Buyers market is a silly way to put it

What does ‘Buyers market’ mean to you?

Is it a market in which the buyer has lots of choice or gets a reasonable price?

..because they aren’t the same thing.

Now that prices are dropping from their record highs on Vancouver real estate, we’re seeing the term ‘buyers market’ bandied about in the media a lot.  And with a huge number of places for sale and actual transactions falling to a 10 year low there’s lots of choice.

But prices are still near record highs!

Real estate is a slow illiquid market, it takes LOTS of time for trends to move through.  Just take a look at the USA, there are some people thinking they’ve hit bottom in some markets after SIX YEARS of falling prices.  Don’t expect deals within a few months, or even a few years.

Real estate marketers will use the term ‘buyers market’ a lot in the coming years, because they make money off transactions.  If it’s not a good time to sell it must be a good time to buy right?

There is one nice thing happening with the shift in the local market though: the Vancouver Sun is starting to publish a bit more variety when it comes to RE market opinion:

Investors in stocks wouldn’t consider a drop in volume to be a buyer’s market in the absence of price changes. The adage that volume precedes price instructs investors to be patient. There’s no compelling reason for real estate buyers to act differently.

Bravo Vancouver Sun, Bravo.

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Bo Xilai
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Bo Xilai
3 years 9 months ago

I’ll know it’s a buyer’s market when Able Auction is auctioning off real estate agents’ repossessed E-Series Mercedes and the 7 series BMWs…

patriotz
Member
3 years 9 months ago

Since prices are always determined by the buyers, it’s always a buyers market.

The only difference is whether prices are determined by smart buyers or stupid buyers. We are still in stupid buyers mode, by a mile.

CanuckDownUnder
Member
CanuckDownUnder
3 years 9 months ago
Not sure how this got past the editors but it looks like Melbourne real estate might not be so hot after all: “Property analyst Mark Armstrong predicted appreciation would be slowest for home owners in outer suburbs, who could see negative to zero growth in values for as many as 20 years.” And there’s more! “Lots of baby boomer parents who have made money out of property gave sage advice to children to pour their money into bricks and mortar because prices double every seven to 10 years. Young people who were sold that lie will find it very difficult… Read more »
patriotz
Member
3 years 9 months ago

@CanuckDownUnder:
Despite Because of the stockpile of a record 55,290 unsold homes in Melbourne in June, many developers are still offering 100 per cent finance, with no deposit to buyers.”

That’s better.

joe_blown_away_by_high_housing_costs
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joe_blown_away_by_high_housing_costs
3 years 9 months ago
specialfx3000
Member
specialfx3000
3 years 9 months ago

Another hit to our local economy.

http://www.cbc.ca/news/business/story/2012/07/09/qlt-job-cuts.html

“Vancouver biotech firm QLT is cutting 146 jobs.”
That apparently translates to about 66% of their workforce.

Piklishi
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Piklishi
3 years 9 months ago

Just like they say ” it is buyer’s market only if money is no object”

Ralph Cramdown
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Ralph Cramdown
3 years 9 months ago

I think it’s reasonable to characterize this as a buyer’s market, regardless of price/value. The meaning of the term in R.E. has traditionally been “Who’s got the negotiating power?”

You could ask another question: Are the auctions on the courthouse steps in Florida right now buyer’s markets? The deal is: Certified cheque or draft for the entire amount, proof to be provided before bidding, all properties as is and where is, no conditions. Some amateurs have been known to buy worthless second liens when they thought they were bidding on firsts.

joe_blown_away_by_high_housing_costs
Guest
joe_blown_away_by_high_housing_costs
3 years 9 months ago

Globe and Mail’s “summer of dread” article forgot to mention the popping the real estate bubble in Canada. Economic woes in every country of the world except for the bleeding obvious one right here in Canada are discussed.

http://www.theglobeandmail.com/report-on-business/economy/summer-of-dread-dashes-recovery-hopes/article4398661/

JR
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JR
3 years 9 months ago
Consider some of the drivers for local RE prices. “Buy now” urgency, amateur investment (45% DT, 33% Van West and East, 56% UBC) on the part of those who have only known price increases, free money with liberal qualification and ridiculous terms, builders of all types going full blast with no perspective on supply/demand metrics down the road, wealthy immigrants etc. etc. While many of these dynamics feed on themselves on the way up, they will tend to cascade on the way down. There were markets in the US that saw the greater majority of their decline within the first… Read more »
VHB
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VHB
3 years 9 months ago

Happy July 9th, everybody!

Anonymous
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Anonymous
3 years 9 months ago

@Bo Xilai: …I’ll know it’s a buyer’s market when Able Auction is auctioning off real estate agents’ repossessed E-Series Mercedes and the 7 series BMWs…….

Never goingt to happen! They’re all leased! Just another peice of the swim trunks that will float away when the tide goes out.

joe_blown_away_by_high_housing_costs
Guest
joe_blown_away_by_high_housing_costs
3 years 9 months ago
Check out this bullish comment from kidcanuck1 over at Globe and Mail: “I’m always leery of widespread predictions by pundits and so called “experts” because they usually don’t happen. It’s true that if one looks at traditional measures of affordability, housing prices are way higher than they should be. However, there are other factors these days that may be more important in the determination of current prices: -The foreign element. It’s very clear that there has been a huge foreign demand for housing in Canada’s major cities. We all know about the Chinese appetite for Canadian real estate, but if… Read more »
fixie guy
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fixie guy
3 years 9 months ago

13 joe_blown_away_by_high_housing_costs quotes: “I’m always leery of widespread predictions by pundits and so called “experts” because they usually don’t happen…”

For a decade+ the overwhelming majority of pundits and so-called “experts” hailed an ever-rising and stable Canadian housing market, and the ‘reasoning’ provided is straight from the real estate pundit playbook. kidcanuck1 is a hypocrite and none too bright.

ArthurFonzarelli
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ArthurFonzarelli
3 years 9 months ago
In agree ent with Ralph…generally it connotes bargaining power at present prices. But it is misleading because it doesconnote good “value” which most of us agree is not the current situation. According to Global “News” this morning we aren’t even in a buyer’s market…the drop to 25 years won’t have any impact. This, from somebroker whom I have never heard of. I loved his comment, in essence: nothing to see here, might slow things for a couple of months but then we wil return to…ummm… (he pauses) our umm normal trend. End quote. No facts, no logic, just happiness that… Read more »
Anonymous
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Anonymous
3 years 9 months ago

@JR: “I can see no compelling argument for a slow decline in Vancouver”

Except the fact that is what we are seeing right now. We will see how much impact the new CMHC rules will have and if things fall off a cliff in the Fall (no pun intended). A European financial criss should also speed things up. I suspect the first 20% drop will come within a year and then another 30% in the next 3 to 4 years after.

Anonymous
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Anonymous
3 years 9 months ago

@joe_blown_away_by_high_housing_costs: “if the Euro implodes there will be significant flows into properties from Europeans as well, looking to put investments in “safe” currencies.”

Yes sure kind of like in 2008 when the US imploded. What we saw was US investors exit from Canadian real estate (Whistler, Okanagan, etc.) and a collapse in real estate partly fueled by this. The strong relative Canadian currency is a negative for foreign real estate investment not a positive. Funny how people get these things backwards.

Anonymous
Guest
Anonymous
3 years 9 months ago
@joe_blown_away_by_high_housing_costs: Since when CAD is considered a safe currency? If something happens to the Euro zone, the USD, Japanese yen, or Swiss fran are still considered to be the safe currencies. Not commodity price dependant CAD. If you are a European, why would you want to own real estate in Canada? Health care? Democracy? Education system? Political stability? Human rights? Climate? Their needs aren’t the same as those of Chinese. US (Hawaii included) looks a lot more attractive right now. $2500 IS a lot of money for most people unless you are a two professionals with no kids. This kid… Read more »
Makaya
Member
Makaya
3 years 9 months ago

Coming back to the debate yesterday “when do we know prices start dropping?”, we have today a clear indication that this is happening in Vancouver today.

Check out the latest post of Vancouver Price Drop.

#5) Address:# 110 721 HAMILTON ST, Uptown, New Westminster

July 07 V960713 $189,900 $-60,000 -24%

Comment: Last June the unit #107, which has an assessed value of $15K less than this unit, sold for $212K

Assessment: $211,800

Here we are folks, get your popcorn, it just accelerates from here…

Not much of a name...
Member
Not much of a name...
3 years 9 months ago

@Makaya: I’m seeing similar things in NV at the moment. Condos that I’ve been watching (that have been sitting for quite some time) are now starting to show downward movement in prices. Particular ones that have caught our eye are now asking under assessed. These are units that are about four years old and are now at about the same price they were when first purchased (including taxes and closing). We looked at a unit yesterday and the last thing the realtor said was “the vendors are motivated”. Interesting times indeed.

Anonymous
Guest
Anonymous
3 years 9 months ago

@Makaya: “Coming back to the debate yesterday “when do we know prices start dropping?”, we have today a clear indication that this is happening in Vancouver today.”

I suspect we will see a lot of price drops over the next couple of weeks. Realtors will be pushing for price reductions using the new CMHC rules as justification to push their client into lowering their asking price. They will also push clients into accepting lower offers. Realtors have to eat and those that don’t do this wont be making any sales.

Best place on meth
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Best place on meth
3 years 9 months ago

@CanuckDownUnder:

““Lots of baby boomer parents who have made money out of property gave sage advice to children to pour their money into bricks and mortar because prices double every seven to 10 years.”

Selfish boomers are now using their kids as cannon fodder to keep their own property values inflated.

Assholes.

Who's Laughing Now?
Guest
Who's Laughing Now?
3 years 9 months ago
This was, by far, the greatest weekend of opens yet! Empty opens! Lowered prices! Great to see smiles finally wiped off of smug boomer faces, whose ongoing rhetoric has continued to say, if we (gen X) just worked a little harder, we would have what they have, too. The boomer on the news recently with the house listed at $2 million for two months that has not yet seen an offer? Ha ha ha. Should have cashed out earlier. On the north shore, have seen the condo prices here fall an average of $20,000 since the mortgage tightening rules. To… Read more »
patriotz
Member
3 years 9 months ago

@Ralph Cramdown:
“The meaning of the term (buyer’s market) in R.E. has traditionally been “Who’s got the negotiating power?””

The buyers, all the time, because somebody always has to sell, but nobody has to buy.

You might not have bargaining power because someone else may be willing to pay more than you. But that means you’re not the buyer, someone else is.

gokou3
Guest
gokou3
3 years 9 months ago
@Makaya: Went to an open house at a burnaby condo yesterday. When we buzzed the unit, no one answered. Called the realtor, was told that the owner was showing the unit himself. Buzzed a few more times before being admitted. Found out that the owner was actually taking a nap. Apparently we were the only visitors with the house opened for over an hour by then. The unit was overpriced compared to similar units in the same building. No wonder even the agent didn’t show up. Oh, there’s another open house at another burnaby condo from 2-4pm. We saw the… Read more »
patriotz
Member
3 years 9 months ago

@Best place on meth:
“Lots of baby boomer parents who have made money out of unrealized capital gains on property”

That’s better. But not for them.

gokou3
Guest
gokou3
3 years 9 months ago
One more open house i want to mention. A townhome in south burnaby. Originally listed for $619k in early June. Cut price twice and now $40k lower — but is only inline in terms of $/SF with other units in the same complex. We found out from agent that the owners are a retired couple who has bought another place already. I guess they are motivated to sell. Agent said there had been 6 showings since the latest price drop and is confident that he will get a sale this week. I will cross my fingers for him — NOT.
an observer
Guest
3 years 9 months ago

This might be good for a laugh and put things in perspective when industry experts peg Vancouver at 15% overvalued…

http://vancouverpricedrop.wordpress.com/2012/07/09/apparently-vancouver-is-15-overpriced/

Anonymous
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Anonymous
3 years 9 months ago

@an observer:

LOL, how about 150% overvalued!

Dan in Calgary
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Dan in Calgary
3 years 9 months ago

@VHB “Happy July 9th, everybody!”

For some stupid reason there were fireworks last night here in Calgary. More than your usual backyard celebration. Louder, longer. Couldn’t figure out why. Perhaps whoever-it-was were ushering in July 9th!

Should we all write our MPs and suggest July 9th hereinafter be known as National Housing Awareness Day?

Joe_Blown_Away_By_High_Housing_Costs
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Joe_Blown_Away_By_High_Housing_Costs
3 years 9 months ago
French_In_Exile
Guest
French_In_Exile
3 years 9 months ago

There is a new development in East Van, on Hastings, right across the street where I live (Alba it’s called). The sales office and the presentation suite opened on July 7. Sales are starting on July 10 (why the rush? lol.). Almost NOBODY showed up… The sales guy I was talking to seemed a bit desperate…

Sweet sweet times we are living right now…

specialfx3000
Member
specialfx3000
3 years 9 months ago

@specialfx3000:

Earlier this morning I posted QLT’s downsizing news.

On this same day, another Vancouver based BIO company, Cardiome, announced an 85% reduction in their workforce. Not sure how many people that translates to.

http://news.yahoo.com/cardiome-pharma-cut-85-percent-jobs-135428364–finance.html

I would imagine these Bio companies had good-paying jobs that are now disappearing.

Definitely not the time for anyone to be over-extended and debt-laden; Jobs are being pulled under people’s feet at fast and furious pace.

Teddybear
Member
Teddybear
3 years 9 months ago

I was utterly disgusted when I saw this V960287 at http://alturl.com/zu3zr

why? Just a few months ago this suite was sold for about 320k and this a-hole want this much money now???? For one bedroom???? I don’t know how the listing agent can show his face to anyone! Disgusting, despicable greedy sob! Yuck!!!

Makaya
Member
Makaya
3 years 9 months ago

@Teddybear: Well, this is a candidate for future Vancouver Price Drop posts. Just be patient…

specialfx3000
Member
specialfx3000
3 years 9 months ago

@Teddybear:

Why don’t you set up a few appointments to get them all excited but don’t show up. Then finally, set up another one and show up and offer 319k with lots of subjects just in case they accept. Or transpose the ‘3’ and the ‘2’ and low-ball them at 230K.

gokou3
Guest
gokou3
3 years 9 months ago

@specialfx3000: Regarding QLT & Cardiome, I am told by my friend who works in this field that they are among the biggest players in the local scene. Oops.

mattymatt123
Guest
3 years 9 months ago

@Teddybear: some dum-ass flipper about to get burned!

Vote Down The Facts
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Vote Down The Facts
3 years 9 months ago

@Teddybear: “why?”

The description implies they did lots of renos. Not enough to justify an extra $100K, mind.

mattymatt123
Guest
3 years 9 months ago

@Vote Down The Facts: dum-asses!

Vote Down The Facts
Guest
Vote Down The Facts
3 years 9 months ago

@Dan in Calgary: “For some stupid reason there were fireworks last night here in Calgary. More than your usual backyard celebration. Louder, longer. Couldn’t figure out why. Perhaps whoever-it-was were ushering in July 9th!”

100th anniversary of the stampede. You say you live in Calgary?

fixie guy
Guest
fixie guy
3 years 9 months ago

24 patriotz Says: “You might not have bargaining power because someone else may be willing to pay more than you. But that means you’re not the buyer, someone else is.”

Over-simplification risks a tautology. The seller selects the buyer. Buyers compete, hence the bidding wars. The overall market determines the pool of buyers, explaining the impact of, for example, mortgage policies on prices. To my knowledge there are no pure ‘stupid buyer’ schools of economic thought in academia.

Anonymous
Guest
Anonymous
3 years 9 months ago

@Teddybear:

No matter how much reno was done, I wouldn’t pay that much money for the ground floor suite on that particular building in West End.

What a terrible investment…

mattymatt123
Guest
3 years 9 months ago
By the way. A while ago, I posted the my grams listed here east van special for $1.2 million. (assessed Value) It sold! here is the MLS listing. MLS# V950797 – Sold for $950,000.00 only 2 offers, both low-balls. She was MOTIVATED to sell, took the first low-ball and RAN! Like I had said, bought in 1950-somthing for $6500.00 and lived there 56 years… not a bad investment. The listing is gone but info still can be found. Good on ya Grama! I feel bad for the 30-somthings couple with kids that have thrown away their life on that east-van… Read more »
Mick Murphy
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Mick Murphy
3 years 9 months ago

http://www.news1130.com/business/article/380961–vancouver-housing-market-coincides-with-chinese-economy

Vancouver housing market coincides with Chinese economy
Chinese immigration peaked in 2005 matching a peak in existing home sales

Chem Guy
Guest
Chem Guy
3 years 9 months ago

@Makaya: “Below assessment” eh? BC Assessments were made last week on July 1st. We are just starting to see prices slide so what will be interesting is whether assessments will go up, down, or flat. I’m predicting flat which will likely be an awakening moment for many homeowners who eagerly open their envelopes to “see how much they’ve made” (at least in their minds) and find out that housing doesn’t always go up.

By the time assessments are published, I’m willing to bet that no house will be listed above assessment again for at least 5 years.

patriotz
Member
3 years 9 months ago

@Vote Down The Facts:
He forgot to add the smiley for the humour impaired.

random321
Guest
random321
3 years 9 months ago

V959658 Asking price is $2,490,000. Description: “Tenanted occupied with $1,665 rental income at month to month base.”

Wow, that’s the craziest price to rent I’ve seen.

Also, does it drive anyone else crazy that it’s nearly impossible to find a MLS description that doesn’t contain grammatical or spelling mistakes?

French_In_Exile
Guest
French_In_Exile
3 years 9 months ago

@Mick Murphy: Well, may be those who doubt that HAM is the reason behind these inflated prices might want to reconsider their position…

gokou3
Guest
gokou3
3 years 9 months ago

@French_In_Exile:According to article, “Chinese immigration peaked in 2005 and “was matched by a peak in existing home sales.” 2005 is definitely not a peak price or sales volume if I recall the stats correctly. I am not sure how the conclusion that “There is a clear correlation between Chinese immigration and real estate activity in Vancouver” is drawn.

Besides, correlation may not be causation. Note also CMHC’s insurance cap zoomed from $100B to $600B from 2006 to 2012 (again if i recall correctly). I would say the correlation is much stronger there.

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