Friday free-for-all!

Are you ready for a long weekend?

It’s time for our regular end of the week news round up and open topic discussion thread!

BCREA: Average home price to dip 7.8%
MOI: This one goes past eleven?
The top ten weakest markets
Cheatsheet: What percentage drop equals rise?
Genworth: Condos demand will continue
Jump in claims pinch CMHC
Falcon flies away from cabinet
Interrupted by dancing butterflies
Phoenix realtor on bubble bloggers 2006
What that market did after

So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!

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Proud and extremely rich Chinese home owners
Proud and extremely rich Chinese home owners
8 years ago

House built in 1957,at Sophia and E25 sold to a Chinese for 850000,who said Van RE is collapsing?

jesse
8 years ago

@Fixie guy: “Unless I’m mis-reading it, jesse’s metric is based on an overly optimistic picture of rent that is unsupported by Statscan or Sauder data. His conclusion therefore is too bullish.”

The CMHC survey data is at odds with rented accommodation. I have not been able to resolve this except to state that CMHC tracks a similar rental universe to 10 years ago. They are claiming rents increasing above inflation and this aligns with some of the longer-term property managers I have conversed with. CPI rented accommodation includes units not in the CMHC survey including detached houses, non-purpose-build units, and secondary suites.

My gauge is likely on the high end of the range, and it would make about a -10% difference in price-rent reversion.

Fixie guy
Fixie guy
8 years ago

@115 rp1: My rent didn’t come close to to a 50% nominal increase over 10 years, never mind inflation adjusted. Unless I’m mis-reading it, jesse’s metric is based on an overly optimistic picture of rent that is unsupported by Statscan or Sauder data. His conclusion therefore is too bullish.

RFM
RFM
8 years ago

China factory activity index declines

http://www.reuters.com/article/2012/09/03/us-china-pmi-hsbc-idUSBRE88201E20120903

A stone tossed in the pond makes ripples on the other side…

WOWSERS
WOWSERS
8 years ago

WOW up here on whistler all weekend, this place is jammed packed busiest I have seen all summer, the last horraw before reality kicks in and listings pile in , forecast is for a warm fall plenty o time to sell your housing before prices freefall

RichmanAnon
RichmanAnon
8 years ago

Aspies of Vancouver unite.

VHB
VHB
8 years ago

Housing markets move so slowly; only one datapoint per weekday. These long weekends are extra-tough on data hungry dudes! Need more numbers!

Epte
Epte
8 years ago

Didn’t mean to imply below that the best way for housing prices to go down is just more things being built, or built with no thought as to what local buyers really need.

Obviously, there are many ways for things to get better, from market corrections to better city planning, etc.

Proud and extremely rich Chinese home owners
Proud and extremely rich Chinese home owners
8 years ago

House on 32+Dumfries was sold to a Chinese for 1.2 million who said Van Real Estate will collapse?

Romeo Jordan
Romeo Jordan
8 years ago

Etpe, agree, just did a bike ride around 40km of the westside, lots and lots of new builds for sale, very few Sold signs, slow market for sure, but we need MORE For Sale signs, I think 20MOI to get prices to come down quickly…

Epte
Epte
8 years ago

@patriotz: “Oh it will get bought and the more that is built the lower the price will be.” Yes, I guess that’s one way things could break, and certainly that would be the best in terms of making housing more affordable. I think one thing I had in mind when I wrote about the suicidal behaviour of builders here is the race to get all those multimillion-dollar new SFHs up in Van West. There seem to be very few people buying the ones that are already up, not to mention many of the big houses constructed in the mid and late 90s. Many of these places look to have been empty for some time. Within a block or two of where I’m renting, I can think offhand of about a dozen large newer SFHs that have now been on the… Read more »

Anonymous
Anonymous
8 years ago

@Epte: “Maybe the industry will consider taking a breather from what’s starting to look like a suicidal race to build stuff no one’s going to buy.”

Most of it will have to be pre-sold prior to starting construction. Otherwise the developer can’t get financing for the project. The suicidal part is those who buy the pre-sales. Especially if their intention is to flip them.

patriotz
8 years ago

@Epte:
“Maybe the industry will consider taking a breather from what’s starting to look like a suicidal race to build stuff no one’s going to buy.”

Oh it will get bought and the more that is built the lower the price will be.

Crikey
Crikey
8 years ago

@YLTNboomerang: “I understand the reason for that clause is not nefarious, it is strictly to stop the seller from going behind the salespersons back and selling direct if the used house salesperson finds a buyer” You must be thinking of the two clauses, 5(A)(i) and 5(A)(ii), above the clause which we’ve been discussing, which is 5(A)(iii). IThose first two clauses cover what you are talking about, and I don’t see how 5(A)(iii) would do anything other than say “As long as there is a willing buyer at the price we agreed to, you owe me commission”. Not that I think that is nefarious, though. “5. LISTING AGENT’S REMUNERATION: The Seller agrees: The Seller agrees: A. To pay to the Listing Agent a gross commission of $____ of the sale price of the Property….if: i) a legally enforceable contract of sale… Read more »

Epte
Epte
8 years ago

Jesse, re: your presentation: I just posted some of these thoughts below over at VREAA, but also wanted to post them here in case commenters on this blog might have responses to these suggestions as well. I really like the simplicity and clarity of the main points and the graphs. This to me looks like a terrific “pocket” analysis/presentation/synopsis of what’s going on in Vancouver and how that relates to certain economic facts and trends. Wouldn’t it be fun to mail this presentation to: 1). Everyone on City Council 2). MLAs and MPs 3). CHMC 4). Flaherty 5). Every bank-economist pundit one can find 6). Tsur Somerville and his UBC department/institute 7). Mayor Robertson’s affordable housing committee 8). Every MSM reporter who “covers” RE, and their bosses 9). Realty firms (oh, wait, don’t waste your time) And don’t forget to… Read more »

patriotz
8 years ago

@rp1:
“I think even existing owners, if they’re spending money to renovate and rent out suites, are crazy.”

Owners would be better off selling, but if they don’t want to sell, putting in a suite gives a good ROI because it maximises utilisation of the lot, which they are paying for anyway.

Vote Down The Facts
Vote Down The Facts
8 years ago

@rp1:

In 2006 I got a 2 bedroom in a brand new Yaletown building for $1750. Today, anything of the same quality starts at about $2300.

jesse
8 years ago

@Fixie guy: “The rent figures in the presentation seem seriously at odds with the Sauder’s data. It shows rents uniformly falling for a long time.”

Sauder data uses “rented accommodation” however Statscan defines it. Based on the research I’ve done on same unit rents the CPI measure does not line up with what landlords have reported their rental growth has undergone over the past 10 years.

The argument is even stronger of OER/rented accommodation under CPI, if we use the more dovish CMHC measure the argument is still calling for significant overvaluation. Thanks for the comment.

rp1
rp1
8 years ago

@Fixie guy: Rental anecdote. From 1999-2004 I rented a 2 bedroom basement suite in East Van (Renfrew) for $600 plus 1/2 utils. This was a good price at the time, and asking prices in the paper were up to $750. The place was good but certainly not fancy. It was an old house and the bathroom was a typical hole in the wall. And there was no Skytrain for quite a while. It’s hard to find a perfect match for quality and area, but I’m seeing a lot of places that are nicer for $1000. Here’s one for $900. http://vancouver.en.craigslist.ca/van/apa/3188862733.html My sister in law was renting a place like this in this location for $800 (bad price) 10 years ago. I’d say rents have increased at most 50%, which is significant compared to incomes in this city. But the price… Read more »

YLTNboomerang
8 years ago

@JD: I understand the reason for that clause is not nefarious, it is strictly to stop the seller from going behind the salespersons back and selling direct if the used house salesperson finds a buyer

Fixie guy
Fixie guy
8 years ago

@107 jesse: The rent figures in the presentation seem seriously at odds with the Sauder’s data. It shows rents uniformly falling for a long time.

Anonymous
Anonymous
8 years ago

Re: Bidding Wars

If pricing low and getting a bidding war going was the best way to get the maximum price for a property all houses would be sold this way. This is the best way for a Realtor to make a quick and easy commission and create a little publicity. In some cases this may make sense for a seller but in most cases the seller will get less even if they do get over asking.

I recall a condo bidding war several years back where a unit was priced at $299 and sold for $325K. The seller thought they did well because they got over asking. A week later the same floor plan unit came up for sale listed at 375K and sold for $360K within a 2 weeks of going up for sale.

Anonymous
Anonymous
8 years ago

@JD: “The plan was our agent’s, and this is why we didn’t have the clause.”

So what did you have in the contract? Did you have to have an offer to your satisfaction meaning you could have turned down any offer and the Realtor gets nothing or was there a number set at X above asking?

Anonymous
Anonymous
8 years ago

@Vote Down The Facts: “Maybe they just crossed out the clause from a standard contract?” You have to do more than cross it out otherwise the Realtor would get no commission. You would have to add in another clause that states how and when the Realtor is paid. This is a standard clause in every real estate contract. Most people do not realize it is there. The other thing that can happen is if the buyer does not come up with he funds at the time of completion the Realtor still collects the commission from the deposit. There is precedent for this as well. Based on JDs comments #94 where he was not aware of such a clause I bet the clause was left in his contract and he just didn’t realize it. Otherwise his comments would have reflected his… Read more »