Buyers walking away from deposits

Well, there’s a change in the air when it comes to Vancouver Real Estate.   The ‘can’t lose’ investment is starting to look like the ‘must lose’ investment with reports of buyers walking away from deposits and waiting for prices to keep dropping.

“It happened twice in the last month. One [deposit] was $75,000 and one was a $20,000 deposit, the guys just walked away from it,” said Mr. Arora, who runs Oneflatfee.ca in Surrey, B.C. “They are going to wait it out. So they lost $75,000 and $20,000, but if the market comes down $150,000 on a $1.5-million house, that’s not uncommon.”

Vancouver’s once-overheated housing market has cooled sharply, with the average price falling nearly 10 per cent in April from a year ago to $735,315, according to figures released Tuesday by the Canadian Real Estate Association. That was the largest drop since the recession and it marked the fourth decline in the past five months.

In a market once famous for being overheated, Mr. Arora said he hasn’t seen a bidding war in months. “It’s totally a buyers’ market. Buyers are determining the price,” he said. “And sellers are surprisingly accepting it. They are taking it.”

Buyers always determine the price.  If there are enough of them that want to pay more they will drive prices up.  Sellers have no control if no buyer is willing or able to pay the asking price.

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Chabar
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Chabar

I buy tree, huzba buy tree!

Anon
Guest
Anon

“Buyers always determine the price.” – not true. There are two sides of each transaction. Both parties always determine the price.

registered
Member
registered

While a market wide “seller’s front” is pure industry sponsored fantasy, it’s hard to argue what were referred to as buyers in that article set any prices.

jesse
Member

Anon, buyer and seller agree on a price but the buyer has the money. After a few years in business let me assure you that makes all the difference.

Simple
Guest
Simple

Convenient how Helmut Pastrick’s graph is missing the most recent Teranet HPI data. You know – the data showing a slide in prices…

Top notch reporting there.

http://www.globaltvbc.com/video/real+estate+reality+check/video.html?v=2235752714&p=1&s=dd#video

Anonymous
Guest
Anonymous

where is the link for this information?

loser with the girls
Guest
loser with the girls

Anon “Buyers always determine the price.” – not true.”

but but Buyer does not have to buy, on the other hand seller……..

patriotz
Member

@Anon:
I think the best way of saying it is that there is no such thing as a “buyer’s market” versus a “seller’s market”. The seller has the choice (if he has a choice to sell) of taking the high bid or not selling. All the time. Since somebody always has to sell and nobody has to buy, the buyers collectively have the upper hand. All the time.

The idea expressed in the quote that sellers were in control of prices but buyers are now in control is BS.

Anonymous
Guest
Anonymous
@patriotz: “The idea expressed in the quote that sellers were in control of prices but buyers are now in control is BS.” That is true for anyone who thinks logically about a house purchase. The problem is most home buyers are not logical hence the bubble. Most people buying feel they have to buy. The thought of not buying doesn’t even cross their mind. When the pool of committed buyers exceeds the pool of committed sellers prices tend to go higher – that is a sellers market. When the pool of committed sellers is higher than the pool of committed buyers prices tend to decline – that is a buyers market. When the pools are equal it is balanced and prices stay flat. It is a pretty simple concept. Once you understand that psychology trumps logic with home buyers you… Read more »
b5baxter
Member

New inventory graph at: http://vancouverpeak.com/groups/inventory-graph/forum/topic/may-graphs/?#post-2408

Inventory has fallen below 10-year record levels. Does this mean it has peaked for the year? I would say it is too early to tell. At least once already this year we had negative mid-month inventory change only to see it shoot back up.

Over the last month the average daily increase was:
48
At this rate we will reach 19,000 in 17 days (Jun-03-12)
At this rate we will reach 20,000 in 37 days (Jun-23-12)
and 25,000 by October-05-12

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

oh, when have we ever seen this much inventory before? oh my goodness, this is the end! it hasn’t been this bad for… what? 2 YEARS?!?

jesse
Member

@patriotz: “The idea expressed in the quote that sellers were in control of prices but buyers are now in control is BS.

Yes, the seller has no control over the bids made, only control over which bid is accepted. If anything it’s other buyers’ bids, coupled with urgency, that cause a buyer to feel like he’s lost control over the bidding process.

McLovin
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McLovin
More bad news for HAM. I came across this: “I have an export agent in China that I have worked closely for several years in terms of what I import from there for my niche business and today I got an e-mail of PANIC. He says that the economy has hit the skids big time, and he was pleading for me to give him an order for anything or if I had any business associates that I could refer to him. He is in the Guangdong province, which is a major manufacturing area in China. He is in the breed of the new middle class of the Chinese and bought a new home a couple of years ago and is now fearing losing it all. “He speaks and writes English which makes him quite valuable in China and he is… Read more »
BoogyBear
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BoogyBear

Buyers could be in control, if they could collectively agree to show their bids to everyone looking at the same home. But greed is a powerful factor among buyers. Case in point, the next person that puts a bid on a property, show us the address and how much your bid is.

BoogyBear
Guest
BoogyBear

How much higher must the committed pool of buyers be, to make it a buyer’s market?

I would also add that a “seller’s” market would exhibit increasing prices. And a “buyer’s” market would have declining prices. So its not just as simple as the sellers outnumbering the buyers, the sellers have to outnumber buyers in large enough numbers to affect prices. Maybe sellers have to outnumber buyers by 2 or 3 times?

Crash Crowley
Guest
Crash Crowley

The RE market in Vancouer is the worst performing in Canada. Why would you invest in the worst performing market in Canada?

patriotz
Member
@Anonymous: “When the pool of committed buyers exceeds the pool of committed sellers prices tend to go higher.. etc” There is really no such thing as a committed buyer, i.e. someone who is willing and able to buy at any price. Rather for any given price there is a certain number of people who are willing and able to buy, aka the demand function. There are certainly committed sellers, i.e. people who have to sell. There is also a certain number of people who are willing to sell at any given price, and these together comprise the supply function. And where these functions meet is the market price. It seems to me that what most people (and you I think) call a “buyer’s market” is simply one where many sellers are asking above market and therefore must drop the price… Read more »
Anonymous
Guest
Anonymous

@Crash Crowley:
Coz,Vancouver is a Chinaver city that if there was a temperate downturn,but in few yrs those Chinese either local or foreign origin will rush in for bargain.Owning a pc of property is a social norm in Chinese mentality that will take thousands of yr to purge but now I don’t see there is any change of social behavior now.So what make Chinaver so unique is its dominate China population.

BulbsForSale
Guest
BulbsForSale

@BoogyBear: People seem to misunderstand ‘the buyer is in control’ to mean an individual buyer controls the market. Buyers in aggregate control the market no matter what. If someone out bids you it’s another buyer who is willing to pay a higher price.

Crash Crowley
Guest
Crash Crowley

@Anonymous:

I agree with your. Look what’s happening in China:

Real Estate Crash in China Underway: Foreign Funding Down 80%, Land Sales Down 57%, Starts Down 27%; Expect Chinese GDP to Plunge.

http://globaleconomicanalysis.blogspot.ca/2012/05/real-estate-crash-in-china-underway.html

Let’s hope the Chinese work their market magic in Vancouver too.

CounterCounter
Guest
CounterCounter

Hey guys, how do the inventory numbers look? Anything exceptional or unusual or is it just another year in a red hot market?!?!

vangrl
Member
vangrl

13 sales in kits in the last 3 months in the under $400,000 1 bedroom condo category.

11 sold under asking (biggest savings was 12% under) and 2 listings sold above asking.

Inventory in that search criteria today is 43

Variable Name
Guest
Variable Name
DaMann
Member
DaMann

@CounterCounter:

Just another sideways year regardless of what some of the excitement of inventory numbers may tell you. It might be the “start” of the long slide down, but by no means a crash…yet

HAM news
Guest
HAM news

Zookeeper Licked Constipated Monkey’s Butt

Yesterday, Wuhan Zoo Monkey caretaker Zhang Bangsheng unbelievably used his tongue to lick a small monkey’s butt!

50-year-old Zhang Bangsheng used warm water to clean a small Francois’ Leaf Monkey’s buttocks, then began using his mouth to lick it, not stopping for over an hour, until the little monkey defecated a single peanut. Only after the peanut was defecated did Zhang Bangsheng laugh with satisfaction.

http://www.neatorama.com/2012/05/03/zookeeper-licked-constipated-monkeys-butt/

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