Detached home sales collapse in June

Wow.

It looks like the number of detached home sales in a number of lower mainland areas are coming in very low for June this year.

It’s useful to look at what sales looked like in June 2012 compared with the last many years.

Fortunately Inventory posted a bunch of month-end stats showing exactly that this weekend.

Here’s Richmond, which saw an all-time low number of sales of detached homes:

1995 = 112
1996 = 114
1997 = 144
1998 = 105
1999 = 135
2000 = 128
2001 = 160
2002 = 139
2003 = 166
2004 = 147
2005 = 248
2006 = 170
2007 = 198
2008 = 115
2009 = 204
2010 = 139
2011 = 158
2012 = 73 **June 28

Here’s what’s happening with detached sales on the west side:

1995 = 108
1996 = 133
1997 = 140
1998 = 126
1999 = 152
2000 = 125
2001 = 189
2002 = 150
2003 = 180
2004 = 154
2005 = 185
2006 = 181
2007 = 177
2008 = 108
2009 = 200
2010 = 147
2011 = 213
2012 = 99 **June 28

..And here’s the East side, which up until now has been one of the last ‘hot-spots’ It is now also at an all time low:

1995 = 145
1996 = 175
1997 = 185
1998 = 136
1999 = 233
2000 = 185
2001 = 269
2002 = 203
2003 = 282
2004 = 243
2005 = 303
2006 = 396
2007 = 244
2008 = 139
2009 = 238
2010 = 145
2011 = 180
2012 = 107 ***June 29

Thanks Inventory for all the numbers!

It will be very interesting to compare July to previous years since we’ve got about one more week until the new mortgage rules come into force which includes reseting the amortization limit back to 25 years.

Here’s a very informative chart showing the effect of amortization and interest rates on the ability to buy based on Vancouvers Median after-tax income (click to see large). This was posted by Taipan over at Real Estate Talks:

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crashcow
Member

“Vancouver market never went up on fundamentals so why would it go down on fundamentals?” -Rennie

A trebuchet never goes up on gravity, why would it go down on gravity?

You couldn’t pay these morons to act any dumber

Makaya
Member
Makaya

Apocalypse Please:

declare this an emergency
come on and spread a sense of urgency
and pull us through
and pull us through
and this is the end
this is the end of the world

it’s time we saw a miracle
come on it’s time for something biblical
to pull us through
and pull us through
and this is the end
this is the end of the world

proclaim eternal victory
come on and change the course of history
and pull us through
and pull us through
and this is the end
this is the end of the world

Bo Xilai
Guest
Bo Xilai

@crashcow: Mr. Rennie, Vancouver real estate went up based on low interest rates and plentiful capital supplied by Canada’s banks, abetted by the CMHC.

You still have abnormally low interest rates (for now) but the plentiful capital has been knocked out by a fearful minister of finance.

Rennie is a moron who know sophistry very well…

Rightsizer
Guest
Rightsizer

@crashcow: If foolishness got us into this mess why can’t it get us out?

GVREB
Member
GVREB
Large Selection of Available Properties Fails to Lure Buyers into Slow Vancouver Real Estate Market FOR IMMEDIATE RELEASE ON VCI VANCOUVER, B.C. –July 1, 2012 – Real estate sales activity in Greater Vancouver continues to sit at lows not seen in over a decade. Daily sales volume in June 2012 fell further to 113 units per sales day from 130 in May, a decrease of 13 per cent. Consistent with the seasonal trend, the pace of new listings has decreased but at a lower rate than the decrease in sales. This resulted in the second lowest sale to list ratios for the month of June since 2001 and well below the historical average for the month of June. Sales have been slowing for 12 months and this has resulted in a near-record inventory level for this time of the year.… Read more »
crashcow
Member

REBGV Press Release: Market just keep on getting more and more balanceder.

registered
Member
registered

@1 crashcow: Rennie is reverting to the Best Place on Earth card again, implying the money buying Vancouver homes is earned elsewhere and therefore not part of local economic fundamentals. The new here won’t recall years past when the BPoE was BC and ‘elsewhere’ referred to legions of retirees from Alberta and the US. Those buyers never benefited from free helicopter trips though, presumably for not being recognizably Albertan or American enough in photo ops.
It tries to rationalize the insufficient household median income figures generated by the CRA. It appears they prefer to argue Vancouver prices are supported by foreign tax cheats who hide offshore income and don’t contribute to Canadian society than risk the idea of being overpriced. It adds a special resonance to industry statements about local self-delusions of affordability.

specialfx3000
Member
specialfx3000

Looking at those June numbers, great time to grease the tracks for VCI coaster.

For the new clubs that are joining us, welcome aboard. Hang on tight!

http://vancouvercondo.info/coaster

VHB
Member
VHB

Here are the rough final June numbers, collected from PaulB and Larry daily. These won’t match exactly the official numbers since a few sales and listings sometimes slip in after Paul has a look at the numbers.

Jun-2012	
Total days	21
Days elapsed so far	21
Weekends / holidays	8
Days missing	0
Days remaining	0
7 Calendar Day Moving Average: Sales	103
7 Calendar Day Moving Average: Listings	261
SALES	
Sales so far	2423
Projection for rest of month (using 7day MA)	0
Projected month end total	2423
NEW LISTINGS	
Listings so far	5551
Projection for rest of month (using 7day MA)	0
Projected month end total	5551
Sell-list so far	43.6%
Projected month-end sell-list	43.6%
MONTHS OF INVENTORY	
Inventory as of June 28, 2012	19630
Current MoI at this sales pace	8.10

In particular note that Paulb includes raw land in his inventory count, whereas the number in the REBGV monthly report does not. So, the MoI may not come in over 8.0 on the official REBGV report.

All those caveats included, this was a low-sales June!

VHB
Member
VHB

… and let’s talk about July now.

July typically has sales and listings about 15-20% lower than June. This year, we may see a little sales bump if anyone is trying to get in before the CMHC rule changes. (Although, the last few days of June don’t really show that kind of rush, do they?)

		
year	sell	list	sell/list
2001	2618	3504	74.7%
2002	2670	3929	68.0%
2003	4023	4447	90.5%
2004	3019	4785	63.1%
2005	3652	4107	88.9%
2006	2732	4370	62.5%
2007	3873	4924	78.7%
2008	2174	7104	30.6%
2009	4114	5061	81.3%
2010	2255	4138	54.5%
2011	2571	5097	50.4%
Mean	3064	4679	65.5%
median	2732	4447	71.3%

I think it isn’t crazy to expect sales to come it at 2000. I wouldn’t expect a flood of listings–maybe 5000?

With inventory approaching 20K, having 2K sales moves us close to double digit MoI.

At 10 MoI, the historical MoI to price change relationship predicts a monthly HPI price drop of around 1.25%. You have to get MoI over 12 to get closer to 2.0% per month.

Piklishi
Guest
Piklishi

Does Rennie believe what he says? The answer is no but he has no choice he must fool himself. I wonder if they will ever admit that the crash is already happening. Check the listings mr REnnie.

patriotz
Member

@Piklishi:
He doesn’t fool himself.

Like the magician, he knows it’s a put on, but he must act like he believes it in order to fool the audience.

silverfish city
Guest
silverfish city

@Piklishi: Does the used-car salesman believe it when he tells you that the steam coming from under the hood is due to humid weather and not a cracked radiator?

Makaya
Member
Makaya

I can’t remember if this article from The Economist has been posted already.

Time for a bigger needle

And Canada’s housing market looks very frothy on some measures: The Economist’s analysis of price-to-rent ratios suggests that Canadian properties were about 75% above their long-run “fair value” in the first quarter of 2012

Makaya
Member
Makaya
The crying babies are out! Banks warn Ottawa over lending rules The federal government’s efforts to cool the overheated housing market are raising concerns among Canada’s biggest banks that the changes might hit the economy harder than intended, particularly if the new measures are left in place for too long. (…) “It’s hard to argue that they shouldn’t be doing something to slow this down,” David McKay, head of Canadian banking at RBC, Canada’s largest bank, said in an interview. “But what is the longer term implication of all this in a higher rate environment? And do we pull back too tightly on the reins?” Though he argues rising household debt and escalating housing prices required Ottawa to step in, Mr. McKay said he is concerned the changes may only be needed on a temporary basis and could do inadvertent… Read more »
mls v950298
Guest
mls v950298

@Rightsizer: Fear!, fear will take the house of cards down!!

avocat du diable
Guest
avocat du diable

I want my summer back.
I cant afford anymore heating costs in July.
Nor can I take rainy and cold rotten weekends on my only free time left from the hectic working week.
Where is my summer?
After all this is the best place on earth!
I want my summer right here right now. Please do smth.

Crikey
Guest
Crikey

@Piklishi:
“I wonder if they will ever admit that the crash is already happening.”
Look to the U.S. counterparts for a preview. We’ve seen this movie before. People life Rennie will NEVER admit it is happening in real time. He and his cohorts will only ever admit that prices have fallen in the (recent) past, and try to argue that it makes NOW an excellent opportunity to buy, because the worst is over.

Anonymous
Guest
Anonymous

@avocat du diable: …..I want my summer right here right now. Please do smth…..

Obviously a newcomer to the West Coast! Summer in Vancouver starts in mid-July and ends typically in Late August, sometimes it goes into September. This has always been the case; it’s not global warming that’s somehow paradoxically making Vancouver colder and wetter than usual. It’s the trade off from living in the East: trade no winter for no summer. And yes, it sucks – big time! It makes Vancouver, not the best place on earth, but the worst place in Canada. And once all the idiots from the East/Abroad that have purchased RE here in the last 10 years figure this out, they’ll be a rush to the exits like this province has nver seen!

crashcow
Member

@Makaya: Druglord floods the streets with cheap drugs. Addicts are euphoric while druglord & dealers make obscene cash. Soon, everyone and their dog is either dealing and/or snorting. Druglord’s operations get so big he’s worried about getting caught. He cuts supply drastically to save his own ass. Dealers & addicts bitch and pray its not permanent. Recovery is never pretty but absolutely necessary.

Daily Dancer
Guest

Well, I’m not buying any time soon. But, maybe there is hope.
My buddy and I wrote a song…
http://www.youtube.com/watch?v=1Wnu_JZRiMk

Loon
Guest
Loon

@ daily dancer, either your songs goes viral or epic fail. Either way vancouver real estate will still go down in price.

Anonymous
Guest
Anonymous

@Anonymous: Everybody I speak to agrees that the weather in Van has been getting worse over the past 4 or 5 years. Statistics confirm this. June usually has 11 days of 20+ temps. I think we has one day this June over 20

Fort Mac
Guest
Fort Mac
Alright folks, I need to get some information on salaries in Fort Mac. I have just been informed my twenty something cousins are rolling in dough up in Fort Mac. The one cousin (27) is managing 5 Telus shops in Fort Mac, of course without any education, and has a house, and is raking it in. The other one is a 25 year old accountant for a synthetic crude company in Fort Mac apparently making 225k – also has a house. Now, the one that is making 225 was supposedly making 150k last year, but when I checked with my CA and CFA buddies here (all in their 50s and 60s), they said there is no way that any accountant is making anywhere near that. Now if these salaries really are true, why are we all not working up in… Read more »
Chem guy
Guest
Chem guy

@Fort Mac: I attended a conference in Edmonton a month ago and the mayor of woodbuffalo presented fort Mac stats and average household income was 192k. Why don’t we all go up there? Well. If oil prices drop below 70 and stay there….watch for unemployment in e fort! Boom bust economies are tough if you’re not a saver.

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