BC, data, predictions, supply, west side

West side a fragmented market

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98 Comments

I think this comment from zrh2yvr is worth highlighting, so I’m pasting it into the submission page!

OK – Some more interesting data – Again just the facts.

Van-West Detached, a market which seems to be suffering, can be described as three markets. One where there are over 350 units for sale in excess of 3.2 million with MOI of over 18 months, 185 units for sale at 1.9M or less with a MOI of 3.8 months and approx 340 units for sale between 1.9M and 3.2M with MOI at 6.7 months.

For units priced at under 1.9M, there is a severe lack of inventory which could be a reason for lower sales volumes. One has to wonder however, what will become of this high-end with properties for sale over $3.2 million? They are selling only at a slow pace but at 18 months, I would say many sellers would be happy to just wait for thay buyer.

Meanwhile, inventory is creeping up. Just like Richmond however, it is creeping up only in the low-mid range of the properties. The number of properties for sale with an age of up to 10 years has not changed since January (approx 230 units). However, in the range of 10-115 years old, overall, inventory is up by 80 units or 17%. In the tear-down category (those with age of 999), there are 9 more units or 11% so this could also be seen to have increased.

What is this saying? I would say that until the top starts to fall, there is not much down side in the Van-West market. Not much upside either as on the higher-prices, there are many many choices.

When looking at MOI, Given that sales of the higher-end properties have been picking up, we are seeing MOI for the new inventory decrease where now there is only 13 months for homes up to 5 years compared to approx 17 months in January. This is not a great level and is truly one to put downward pressure on prices. One has to wonder how many of these properties are held by speculators or builders who need to sell.

Finally, what areas are we seeing with deterioration in MOI?

Oak – Now at 10 compared to 5
Kerrisdale – Now at 10 compared to 7
South Granville – Now at 14 compared to 12
Cambie – Now at 9 compared to 6
McKenzie Heights – 8 compared to 6

Shaugnessy has highest MOI still but has improved to 16 from 18.

The most important ares with low inventory and tight MOI are:
Kits – 3.7 months now compared with 3.4 previous
Dunbar – 4.4 months now compared with 6.2 previous
Point Grey – 5 months of inventory same as previous

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So overall, we are seeing the market change. The foreign buyer and the top-end buyer are not in the marketplace in sufficient numbers to acquire the high-priced inventory that is for sale. Limited numbers of units for sale under 1.9M are creating tight supply, but also low sales volume. However, ALL inventory increases have occurred in the lower priced ranges and are not evenly distributed throughout the entire market. It is not clear what we will see next. Perhaps it will be recent low-priced land plays coming back on the market as they realize there is too much competition on the new-build market. Perhaps we will see some high-end builders having to reduce to clear their inventory.

Either way – it is going to play out slowly until there is a change in the credit markets that changes the access to credit for all buyers.

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fixie guy

41 Patiently Waiting Says: “…a wealthy, optimistic city doesn’t sacrifice improved transit because of tax worries.”

If Vancouver didn’t sit on its hands for a century plus, posting that wouldn’t even make sense. Toronto built their subway in the 1940s.

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AG Sage

@What?: if the inventory is higher still, how does your MOI calculation work out? Take your time.

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AG Sage

@patriotz: The difficulty is metro area definitions vary widely. Van metro appears to be 1100 square miles and 2 million people, and the Bay Area is the 11 county CSA of 7 million on 7,000 square miles.

Whereas if you compare cities, you got populations of 600k for Van compared to 800k for SF, which is much more comparable.

Even if you throw in all of BC you don’t get near 7 million. Not sure where to draw the lines for a better comparision.

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patriotz

@AG Sage:
“18,.2% of Vancouver is ethnic Chinese according to the 2006 census. This looks lower than the 21% reported for San Francisco, btw.”

It looks like you are comparing CoV versus CoSF. These cities account for only 25% and 10% of the metro populations respectively so the comparison does tell you anything. For example, you’re leaving out Richmond (BC) which as we all know has a much higher Chinese population. You are also leaving out Richmond (CA) which is much lower (it’s mostly black). 🙂

The Bay Area is about 8% ethnic Chinese, while Vancouver CMA is about 20%. Note that Asians are the only significant visible minority groups in metro Vancouver while the Bay Area also has large black and Hispanic populations.

http://en.wikipedia.org/wiki/List_of_U.S._cities_with_significant_Chinese_American_populations#California_-_San_Francisco_Bay_Area

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frank

Here is the whole article. Worth reading: China factor hits high-end real estate properties While an immigration expert says foreign investors are fleeing the market, one local realtor counters that view and says home like this luxury pad in West Vancouver continue to be snapped by Chinese buyers. Chinese investors are cooling on Vancouver real estate, leaving luxury homes languishing on the market, which some experts say will lead to downward pressure on prices overall. “The bottom has fallen out of Vancouver’s high-end homes,” according to immigration expert Richard Kurland. “When you have the high end blown apart, people who would buy a house for $2 million now wait. That has a cascading effect. That keeps trickling down. If that trend continues you will see $800,000 down to $600,000 and down and down.” Kurland said foreign investors are fleeing the… Read more »

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Anonymous

@Apocarypse Mao:

from your article:

Kurland said foreign investors are fleeing the local market because the Canada Revenue Agency is on the verge of cracking down on overseas tax reporting and the Canadian government is seriously looking at 400 Chinese fugitives living in the country and attempting to send them home by July.

is it true the canadian government is going to crack down on the parasites? richmond has a childhood poverty rate of 31% of course that’s calculated using declared income.

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good-format

Copied from PaulB’s number
http://www.laurenandpaul.ca

 Date      Listing  Price(+-)  Sold   Inv     Inv(+-)  S/L(%)
Apr-02       450     139       125   16,074            27.8
Apr-03       319     133       224   16,124     50     70.2
Apr-04       302     131       147   16,230    106     48.7
Apr-05       277     118       117   16,345    115     42.2

Apr-10       403     211       159   16,475    130     39.5
Apr-11       416     151       202   16,618    143     48.6
Apr-12       333     140       103   16,736    118     30.9
Apr-13       289     146       150   16,807     71     51.9

Apr-16       341     170       137   16,883     76     40.2
Apr-17       280     177       179   16,893     10     63.9

Total-Cur  3,908   1,738     1,798             910     46.0
5 day-avg    332     157       154              84     46.5
Total-Est  6,894   3,149     3,186   17,645  1,662     46.2
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Anonymous

@zrh2yvr: Does April/March comparisson matter?
Aren’t current statistics versus historical averages a lot more pertinent? Sems to me that we may have a perfect storm in the making whereas you appear quite blasé about recent statistics. Just an observation.

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Anonymous

Full circle in this bubble?

Luxury condo tower reborn in downtown Vancouver ….

A luxury condominium and hotel project planned for Vancouver’s West Georgia Street and cancelled during the recession is back on track, CBC News has learned.

Construction stopped suddenly in October 2008, leaving a gaping hole behind the hoardings between Thurlow and Bute streets. But buyers who’d bought did get their money back.

http://www.cbc.ca/news/canada/british-columbia/story/2012/04/17/bc-vancouver-luxury-condo.html

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zrh2yvr

Wow – so many great comments while I was out for the day/night.

First – Thank you PaulB for the daily stats – right on time as always. It is a great basic stat to indicate the overall market.

On the idea of Whistler U. . . Well – I think they could do exchanges with UC Santa Cruz. Perfect Summer / Winter School — or is it Winter / Summer — tough to tell what the better exchange would be.

On the April stats v. March — It’s too early to tell. It is really projecting equal right now with only a statistically insignificant amount of difference between the two.

Anyhow – We’ll see. Some interesting changes/ inflections in the market this month. None are really positive.

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What?t amount of money flowing into Ca

13 of the last 16 homes that sold for more than $3 million in the swanky British Properties since last September were purchased by Chinese buyers.and the other 3 homes were sold to Persian investors. Since the risk of a war in Iran has increased a lot there is a significant amount of money flowing from there and it is predicted that the prices for high end homes will go even more up.

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real_professional

Translink to cut expansion projects because they couldn’t force through a tax hike.

Did you know that translink police officers are retired cops from other forces already making one of the fattest pensions known to man. And they get paid over100k per year to hand out tickets. The worst part is, the tickets they hand out aren’t even enforce able as per my buddy in the Vancouver crown counsel office.

It will be crunch time when the economic cow which is real estate is milked for the last time.

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real_professional

@ what? You’re a loser and Paul provides a community service without hiding, unlike you, on both counts. Remember, crack dealers and strippers get paid well, that doesn’t mean they’re smart, talented, or respected.

Unfortunately for you, drug dealers and strippers will still be working when housing implodes

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Apocarypse Mao

HAM can’t possibly have any influence;

“China factor hits high-end real estate properties”, 24 Hours, Apr 16/12

http://vancouver.24hrs.ca/News/local/2012/04/17/19645806.html

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What?

By the way, paulb who publishes stats here is a realtor too. Have you checked how many sales he closed this year?

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...

OMFG really? 100K a year?

A wage-slave who makes 30K a year and has $1000 in his chequing account is further ahead than some “rich” realtor with more debts than assets.

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Makaya

@What?: why so much anger? I know times are tough right now for you, and the future of your business looks really depressing, hence your presence here. I can imagine how it feels to think that your revenue will be divided by 2 or 3 in the coming years and you’ll have to find somebody to take over your car lease.

But hey, I’m not responsible for your situation. Don’t be mad at me or anybody else on this blog. You made your own life decisions, take responsibility for it. I simply hope for you that you didn’t leverage yourself and use all your good income during fat years to buy “investment properties”… If so, I’m sorry to break the news, but you’re screwed.

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What?

@Makaya: do u at least have a home? or Chinese mom’s basement?

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Makaya

@What?: same without selling homes.

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What?

should be more like [-2% +5%] range

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What?

@jesse: should be more like [-2% 5%] range

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jesse

@What?: I don’t know if prices will retest the highs of last year — I think in some sub-markets we will see new highs — but current inventory levels are not conducive of measurable price rises. My gut feel is December 2012 will be in the range of [-5%,+2%] YOY

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What?

@Makaya: what is ur definition of proper job? i made over 100k per year for the last 10 years selling homes, what did u make?

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Makaya

@What?: is your business that slow these days? Empty open houses are depressing, I know. Go and get an education so that you can apply for a proper job.

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What?

@Makaya: ru or ur parents from mainland china? admit it. me like MAO DZE DUNG too.

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