US housing market still deflating
City by city data for US markets is just out showing how much prices fell in the year and how far they’ve come down since the market top. Here’s what last year looked like in some major US markets:
South of the border: city -by-city breakdown of latest Case-shiller data
Las Vegas: Prices down 8.8%, and 61% below peak.
Los Angeles: Prices down 5.2%, and 41% below peak.
Miami: Prices down 3.8%, and 51% below peak.
New York: Prices down 2.9%, and 24% below peak.
Phoenix: Prices down 1.2%, and 55% below peak.
Portland: Prices down 4%, and 29% below peak.
San Francisco: Prices down 5.4%, and 41% below peak.
Seattle: Prices down 5.6%, and 32% below peak.
Remember, it’s not a bubble, it’s a balloon. Balloons don’t pop, they deflate. Slowly over the course of many years.
Hat tip to VMD for the link.
March 14th, 2012 at 8:42 pm
Hey Renter Rant,
You didn’t set a 2nd lease, that means you’ve automatically moved to what’s called month-to-month in the BC Residential Tenancy Act.
That is transferred to the new owners which means they have to give you at least 2 months notice PLUS 1 month’s rent if they’re kicking you out.
There are other rules they have to follow as well if they are trying to kick you out, so you should definitely read the relevant parts of the Act, specifically the sections about “Notice to End Tenancy”.
Renter Rant – “I make good money, have done everything right from a financial planning perspective, analysed the market in detail and it hasn’t made any sense to buy in for YEARS. Found out this morning I have to move again. Moving SUCKS!!!! Says:
March 10th, 2012 at 7:51 am
[...] “Enough is fcuking enough. Found out this morning I have to move again. My stupid mistake for not setting a 2nd lease. They are selling and cashing out – can’t blame them. They are friends of my brothers and gave us an indication they were holding long-term. SO STUPID OF ME!!! A 2 year old, prego wife, new job – timing could not be worse! But seriously, I make good money (top 5% of Canadians), have done everything right from a financial planning perspective (pay yourself first, hired experience investors, diversified portfolio blah, blah, blah), analysed the market in detail and it hasn’t made any sense to buy in for YEARS. I couldn’t make myself buy in even back in 2007. But still it keeps going up, and lucky people keep getting to feel smug, and look down their nose at renters, and put themselves in CRAZY levels of debt. What the heck are you supposed to do get some stability (don’t answer that – I know get a lease – STUPID ME!). The very basic house I am in (getting booted from), in the neighborhood I grew up in will list and sell quickly for $850K!!!! Blows my mind. All of this brought to you by our f’d up government who think grants to get more people into the market actually addresses the affordability problem. WTF! We let real estate investors and contractors and planners run CMHC so they can drive more business for themselves. Really a government program to make housing more affordable and accessible insures INVESTMENT properties. WTF!!! Total insanity. Heads gotta role at some point here. What’s involved in starting a revolution????? Yes I’m tired of moving, but my biggest concern is what we are doing to Vancouver for the long-term. Assuming it ever goes down (starting to have doubts at times these days) the correction will be HUGE, and will slaughter so many of today’s smug faces. They will get their financial assess handed to them, and likely never recover. With how many of them there seems to be, what is that going to do to the city I grew up in and love, but have a hard time enjoying living in these days. Moving SUCKS!!!!” – RentersRant at VCI 29 Feb 2012 at 9:30pm [...]
March 2nd, 2012 at 6:48 pm
@Anonymous:
Good work man,hit on their ball hard with facts and reality.Shut their doom-day maniac’s mouth once for all.cheer for the inevitable 1.5 million threadhold in 2014.
March 2nd, 2012 at 11:27 am
@McLovin:
We already have a forward market for housing operated by National Bank based on the Teranet HPI (It is “Teranet-National Bank”, after all). It’s just not exchange-traded like the Aussies’: it’s OTC. Maybe we’ll get there…
I’d be more interested in a naked CDS market, though.
March 2nd, 2012 at 10:33 am
@betamax: Thanks Beta. I’ve never been there and can’t really make my mid…
March 2nd, 2012 at 10:18 am
Makaya — Austin is a great city, clean with very friendly people and a great culture, lots of live music. Also home to the U of T. Summers are hot but everyone has AC everywhere. I’d move there in a heartbeat if I had a job lined up.
March 2nd, 2012 at 9:51 am
Does anybody on this blog knows about Austin, Tx? I’ve just got an offer to relocate there from my company. Not quite sure if I should take it yet. Salary will be better, less vacations (which really sucks in my situation), more affordable housing, etc. I would be required to move within the next two months!
If you have been or lived there, how did you like/dislike it?
Thanks guys
March 2nd, 2012 at 8:56 am
@Ulsterman: The Whistler market is a completely different market then the Van market. Whistler is purely a play on discretionary spending. This does however indicate that people are simply just not spending as much as they used to, but does not necessarily reflect what is occurring in GVRD and especially in Vancouver. The Vancouver market is unlike anywhere else in the world. People want to live in a world class city, but are not willing to live up (as in a highrise), they want to live in a house and as a result, due to supply and demand (not saying that there is no speculative buying because there is) house prices are bound to go up or at least stay inflated. If all mainland Chinese individuals were to flood the market with pure speculative positions that they have in the Van housing market, yes there would be a bust. However, I don’t see this happening. Moreover, Chinese manufacturing orders and durable good numbers came out, and they are better then expected. The Vancouver housing market is driven by so many factors that no single one can dictate the direction of price. Do I think homes are way too expensive and should be more affordable, yes. Is it going to drastically change in the near future, no.
March 2nd, 2012 at 6:12 am
88 patriotz: “You’re assuming that immigration in itself creates jobs.”
Not at all. More people means more demand for places to live. This is so obvious it’s incredible to see it contested. The only way around this is via your hidden assumption/misdirection new Canadians are arriving without the financial means to acquire them. That’s patently, demonstrably false.
The market eventually absorbs that demand and prices return to a level more in line with historical norms. There’s a strong argument to be made that the market is capable of reacting to a constant rate of immigration because the overall demand remains predictable and permits planning. The situation we’re in is an unpredictable increase in immigration rates driven by federal policy. The government has repeatedly justified it on economic grounds, but if you want to keep voting down simple economics and public record fill your boots.
March 2nd, 2012 at 12:54 am
@McLovin:
If Flaherty lowers the boom like Garth thinks he will, no amount of pumping will help. It’s only slowing the derailment, which is certainly in progress.
March 2nd, 2012 at 12:34 am
@121 I’d be worried if that came to Vancouver. “The index is a major step toward creating new financial contracts” It’ll be just another avenue for speculation. We’ll have RRSPs, TSFAs, and investment funds playing the market on top of the usual idiots speculating.
In a way, the goal of this index would be like the credit default swaps that helped to contribute to the US crises. It takes each individual risk and combines it into an entire entity. This creates a new race to the bottom where the risk takers are immediately rewarded, and the prudent banks are punished with hostile takeovers.
Stage 1: Create a benchmark index to con the investors
Stage 2: Create index funds
Stage 3: Shift risk from banks over to inestors.
Stage 4: Collect $$$
Vancouver Condo InfoFFA! housing bubble panic, vancouver inventory, risk and prices Says:
March 2nd, 2012 at 12:07 am
[...] to panic on the housing market -Very few expiries means a quick return to the 15k party. -We’re at the highest inventory for this time of year [...]
March 1st, 2012 at 11:40 pm
@Ulsterman: ….In the realtor’s words, “A Steal at $189k”. ….
When it gets down to $80k (and it will), I might take a look.
March 1st, 2012 at 11:32 pm
@McLovin: You mean the average price? You’re tilting at windmills.
“A high Canadian dollar and an extremely high cost of housing combine to make me less competitive than my counterparts in the US. Housing prices must come down to ensure that Canada is still competitive on the international stage.” Says:
March 1st, 2012 at 11:03 pm
[...] “My concern about this continuing decrease in the US house market is that it appears to be setting them up for an increase in business. My job here in Canada could very well be done by an American faciliy within our own company, and now the US is releasing information that only seems to confirm that their economy is starting to finally grow again. A high Canadian dollar and an extremely high cost of living (housing) combine to make me less competitive against my counterparts in the US. They can agree to take lower compensation and still have a nicer house (better standard of living) than I… my productivity levels are comparable or better when comparing apples to apples, but I get less bang for my buck. Housing prices must come down to ensure that Canada is still competitive on the international stage.” – Burbs Boy at VCI 29 Feb 2012 12:34pm [...]
March 1st, 2012 at 10:31 pm
@McLovin:
Hit right on their balls hard with 1000 pounds hammer;but they will never give up while average Vancouver SFH is approaching 1.5 million mark
March 1st, 2012 at 10:24 pm
I wish this was coming to Vancouver!
http://business.financialpost.com/2012/03/01/aussies-get-a-shot-at-betting-on-domestic-housing-prices/
March 1st, 2012 at 10:16 pm
Fellow Bears,very disappointing numbers on the price of SFH last month.
Regardless of the reasons for the price increase (ie: a few really big sales) it is bullish for the market. We can all spin it any way we want but not one can deny that it is disappointing. The MSN will use this to draw more people in telling them RE can only go up in Vancouver, buy now or be priced our forever, throwing away rent, bears are wrong, its different here.
We all know how this will end but February’s numbers just pumped a ton of air into this balloon. As much as it pains me, I think the party hats will need to sit in the closet for a while yet. This market might be on the way to the hospital but it not dead yet.
March 1st, 2012 at 10:12 pm
Up in Whistler and noticed the following advert in The Pique newspaper:
Top Floor Studio in Market Pavillion
(long description)
Phase 1 – unrestricted owner-use
Owner paid $310k – Must be sold
In the realtor’s words, “A Steal at $189k”. Ouch! I thought real estate always went up? Why isn’t the massacre of Whistler prices a news story in Vancouver?
March 1st, 2012 at 10:12 pm
@chopper: “Sorry, I’d be happy to tell you a specific location except for the fact that I don’t want to advertise where I live.”
Yes the real estate cartel might track you down if you gave away the neighborhood. Or you could just be making the story up?
March 1st, 2012 at 9:38 pm
@Eddie: Yeah dude, but one of them is is Hawaii. I heard it rains there all the time, who wants to live there? Everybody wants to live in Vancouver with our even climate, we have the classic vacation spot.
Ever seen the TV show Vancouver 5.0? There’s always hot babes in bikinis walking around and the sun is always shining. Who can resist that?
March 1st, 2012 at 9:32 pm
Two similar properties, one in Vancouver and one in Hawaii. One costs 3 times the other… Guess which one!
http://www.realtor.ca/propertyDetails.aspx?propertyId=11523632&PidKey=-113497184
http://www.realtor.com/realestateandhomes-detail/401-Leomele-Pl_Hilo_HI_96720_M72969-60775
March 1st, 2012 at 9:26 pm
After the crash… picture of Ireland after the real estate bust.
http://www.theglobeandmail.com/report-on-business/international-news/pictures-of-irelands-abandoned-housing/article2354008/
March 1st, 2012 at 9:15 pm
Is there a lot more people visiting this site? I’ve noticed that the # of votes received by paulb has gone significantly up, and much faster, that just even a month ago.
Has anybody else noticed it?
By the way, Larry’s comments are pretty funny today. Last month, he had a fairly bearish view, and now he’s back in pumping mode. He might be in for a big disappointment, and very soon.
Prices are up, sales are down. This is a very familiar divergence pattern to all the traders out there… That’s just a confirmation that we have indeed reached the peak. Can’t wait for the spring and summer season to be over. Then we’ll see exactly in which shape the market is, and it won’t be pretty (I mean for the over-leveraged owners…).
March 1st, 2012 at 8:27 pm
@chopper:
I totally understand, Chopper. I’m guessing you’re somewhere on the westside on a leafy street with mainly SFHomes?
Can you tell me how you come into competition with the developers? What have your experiences been? Usually when you make an offer on a house you have no idea who you’re competing against. Who are these guys developing for HAM? How long does it take them from winning the bid to completion of the house?
March 1st, 2012 at 7:21 pm
@paulb.:
The inventory dropped less than 100 from yesterday- so no, not a lot of expires.
March 1st, 2012 at 7:12 pm
@paulb.:
Lots of expires?
March 1st, 2012 at 7:11 pm
New Listings 313
Price Changes 94
Sold Listings 123
TI:14912
http://www.laurenandpaul.ca
March 1st, 2012 at 6:42 pm
ETB at RET rubbed more salt to the bears’ wounds. vanpoor must be eating his own hat.
March 1st, 2012 at 6:28 pm
@chopper:
oh no, VREAA the great will headline this and claim that it’s gonna be 66% off. poor guy, his guy is chasing him by the tail.
March 1st, 2012 at 6:02 pm
@jumpin in:
“What I took from this article is that the economy is sunk if the housing market falls hard because of the potential impact on consumer spending.”
What Carrick is missing is that an economy that depends on inflated house prices (rather than incomes) to maintain consumer spending is already taking on water, and the sinking is inevitable.
March 1st, 2012 at 5:31 pm
@mac: Hi Mac, I live on a super great street. Very good schools nearby and my rent is actually quite reasonable. In my neighborhood, there are empty houses on every block, some for pure speculation and others where HAM drops in from time to time. Presently I’m price well out of the market in my area, even for a tear down, and I’m finding my biggest competetion for these tear downs are developers, not HAM. This is why I think the market is being driven from the top town in this area. I’ve love to see the market go tits up just to see a few of these prick developors I’m competing against go bankrupt. Sorry, I’d be happy to tell you a specific location except for the fact that I don’t want to advertise where I live.
March 1st, 2012 at 5:11 pm
@chopper:
Chopper… what’s your street like and for that matter what’s your neighbourhood like? Are there many empty houses on your street? Can you give us a hint as to where you are… no need to divulge everything just like ‘between Alma and MacDonald below West Broadway… that type of thing would do.
March 1st, 2012 at 5:05 pm
@chopper:
Story from the moon;tell the address and I will check.
March 1st, 2012 at 4:56 pm
Hi all,
Been a long time since I’ve posted and just wanted to give everyone an update on my neck of the woods on the Westside. Last Nov/Dec – can’t remember when, I posted that there were 7 houses within a stone’s throw from my house that were for sale. To clarify a bit better all 7 are on the same road as me and I walk past them on my way home from work every day and the walk from the bus stop is about 1km. I actually checked MLS and there was an 8th house which was listed but I missed as the owner did not put a sign on the front lawn.
Since last fall, 3 of them have remained for sale and are still for sale today. (They’re empty and I’m pretty sure are owned by HAM.) Three de-listed right before Christmas and have yet to re-list while the other two de-listed before Christmas and re-listed in Feb, still awaiting a sale. In other words, zero sales. I know it’s a very small sample size but it’s shocking really as I would have expected at least one bloody sale. Prices on the houses ranged anywhere from $1.7MM to $4.0MM, so these house were a mix of tear-downs (for my neck of the woods) and HAM specials. If I walked another 400 metres farther up from my house, there were another two houses that had been for sale all fall and were de-listed and have since yet to re-list.
So, what I’m trying to say is that I do see some stuff selling, but the sales pace is WAY off last Feb’s sales pace where nothing was staying on the market for more than a couple of weeks in my neighbourhood. Finally, I think my very small cross sample tells us that there are a bunch of people who pulled their listings last fall that are waiting to re-list this spring, so I’ll be watching the inventory count with keen interest this spring!
cheers to all,
March 1st, 2012 at 4:27 pm
http://www.theglobeandmail.com/globe-investor/personal-finance/personal-finance-reader/rob-carricks-reader-panic-time-for-housing/article2355066/
Panic time for housing
That’s what Maclean’s magazine says in a cover article about Canada’s housing market. What I took from this article is that the economy is sunk if the housing market falls hard because of the potential impact on consumer spending.
March 1st, 2012 at 4:09 pm
What’s the deal with lampshades…
I mean if it’s a lamp, why do you want shade?!