www.realtylink.org/prop_search/Detail.cfm?…
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February 7th, 2012 at 10:18 am 99
@DEFAULT NAME:
"Wrong. Firstline mortgages are capped at $1M and there are no “self-certified income” loans of any amount. We should see others follow."
Apologies, you're correct.
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February 7th, 2012 at 10:21 am 100
http://watch.bnn.ca/#clip614869
love these quotes:
"buying a condo is like putting money in a safety deposit box"
"we have no idea who's buying our homes, but we do ask for an address and a SIM #"
"we're finding our investors aren't really concerned about making money month to month"
what a goof..
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February 7th, 2012 at 10:25 am 101
@McLovin:”25% drop in the average house price in close to 4 years? WHY IS THIS NOT BEING REPORTED?”
The media can only devote so much space to real estate. And judging by how many sources i saw repeating the drivel written by shithead Gary Marr "New index shows Canada's housing market heating up again", there is little room left over.
I would guess too there really is nobody working in the news anymore with the mandate to do any actual investigation, let alone look into real estate in any depth. But truly it turns my stomach the amount of media cred enjoyed by the RE industry. It would be refreshing if they could even just evaluate the data a little more critically instead of simply regurgitating the "News Releases" put out by the CREA, CAAMP, REGBV etc.
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February 7th, 2012 at 10:46 am 102
New Listings 281
Price Changes 70
Sold Listings 140
TI:13793
http://www.laurenandpaul.ca
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February 7th, 2012 at 10:56 am 103
OK, it's obvious we're going over 14,000 listings by month's end. How does that compare to previous years? Anyone?
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February 7th, 2012 at 11:08 am 104
@Navin R. Johnson: 15K by months's end…14 by week's end
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February 7th, 2012 at 11:22 am 105
@Navin R. Johnson: We may clear 15,000. There are 16 business days left, and we're adding about 100 per day. Adjusted that's about 14,500 listings by Feb 29th. Previous inventory numbers based on reported REBGV, which are about 93% paulb.'s numbers, are:
1999 15663
2000 14149
2001 14091
2002 10349
2003 9692
2004 7667
2005 10599
2006 8310
2007 10414
2008 11420
2009 16280
2010 10782
2011 11925
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February 7th, 2012 at 11:35 am 106
It's a great time to bye.
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February 7th, 2012 at 11:48 am 107
@jesse:
Great info Jesse
However do you mean 15,500?
16 x 100 = 1600 + 13793 = 15,393
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February 7th, 2012 at 11:52 am 108
@Navin R. Johnson:
check the graph: http://vancouverpeak.com/wp-content/uploads/bpfb/…
14,000 would still keep us the 2nd highest February in the last 7 years.
15,000 would as well, but it would be narrowing in on becoming the highest inventory in the last 7.
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February 7th, 2012 at 11:52 am 109
Thanks fellas. I like what I see based upon previous years. Be nice to surpass the '09 numbers, but that looks a little unlikely….however, 15,000 would be fab. I'm particularly liking the MOI we're seeing
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February 7th, 2012 at 11:53 am 110
15,000 this month (PaulB stats) will rattle the market.
18,000 next month will shake it.
21,000 the following month will rattle it.
25,000 the month following will crush it.
Boys and Chicks, hang on, this could be quite the ride – down.
RJ
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February 7th, 2012 at 12:02 pm 111
Larry at Yatter said that planeloads of chinese carrying bucket loads of cash are defending on Vancouver to buy our real estate. Strategic savvy buyers.
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February 7th, 2012 at 12:45 pm 112
@DEFAULT NAME: REBGV stats will come in at about 93% of that, so we'll be around 14,500 at the press release, with current trends anyways.
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February 7th, 2012 at 12:48 pm 113
1995 17377
1996 17025
1997 17506
1998 17988
Not sure if the inventory catchment is the same as now, but 1995 was the beginning of a bear market until about 2002 or so. Do we remember what 1994 and 2011 have in common?
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February 7th, 2012 at 12:54 pm 114
Do we remember what 1994 and 2011 have in common?
Stanley cup riots and, while it fell across the rest of Canada, the bankruptcy rate rose in British Columbia?
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February 7th, 2012 at 12:58 pm 115
@Guy Smiley:
It's not that I don't share your disgust, but it is worth keeping in mind that newspapers write what people buy, and people like reading about smart they are for buying real estate. If you've ever tried explaining that Vancouver is in a bubble at a dinner party, you will understand why the editors at the Sun prefer to run rah-rah pieces.
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February 7th, 2012 at 1:51 pm 116
What this city needs is for a handful of intrepid individuals to form an association under the Societies Act, and do independent releases of data each month on the figures. Release average and median prices, and relevant trends/metrics. Not putting a necessarily bearish spin on the data but actually providing an alternative voice to the RE industry and its shills. Even the CCPA gets reported by the Vancouver Sun when they do reasonably good work. Doesn't take much to form a legal society.
Watching all this discussion about lack of affordability in the city and the excessive focus on building SROs, purpose-built low income rentals, etc., makes me think that the policy makers really just don't get it. If we keep pulling every single one of the desperation policy levers to keep the RE market inflated we'll never have affordable rental stock. And the vested interests in the media, city hall, developers, RE agents, construction sector, financial institutions, and the 30% of our economy directly employed by RE will constantly undermine any efforts to have a healthy and sustainable real estate system. Even I'm losing faith that this thing will properly correct.
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February 7th, 2012 at 2:08 pm 117
@b5baxter: What numbers you looking at? Why the last 7? After 2009, you got to go all the way back to 1999, which is 15 years (yeah, I know it's 13, but why should everybody else get to mess up the math tonight)
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February 7th, 2012 at 2:42 pm 118
@Guy Smiley:
The Lions won the cup. At home.
Calls for curbs of rich Asian "foreigners" pricing out locals.
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February 7th, 2012 at 4:59 pm 119
#116: " and the 30% of our economy directly employed by RE will constantly undermine any efforts to have a healthy and sustainable real estate system. Even I’m losing faith that this thing will properly correct."
I guess then the smart and the talented will have to leave this city, let the erosion start.
Ie. I don't go down town anymore, no use, they just tow your car away, or want way too much to park it, so no more biz for downtown.
What is the point of being a debt slave for an outhouse and never have time/energy to "enjoy" the sea/mountains, oxymoron isnt it? And really bad investment for the future as we must put away money for retirement, not for a rotting house.
And homes will rot in Vancouver, thanks to the massive amounts of rain and speculator/bubble quality workmanship (in a hurry and as cheap as possible for max profit).
If foot lose and fancy free, your best ever financial decision may very well be to emigrate from BC.
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February 7th, 2012 at 7:08 pm 120
@Peter:
"If we keep pulling every single one of the desperation policy levers to keep the RE market inflated we’ll never have affordable rental stock."
One, there is no correlation between sale prices and rents, and two, real rents have been declining over the last decades.
Vancouver has always had high rents relative to incomes. The impact of the bubble is not on rents themselves, but on the quality of rental stock since so much of it is held for speculative purposes.
And as the metro population has grown the affordable rental stock has been pushed further out. This is a normal outcome of growth and has nothing to do with the bubble.
The affordability problem for rental stock is really an income problem as Vancouver has a high inequality of incomes. You could say the RE bubble is behind this to some degree as it has contributed to deindustrialization. But even without the bubble good paying jobs for low skilled people are not coming back.
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February 8th, 2012 at 1:47 pm 121
At 20k, I'm sure people will definitely feel that "it's not different here".
I'm glad I sold. I do t want this to happen, but it is. So I'm prepared and ready to watch as a spectator.
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