West side a fragmented market

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


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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jesse
Member

All I can think of is one word: McMansion

In the US such beasts are typically away from downtown cores. Vancouver seems to be bucking that trend.

Ralph Cramdown
Guest
Ralph Cramdown
In the old days, it was expected and normal that a very expensive property might take a long time to move; 2 years wasn’t considered unusual. Obviously, today’s $2mm house isn’t comparable to one from the year 2000, but I sense an expectation, even among high end sellers, of a very liquid and active market. I don’t know how much you have to be listing for these days for a sale within a few months NOT to be a reasonable expectation, but I’ve seen properties in Toronto listed for $4.5, cut to $4 after thirty days, cut to $3.5 after 60. I wouldn’t say such a pattern is the rule, but certainly not unique. I don’t know if its motivated sellers or bad advice from the top brokerages they’ve hired. What’s the cutoff in Vancouver between trophy that might legitimately… Read more »
Re-diculous
Member
Re-diculous
Anonymous
Guest
Anonymous

@Re-diculous:
If I had a nickel for every time Carney gave a stern talk about household debt levels in Canada I could buy a home on the west side!

registered
Member
registered

3 Re-diculous Says:“….I think he’s serious”

“Stop eating the cookies I hand out. I mean it this time. I really do.”

patriotz
Member

@Ralph Cramdown:
A reasonable expectation for the sale period for an ordinary property (i.e. not Drummond Drive, whole-floor penthouse, etc.) is the standard listing period, which is two months I think.

If it doesn’t sell within this period you are simply asking above market. There is no such thing a slow market for ordinary properties in a major city. Only sellers asking too much.

Best place on meth
Member
Best place on meth

There are 82 listings for west side detached over $5 million.

The last time one of these sold was a month ago.

curious lurker
Member
curious lurker

another G&M article. they are looking for people to blog about house hunting in the ‘sizzling’ real estate market.

http://www.theglobeandmail.com/globe-investor/personal-finance/home-cents/tales-from-the-trenches-of-the-sizzling-real-estate-market/article2403526/

I like how the last question is ‘Do you have good writing skills?’
I don’t suppose anyone will answer ‘No’ to the question.

“Good writers” from here should volunteer and include the bear case in the blog postings. That would be interesting. 🙂

yvr2zrh
Member
OK some more colour. 1.) There are 80 properties at $5M plus of which 22 have sold since the beginning of the year. That’s amazingly only 12 months approximately of inventory. These are likely more seasonal and were properties that pushed the average up during the Chinese New Year season. As you go to the next million down (4-5M) there are 112 properties listed with only 19 sales since beginning of year. This makes approximately 16-17 months inventory. 2.) What is a commodity priced at? I would say the base commodity is the approx 33 x 120 lot. Looking at old/tear-down properties, you have a range of price per sq. ft of land from 247 for a street-front property on oak street to 1514 for Point Grey road. Dunbar about 440 if not on main road while 370 on the… Read more »
jesse
Member

Looking at the 5 year GOC yield puts things in perspective. It’s unlikely rates are going anywhere fast for the next while. Carney can bark all he wants, there’s not much he can do unless he forces Canada into a controlled recession to avoid an even bigger one later.

Mick Murphy
Guest
Mick Murphy

for some reason, they are handing out telus garden t-shirts at the yalteown canada line station. it comes with a pin number and instructions on registering to win.

but i thought this development sold out already?? maybe they paid for the marketing campaign before the sell out???

Coming Spring 2012
Inspiring a next generation community

register your pin for your chance to win
telusgarden.com/registervip

patriotz
Member

@jesse:
I’m not so sure that it would be an even bigger one later. Problem is that Carney cannot selectively attack the RE/consumer economy, but would have to damage the real economy (exports/manufacturing) as well. OTOH a RE/consumer bust (which is inevitable now, only question is when and how big) would have little effect on the real economy as the latter is export oriented.

local observer
Guest
local observer

McMansion indeed…try tapping on the extravagant “finishing” details on the large houses built around Prince of Wales School (an area I’m familiar with and also an area with the most god-awful houses in the city). The faux brick/stone, weird architectural detailing are almost all styrofoam. I guess it would be safer if you were to be standing next to one in an earth-quake but in terms of quality – zero. I’ve watched these houses go up and am amazed at what the city inspectors think is okay.

Mick Murphy
Guest
Mick Murphy
so i registered for telus garden and this is the email i got: Congratulations! You are on your way to becoming part of our TELUS Garden community. TELUS Garden promises to be the most sensational real estate development in Vancouver’s recent history. As a priority registrant, you will get access to information, photos and some exciting surprises before the public. Your registration confirmation number is XXXXXX. Please save this email for future reference. The TELUS Garden Discovery Atrium will be opening Spring 2012. Our location in the heart of Downtown Vancouver will transform an entire city block into one of the most technologically advanced and environmentally sustainable developments in the world. TELUS Garden will offer a spectrum of homes from affordable one-bedrooms to luxurious signature residences and penthouses. We can’t wait to reveal more details in the coming weeks, so… Read more »
vreaa
Member

Thanks very much for the analysis, zrh.

vanpire
Guest
vanpire

@zrh2yvr:
Crazy is as crazy does…
Nobody who buys in the choice areas of Vancouver is really buying “a home”. They are buying an asset. There are many houses across from the Queen Elizabeth Park for example that have been sitting empty for years. And not just the decrepit ones. Frankly, it makes me sick to my stomach.

jesse
Member

@patriotz: “a RE/consumer bust (which is inevitable now, only question is when and how big)”

Most indications I have from Carney’s and the Bank’s comments indicate that they feel a consumer debt bubble, if not curtailed, will cause lower growth than would be the case if it were suppressed earlier. I get the impression that they are having more trouble reining in credit than they anticipated a year ago.

Eddie
Guest
Eddie

One of the replies to the Globe article on Carney and rates:

“Carney reminds me of when my kid was little. His carseat had a steering wheel and he thought he was actually steering the car.”

LOL

SunBlaster
Guest
SunBlaster

@#14

“Our location in the heart of Downtown Vancouver will transform an entire city block into one of the most technologically advanced and environmentally sustainable developments in the world”

OV has already “transformed” an entire waterfront with it’s “environmentally sustainable developments”, “sustainable” pipes out of recycled paper are prone to leakage!

SunBlaster
Guest
SunBlaster
I had an interesting observation last night @ Costco. As I finished my shopping and was on the way to the empty register with my full cart of goodies, I spotted an older Asian lady with one package of toilet paper rushing to the same register half way across the store. Now, I was much close and was moving at normal pace, she was able to catch up and we came to the register in the same time. She suddenly stopped as she saw I was there first, I polity looked at her and let her go ahead of me, she glanced, and place her toilet paper to checkout. Now at the time I just thought it must of been typical Asian cultural behaviour of trying to get ahead and come out on top of any situation no mater how… Read more »
Anonymouse
Guest
Anonymouse

“A university for Whistler sounds a little too stuffed-shirt for a place that prides itself on being a winter and summer playground for the slightly irresponsible and young at heart. But Whistler council will receive a preliminary proposal Tuesday for a seat of higher learning in a town where height is everything. Project leader Doug Player is promising to build a $300-million private university for 1,500 students on a site known as Alpha Lands, south of Whistler Creekside and directly across the highway from the Spring Creek development.

http://www.vancouversun.com/business/Proposed+Whistler+university+hopes+take+higher+learning+heights/6469212/story.html

McLovin
Guest
McLovin

Where are the 1,500 students going to live?

Best place on meth
Member
Best place on meth

Hong Kong may bar mainland Chinese mothers from giving birth in public hospitals next year to ease over-crowding in local maternity wards, the city’s health chief said on Tuesday.

The comments came after the financial hub’s leader-elect, Leung Chun-ying, said private hospitals should bar mainland Chinese mothers and that their newborns will no longer be able to claim permanent residence in the city.

http://health.yahoo.net/news/s/nm/hong-kong-to-slam-door-on-pregnant-mainland-chinese

What a novel idea, barring the mainland hordes from gobbling up local resources.

Racist, but novel.

Prof
Guest
Prof
Hong Kong may bar mainland Chinese mothers from giving birth in public hospitals next year to ease over-crowding in local maternity wards, the city’s health chief said on Tuesday. ________ I was in Hong Kong at the beginning of February staying with a professor friend of mine, and I raised this issue. I attended one of his lectures at the City University, and afterwards, the students (Master’s level) were milling around cracking jokes about this very issue. Surprisingly, a few of the mainland chinese students actually agreed, shyly, that they should prevent this blatant and transparent abuse of the system. Funny enough, my professor friend’s wife just gave birth a few days ago. He is Canadian and she is Indian, and it requires 6 years of residency to get the health car in HK. They were paying for all the… Read more »
UnagiDon
Guest
UnagiDon

@Best place on meth: The policies preventing Mainland Chinese from giving birth in Hong Kong for citizenship purposes is just as “racist” as policies preventing Canadians from giving birth in the USA for citizenship purposes.

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