West Side housing boom loses its sizzle

The Globe and Mail has a suprising headline: Sky-high housing prices in Vancouvers west side short lived.

Both sales and prices are down at the top end even more markedly than in the rest of the region, which has also seen a general slowdown this spring.

A house on the 3000 block of West 24th Anenue, first listed at near $4.5-million six months ago, sold on April 15 for $3.35-million.

Fresh statistics from the Greater Vancouver Real Estate Board show the number of sales on the west side is down by nearly 40 per cent for the first four months of the year. Only a third of the nearly 400 homes listed in April have sold – one of the lowest rates in the region.

Realtors say the slowdown appears to have resulted from a combination of tighter lending practices by local banks, which now want proof of income to service large mortgages, more restrictions on how much capital can be taken out of China, and fewer immigrants.

“Banks are now requiring borrowers to disclose incomes and assets before mortgages are approved, as of the last six weeks,” said west-side realtor Marty Pospischil, who specializes in selling single-family homes owned by long-term residents. Last year, he says 90 per cent of his 100 house sales were to “offshore buyers” – people not living here yet, who flew in to buy. This year, it’s less than a tenth of that. “We’re now seeing a 50-per-cent collapse rate in deals, when it’s usually more like 5 per cent,” he said.

Read the full article here.

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Anonymous
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Anonymous

@JohnDoe: …Funny thing is, this guy says if it doesn’t sell at 3.2 he’ll wait and sell it for the same price in a few years when the price comes back up….

Ya, because prices so hight that absolutely no one can afford them is the new ‘normal’. What an idiot.

Take it from Kenny Rodgers:

You got to know when to hold ’em, know when to fold ’em,
Know when to walk away, know when to run.
You never count your money when you’re sittin’ at the table,
There’ll be time enough for countin’ when the dealin’s done.

I think it’s time to run.

JohnDoe
Guest
JohnDoe

Guy I know living on Van westside listed his house recently after a teardown on his block sold for $3.2 million two months ago. He listed his much better place for $3.6 mil, no offers after two weeks and dozens of viewings, now dropping to $3.3mm, but he thinks it’s too late. Apparently his realtor tracks the numbers religiously and westside housing supply is way above average in the last few months.
Funny thing is, this guy says if it doesn’t sell at 3.2 he’ll wait and sell it for the same price in a few years when the price comes back up. I’m thinking “sell it now while you still can!”
Anecdotal, but it seems to confirm the numbers.

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[…] all above stats care of ‘Inventory’ at VCI, in comments 7 May 2012. […]

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[…] “We’ve had 6 straight days of 300+ new listings. The last time this happened was in early April 2010 in the post Olympics listing rush. This my friends, is a rush to the exits.” – VHB (Vancouver Housing Blogger), at VCI, 7 May 2012 11:15pm […]

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[…] all above stats care of ‘Inventory’ at VCI, in comments 7 May 2012. […]

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[…] all above stats care of ‘Inventory’ at VCI, in comments 7 May 2012. […]

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[…] “We’ve had 6 straight days of 300+ new listings. The last time this happened was in early April 2010 in the post Olympics listing rush. This my friends, is a rush to the exits.” – VHB (Vancouver Housing Blogger), at VCI, 7 May 2012 11:15pm […]

trackback

[…] “We’ve had 6 straight days of 300+ new listings. The last time this happened was in early April 2010 in the post Olympics listing rush. This my friends, is a rush to the exits.” – VHB (the Vancouver Housing Blogger), at VCI, 7 May 2012 11:15pm […]

VanRant
Guest
VanRant

Here a letter that I have just sent to our Finance Minister:

Hello Mr Flaherty,
I have just read the article from Diane Francis of Financial Post and I was appalled.

http://opinion.financialpost.com/2012/05/04/taxpayers-also-victims-of-hot-money-behind-canadas-condo-bubbles/

I am sure you are aware of the article and the housing bubble we’re in which is driven up by foreign (or rumors of) speculators mainly from China. It had created hardship for everyone in Canada. I seriously urge you to step in NOW and control the foreign money into the housing market and tax them accordingly. It is getting too big now and may take down the country similar to what had happened in Japan, the USA and Europe.

registered
Member
registered

96 chip Says: “If the company can find workers then the strike is basically hostage-taking.”

As opposed to the indentured servitude of lacking any protection from employers? I took you for a staunch free market kind of guy, chip. I’m surprised to see you speak so strongly against a free market mechanism to provide labour. We’re moving to a service based economy, are you really suggesting the market for labour should be government regulated in favour of the buyer? Crickies.
Archetypal union members like the CAW make less than I did on the line almost 40 years ago. Pick up the remote and turn off Sun TV. With a 0.1 viewer share (thank you, Canada!) it hasn’t long to live anyway.

chip
Guest
chip

@frank:

Technically, the owners of Air Canada – ie, the shareholders – approve the pay hike for execs. The unions don’t own the airline and cannot ( or should not) shut down its operations.

Personally, I think the govt shouldn’t intervene in strikes but I also think companies should be free to fire anyone who does strike. If the workers are truly underpaid the company won’t find replacements and the strike is a reasonable demand for compensation. If the company can find workers then the strike is basically hostage-taking.

Air Can is also a special case because the govt protect the company and its workers by restricting landing rights (competition) of foreign airlines. So for the union to shut it down and strand Canadians while simultaneously being effectively subsidized by Canadians is a bit dubious at best.

rp1
Guest
rp1

#89 @jumpin in: From the Bloomberg article: “Many countries in western Europe, as well as Australia, have achieved high homeownership rates without extensive government participation,” the IMF said.

What is the IMF smoking?

VHB
Member
VHB

We’ve had 6 straight days of 300+ new listings. The last time this happened was in early April 2010 in the post Olympics listing rush.

This my friends, is a rush to the exits.

VHB
Member
VHB

Again with the May stats, but with *good format*!

	May		
	sell	list	sell/list
2001	2703	3871	69.8%
2002	3429	4641	73.9%
2003	3279	4673	70.2%
2004	3918	6410	61.1%
2005	4434	5072	87.4%
2006	4297	5789	74.2%
2007	4228	6005	70.4%
2008	3002	7390	40.6%
2009	3524	4733	74.5%
2010	3156	7014	45.0%
2011	3377	5931	56.9%
Mean	3577	5594	63.9%
median	3429	5789	70.3%
VHB
Member
VHB

Here is the May norms. 7K listings? Oh yeah.

May
sell list sell/list
2001 2703 3871 69.8%
2002 3429 4641 73.9%
2003 3279 4673 70.2%
2004 3918 6410 61.1%
2005 4434 5072 87.4%
2006 4297 5789 74.2%
2007 4228 6005 70.4%
2008 3002 7390 40.6%
2009 3524 4733 74.5%
2010 3156 7014 45.0%
2011 3377 5931 56.9%
Mean 3577 5594 63.9%
median 3429 5789 70.3%

VHB
Member
VHB

@VHB: woops. I meant 22 total days; 17 days left. Looks like you have *18* days left and *23* total days.

VHB
Member
VHB

@good-format: Hi Good Format,

Thanks for posting these numbers. It looks like you are expecting 23 more days this month. I think there are only 22 more business days–Victoria Day is coming! So, your listings and sold projections are a bit high the way I see it. I get 2715 sales; 7718 listings as month end projections for totals.

jumpin in
Guest
jumpin in

http://www.bloomberg.com/news/2012-05-08/canada-housing-bubble-concern-shown-in-insurer-query-mortgages.html
Anyone trying to understand the concern over a potential housing bubble in Canada need look no further than the debate among government officials over whether to exit the mortgage insurance business.

Mortgageslave
Guest
Mortgageslave

@OPP

of course there is an increase in activity, don’t you see all those listings!

Anonymous
Guest
Anonymous

@OPP: wait and see… I prefer official numbers than rumours, especially rumours coming from realtors.

OPP
Guest
OPP

My gf works at a real estate office and she told me that activity has really picked up since. Apparently.the slow sales was just because of the bad weather.

Anonymous
Guest
Anonymous

“How come they never intervened to block big pay packages for the top dogs??”

They didn’t block pay packages, they blocked a strike.

The reason companies have no problem paying huge money to executives is two fold. First, the people who make the decisions (people at the top) want to keep salaries high at the top including theirs. If you pay the vice president 200K per year it makes the presidents 8M$ salary look absurd. If you pay the VP 4M$ the 8M$ looks reasonable.

The second reason is the people at the bottom overall make up most of the salary so giving them 1% has a larger impact to the bottom line than giving the executives 20%.

The problem with AC is it is really an essential service because it is a monopoly on many routes.

Anonymous
Guest
Anonymous

Wait a minute, how can it be different in Vancouver and Toronto too??

http://www.theglobeandmail.com/report-on-business/economy/housing/developer-has-no-fear-of-a-toronto-condo-bubble/article2425295/

So although it is true that there are more condos under construction in Toronto than anywhere else in North America, he doesn’t see it as worrisome: It’s just the next phase of the city’s development.

His view sets him apart as fears grow about the health of the condo market in Canada’s most populous city, where developers are building at a record pace. But Mr. Diamond is confident enough that he has raised a new $130-million fund that will be used to build more condos.

“From an urban fabric point of view, Toronto is unique in the world,” Mr. Diamond said in an interview. “It’s one of the few cities that has both a very healthy core and low-rise single-family homes almost within walking distance of the core.”

Romeo Jordan
Guest
Romeo Jordan

NFW,

Sure it can.

It won’t.

But it can.

That’s lesson one for you son.

Patiently Waiting
Member
Patiently Waiting

@good-format: If we finish at 35% or lower for May, I’m calling a crash. There is no way the market can bounce back from that, at this time of year. NFW!!!