Average Vancouver selling price down 9.8%

The problem with using averages is they can look terrific on the way up and horrible on the way down.  Remember all that talk about the ‘average’ Vancouver house now being worth $1 million?  One year later it’s apparently worth $735,315.  What will it be worth next year?

The average home price in Canada in April was up 0.9 per cent from a year ago at $375,810.

“It bears repeating that the national average price was skewed higher last spring by record level high-end home sales in Vancouver’s priciest neighbourhoods, and that a replay of this phenomenon was not expected this year,” said Gregory Klump, CREA’s chief economist.

Sales in Canada’s largest markets are having opposite effects on the national average, with slowing sales in Vancouver dragging, and soaring sales and prices in Toronto exerting upward pressure.

The average selling price in Vancouver was down 9.8 per cent compared with a year ago at $735,315, while the average price in Toronto was up 8.4 per cent at $517,556.

Read the full article is in the Vancouver Sun.

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Guy Smiley
Member
Guy Smiley

Fresh tracks!

I guess it’s no longer different in Vancouver. Now it’s different in Regina (up >9% in the last year).

Of course, the location has changed, but all the other arguments fit.

1. Sasakatchewan is clearly running out of land.
2. Foreign buyers are pouring in from winnepeg.
3. Most importantly, everyone wants to live there!

Maverick
Guest
Maverick

Great. Let the trend continue. Best thing that can happen for Vancouver’s long-term health is a 50% drop.

One of the biggest fallacies fervent in our society of RE pumpers, lemmings and other associated idiots is the notion that high real estate prices are somehow good for quality of life and for real wealth creation.

The reality is that every run-up in RE prices has been met with an implosion and that it’s always been the opposite – that low cost of living translates into a higher quality of life.

jesse
Member

I guess having to explain to the media what “median” is would be too much work.

De La Riva guard
Guest
De La Riva guard
Summary article by Jeff Rubin in the Globe today on the effects of a Greek default is a worthwhile read. And a plug for his new book. Truly, the only thing that will kick this overinflated market to the curb is a change in monetary policy by the BOC. I read stuff like this and can’t help but wonder if we’ll ever see higher rates. Rubin writes: A Greek default would send shock waves through Europe’s banking system. Massive write-downs by banks are sure to be followed by even larger taxpayer-funded bailouts. Similar to the response to the subprime crisis, governments will argue that some institutions are simply too big to let fail. But the cost of bailouts won’t be limited to Europe. A Greek default would start in Athens, but it wouldn’t be long before it’s felt in Paris,… Read more »
registered
Member
registered

4 De La Riva guard Says: “Truly, the only thing that will kick this overinflated market to the curb is a change in monetary policy by the BOC.”

What it will take is making it more difficult to get money for a home purchase. Raising rates is only one way. Over the past decade the federal government lowered down payment minimums and increased both term lengths and government mortgage guarantees (encouraging lenders to take risks they normally wouldn’t touch like cash-back, effectively 0% down loans) to historically unprecedented and unsustainable levels to create this national time bomb. With those currently being rolled back, especially the latter, my bet is that, just like south of the border, interest rates will be largely irrelevant.
Until of course taxpayers have to bail out those Canadian sub-primes. Anyone care to bet on Carney raising rates then?

De La Riva guard
Guest
De La Riva guard
@fixie guy: You make good points there. Tough for a central bank governor to raise rates when in the eye of a bailout shitestorm. And with the financial lobby wielding influence with our lawmakers, ditto for any politcal influence that might back up such a move when we’re locked into a four year election cycle. The timeline necessary (and the political backbone), that could bring about meaningful change is insufficient. Nor is the majority of the Canadian electorate seemingly ready to demand fiscal probity with torches and pitchforks in hand. At least, not yet. So I guess that largely does leave us with regulation and oversight for dealing with our debt problem. I do, however, recall my Dad telling me how fortunate he felt to have invested heavily in GIC’s in the early eighties when interest rates were high. He… Read more »
Anonymous
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Anonymous

Globe and Mail: Vancouver’s real estate swoon deepens

People walk away from deposits on houses.

http://www.theglobeandmail.com/report-on-business/economy/housing/vancouvers-real-estate-swoon-deepens/article2433053/

N
Guest
N

@De La Riva guard:

“Truly, the only thing that will kick this overinflated market to the curb is a change in monetary policy by the BOC. ”

What makes you think that? Have low interest rates kept prices high in the US, Japan, Ireland, Spain …?

We know that low interest rates start bubbles, but low interest rates cannot keep bubbles permanently inflated.

There are many mechanisms that can exert downward pressure on prices but the most obvious is simple lack of expected appreciation. Even if rates are low enough that a person can afford a mortgage, how likely are they to take on that mortgage if they believe that the house will get less valuable over time?

WS
Guest
WS

It completely baffles me that the Average has any relevance in Canada.

You see not a peep of it in the States. Cripes! All we do down here is argue about the relevance of median as a statistical indicator and how it is distorted on the way up or down. Average? Not ever considered.

Anonymous
Guest
Anonymous

1. Sasakatchewan is clearly running out of land.
2. Foreign buyers are pouring in from winnepeg.
3. Most importantly, everyone wants to live there!

And of course: Cam Good took a dump there once.

Makaya
Member
Makaya

@Anonymous: Winnipeg is in Saskatchewan now? :p

gokou3
Guest
gokou3

This is why one should have paid attention in their math classes. Apparently not enough people in Canada did.

Makaya
Member
Makaya

@Makaya: oops, I have reading problems…

McLovin
Guest
McLovin

I truly wonder how many people know that prices are down -10% YOY? Its been a stealth correction and people are still house horny and have no idea what is really happening. What will happen when we really start to sell off?

betamax
Guest
betamax

The average is just the average, though we certainly heard enough about it on the way up. Now, hardly a peep on the way down.

As McLovin stated below, the correction has barely gotten started yet, suggesting the bottom is a long way off. Time to microwave that popcorn.

Anonymous
Guest
Anonymous

@Makaya: …@Anonymous: Winnipeg is in Saskatchewan now? :p…

Well, you can defiantly see Winnipeg from Saskatchewan.

10DownerStreet
Guest
10DownerStreet
Americans are sharing their bad real estate advice anecdotes on the popular U.S. based site reddit.com. “You’ve got good credit, right? You should take out a million-dollar mortgage to buy this house that we can flip and resell. Housing prices never go down.” This was in 2007. My boss talked me into buying a house when I was 22. Got a little town home, all that I could afford. He was telling me how I’m making the best decision of my life and I’ll be in a house three times the size of it in 5 years. Well 5 years later I still live there and it’s worth probably 60% of what I paid for it. My boss, friends, parents, parakeet, cousins, uncles, grandmas, Batman, pizza guy, etc all hit me with the BUY NOW BUY NOW shit around the… Read more »
vangrl
Member
vangrl

my friend has her condo listed, according to her realtor, NOTHING westside (Fairview, Kits,West End) is selling (I’m talking condos), that the only ones that have sold in the last month are ones that have been REALLY sharply priced, and even then a lot of them sold below asking.

She’s debating on lowering the price and chasing the market down or just taking it off the market altogether, and of course pissed that she didn’t sell 6 months ago.

Markets turn on a dime

tru dis

Devore
Member
Devore

@vangrl:

Markets turn on a dime

I don’t think the market turns on a dime, it’s just hard to notice because it’s so illiquid. It seems fine for a long time, then it’s “suddenly” not fine, but hindsight tells us it wasn’t sudden at all.

Anonymous
Guest
Anonymous
In Fairview things are still selling pretty fast, however I do not know at what price. All the townhouses in my neighborhood have a “SOLD” sign on them, after having a “FOR SALE” sign for 2 months to 3 weeks. Every open house I went too was slow, especially condos. Also strange things happen. Most worn out homes are for sale in the 1.5 million. In February, a similar SFH was for sale at 2.6 million (!!!) on 15th and Willow. 3 weeks later it had a SOLD sign on it, that stayed FOR EVER. Nobody around, no light, no activity. Garden is a jungle. No change of any kind around the building… (money laundering?) Another SFH seems to have been bought by a bunch of people who seem to take turn to renovate at a hobby-like pace. Every time… Read more »
jesse
Member

“I truly wonder how many people know that prices are down -10% YOY?”

For most properties they aren’t. I am disappoint.

jesse
Member

“according to her realtor, NOTHING westside (Fairview, Kits,West End) is selling”

ABC
A lways
B e
C losing

Sounds like her problem is she needs to hire a winner. 🙂

What dah
Guest
What dah

More fallout from the Ferrari crash in Singapore:

The Associated Press reported the crash had already sparked a strong “anti-foreign sentiment” throughout the country with many people posting online attacks on Chinese and other foreigners as well the government’s immigration policies, but the video has only added to the controversy.

Best place on meth
Member
Best place on meth

@What dah:

It’s so unusual for mainland Chinese to be driving recklessly in high end cars.

I’m sure this was an isolated incident.

De La Riva guard
Guest
De La Riva guard
@N: What makes you think that? Have low interest rates kept prices high in the US, Japan, Ireland, Spain …? Well, it depends on which side of the price graph you focus your attention on, and for what length of time doesn’t it. The US Fed prime interest rate on June 27, 2003 was 4.00%. It moved up steadily to peak at 8.25 % on June 29, 2006. Not a low rate by any stretch. And here’s some Annual Home Price Appreciation Rates for Seattle, WA: 2003 5.47% 2004 10.61% 2005 17.29% 2006 13.74% 2007 4.58% Prices were clearly rising as rates were ratcheting upwards. We know that low interest rates start bubbles, but low interest rates cannot keep bubbles permanently inflated. There are many mechanisms that can exert downward pressure on prices but the most obvious is simple lack… Read more »
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