2012: Worst July since 2008

Ring the bell!  July 2012 has come to a close.

Soon we’ll see the press releases from the REBGV (and more entertaining from the GVREB) but it’s starting to look a lot like 2008 again.

Sales have dropped off dramatically, we’re down about 16% from last July and about 9% from last month.

Listings are growing slower than they did in the spring, but MOI is close to what it was in July 2008 according to VMD:

July 2012 Sales:
YoY: -16%
MoM: -9%

Months Inventory:

2012-07: ~8.5
2012-06: 7.8
2012-05: 6.3
2012-04: 5.9
2012-03: 5.3
...
2011-07: 5.9
...
2008-07: 8.8

According to madashell we needed to see less than 115 listings on the last day of the month to have lower sales volume than 2008.

It looks like we just squeaked under that, Paulb says we saw 106 sales for the day.  Here are the rest of the stats for July 31st:

New Listings 186
Price Changes 137
Sold Listings 106
TI:19188

 

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French_In_Exile
Guest
French_In_Exile

Yipeee! On other less fun news, the inventory is hedging a bit lower than in 2008. But does it matter really? What is the most important metric: inventory, or MoI (months of inventory)? I’ve look around the Google and it seemed that most RE ‘pundits’ give more importance to the MoI.

Now it would be interesting to see the MoI in dead-man-walking areas like Richmond, Van West, West Van, etc…

ScubaSteve
Member
ScubaSteve
In case anyone missed it, Paul B updated his website stats to July 29th. I’d imagine these are basically going to be representative of the end of month stats. ———————– AVERAGE PRICES – MoM VANCOUVER WEST -0.6% = Detached -14.3% = Townhouses -4.1% = Apartments VANCOUVER EAST -2.9% = Detached -2.0% = Townhouses -0.3% = Apartments NORTH VANCOUVER +10.1% = Detached +5.2% = Townhouses -3.1% = Apartments WEST VANCOUVER -2.0% = Detached RICHMOND -4.1% = Detached -12.1% = Townhouses -0.5% = Apartments ———————– Notable mentions include: 1) Richmond Townhouse prices down 13% YoY (30 month low) 2) West Vancouver and Richmond Detached sales down over 50% YoY 3) North Vancouver detached hits all-time record high (???) Looks like it is going to be a really rough July. And this was WITH the mortgage rush. The first half of July had… Read more »
ScubaSteve
Member
ScubaSteve

@French_In_Exile:

It is true – if there’s one stat that says it all, it is MOI, which incorporates SALES + LISTINGS into a nice number. Richmond’s MOI is currently at 22 for detached homes. To put it bluntly: In August, only 1 out of every 22 homes in Richmond will sell. The other 21 will sit there with for sale signs up. Imagine if you were trying to sell your house and had to compete with 21 other homes, knowing only one of yours would sell. That’s a 4.5% chance to sell your house. And the house that will sell? The one that lowers its price the most…

patriotz
Member

@ScubaSteve:
All sellers have a 100% chance to sell. All they have to do is drop the price.

It’s not a matter of bad luck, just bad pricing. There are always enough buyers at some price.

JayWo
Guest
JayWo

Here’s the thing: I sense someone is cooking the books at REBGV – just two days before the end of July we stood at 54 sales. Two days later, there are 106 sales. WTF, are these numbers for real? Thoughts, anyone?

Joe Q
Guest
Joe Q

Remember that when inventory reached this level in 2008, the government did everything it could to reinflate the housing bubble – raised CMHC cap, extended amortization periods… etc. etc. etc.

Won’t happen this time. Look out below in September when market activity picks up and everyone’s attention turns back to the ongoing implosion.

Anonymous
Guest
Anonymous

The Shxt will not hit the fan until Sep/Oct. Sep is when the market is supposed to pick up. It wont. By Oct sellers will realize the market has gone no bid. We will see the real price reductions start taking place – like 25% off past sale prices. Developers will start their bulk sales. Banks will reduce credit. Construction on some projects may halt. I love the fall.

Lagos
Guest
Lagos

@patriotz: It’s not a matter of bad luck, just bad pricing.

The funny thing is how many view it as bad luck, when a sharply priced property right now would sell for just a bit under a record all time high price.

Instead people hold out for ‘what it’s worth’ and ride the market all the way down, just like we saw in the US.

jesse
Member

@Lagos: “Instead people hold out for ‘what it’s worth’”

Probably because when they sell they will soon be buying again, even the purebred speculators who just can’t seem to walk away from the table.

registered
Member
registered

9 jesse Says: “…when they sell they will soon be buying again, even the purebred speculators ….”

How does a zero sum scenario of owners and speculators buying soon after they sell reconcile with the explosion of listings in the US? They can’t all be foreclosures.

Simple
Guest
Simple

July average prices are posted on Yatkowsky’s Blog.

http://www.yattermatters.com/2012/08/three-arrows-down-vancouver-average-prices/

Just so beautiful.

Does anyone know when was the last time that detached prices declined for 5 consecutive months?

VMD
Member

looking at larry’s SFH Average Price stats:

2012-07 1041325
2012-06 1061067 (-1.9% MoM)
2012-05 1073311 
2012-04 1106683
2012-03 1155521
2012-02 1235244 (-15.7% vs all-time high)
...
2011-07 1133357 (-8.1% YoY)
...
2010-10 1058579
2010-09 1016324 (back to Sept 2010 level)
900kCrackHouse
Guest
900kCrackHouse

I don’t even talk about housing anymore with some friends. These are the friends that have bought 800k to 1 million dollar homes and are in their early thirties. Being close friends, it is disconcerting how badly they will be hurt when this bubble falls apart. So I don’t talk about it. Tried to warn them though. Anyone else feel the same way?

900kCrackHouse
Guest
900kCrackHouse

Also, I looked at the SOLO development. Doesn’t look like much work has started despite the high number of units apparently sold.

Will there be a market for the 4 – 45 storie towers? Pros are the location with respect to the sky train and brentwood mall. Also, it is the best of the 4 condo sections of Burnaby. Cons are that is a lot of units! Will bosa get screwed again by the market similar to the Legacy development in 2008? Or, considering they haven’t started construction, do they have time on their hands?

Boombust
Guest
Boombust

On the ground report…

I was strolling around the Burke Montain area of Coquitlam this morning.

There is a stretch of newly built townhouses (The Breeze) on Coast Meridian between Gislason and David. Mostly empty.

On Gislason Ave, between Coast Meridian and Soball, there is a long row of new-build SFHs. All unsold.

In fact, it doesn’t even look as though they are even going to bother anymore with having an agent on hand or to have any open houses. Too much bother for so little return.

The lawns/landscaping have been let go. There isn’t even the pretense anymore of a spit and polish development.

This is only ONE small area of the newly-developing Burke Mtn. neighbourhood. They are all highly overpriced in this current market.\

Look for huge downward “readjusments”. Nyuk, nyuk…

VMD
Member
900kCrackHouse
Guest
900kCrackHouse

@Boombust: Thanks for the update. Just wondering, what kind of prices are we talking for the houses and condos?

900kCrackHouse
Guest
900kCrackHouse

Also had a question for VMD. How are things looking on the Chinese real-estate forums?

VMD
Member

@900kCrackHouse:
For me, it’s boring to the point where I don’t feel very motivated to post. As I said a few days ago, it was more fun as a contrarian fighting a uphill battle in early 2011. Now even the bulls are adapting their stance to “we all know it’s falling, but I guarantee it won’t fall too much for too long, sellers should wait it out” (Their stance used to be “UPUPUP to the Moon!” lol)

I used to get a good share of jeers and typical bullish trash talk, but since a few months ago the resistance almost completely stopped.
It’s not that fun for a bloodthirsty warrior to walk onto the battlefield finding most of the enemies already deserted or defected.

GVREB
Member
GVREB
Greater Vancouver Property Sellers are faced with a weakened pool of buyers after changes in credit conditions. FOR IMMEDIATE RELEASE ON VCI VANCOUVER, B.C. –August 1, 2012 – Property sellers in Greater Vancouver were met with changes in credit conditions which has reduced the purchasing power of the decreasing pool of buyers. The current standoff between unmotivated sellers and value conscious buyers resulted the lowest sales volume for the month of July in the past 12 years. Daily sales volumes also deteriorated towards the end of the month falling from 117 units per day in the first half of the month to 86 units per day in the last half of the month. Sales volumes decreased as the effects of the changes in credit conditions began to widely affect the market at all levels. We now see that prices have… Read more »
Boombust
Guest
Boombust

#17…

“The Breeze” townhouses are now trying to fetch “…from $399,000 and up!”

(they started off in the low 500k’s last year…

and, the new SHHs are trying to get from the high 7’s to the 8’s.

The agent flogging The Breeze is Chris Neely for Remax All Points Realty.

VMD
Member
Madashell
Guest
Madashell

@GVREB: We did it!!! Sales are 1% lower than 2008 (2174 vs 2144). Pat yourselves on the back vancouver.

Boombust
Guest
Boombust

I kept telling everyone I know that THERE IS NO WAY this province will escape a serious recession. It has NEVER happened in the past.

The Fed response to the 2008 “crisis” was a head fake. It bought BC a little more time, that’s all.

We are always the last in and the last out of any recession/downturn.

This economy is going into the dumpster. As usual, the average Joe will ask, “What happened?”

Anonymous
Guest
Anonymous

@VMD: So, at least four of you even think unemployment is a good thing? Yup, the hight of bitterness and cynicism.

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