The ‘right price’ keeps changing

Yesterday we heard from a Vancouver Realtor about why condos aren’t selling.

They’re overpriced.

And now there’s this article in the Vancouver Sun Buyers on the Sidelines as Market Slows.

Its all about the market slowdown – we’re now seeing the lowest number of sales since 2000 in Vancouver.

Nice houses that are priced right are selling within days, some in bidding wars. But anything priced too high or considered undesirable is apt to sit idle in this market, which is, according to the Real Estate Board of Greater Vancouver, witnessing the lowest total sales for the region since July, 2000. The Board reported 2,098 property sales in July, a drop of 11.2 per cent compared to June. It’s a drop of 18.4 per cent compared to July, 2011.

There are many anecdotal stories around the Lower Mainland about houses that have sat on the market for months, priced too high for the more price-conscious market. A six-year-old West Vancouver home on a 21,000-square-foot lot overlooking Capilano Golf & Country Club was originally listed at $3.695-million three months ago. The owners have reduced the price by $400,000 and it still hasn’t sold.

“There is a lot of product but it’s not selling for the price that people expected or hoped for,” says real estate finance expert Tsur Somerville, who is director of the University of B.C.’s Centre for Urban Economics and Real Estate. “People aren’t buying at the prices that are being set.”

Well here’s a funny thing about ‘the right price’ in a correcting market: it keeps changing.

I live in a BC market that is several years into it’s correction and I can tell you that the places that are selling are moving only at prices that are lower than the ‘right price’ a year ago and far lower than the ‘right price’ several years ago.

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Anonymous
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Anonymous

To Bullshit,
Im telling what I know to be the truth. You, little man, are speculating. And that is what has Vancouver in the situation its in now..

trackback

[…] “I just woke from a nightmare. In it, I had a speckerfriend (a real person), come over yelling at me if I want to help make 12 million bucks. I said how? He replied building a mansion in Whistler. I face palmed and said haven’t you seen vancouverpricedrop? He’d never heard of it, I told him he would be lucky to get 8 mill in this market. A desperate look came over him, I asked how much to break even? He said 3 million, I told him I would think about it …and then I woke up !” – Loon at VCI 15 Aug 2012 7:34am […]

rp1
Guest
rp1

@VHB: He is using zero for weekends. There’s always 2/7 weekend days, and their sales must show up somewhere. The 7 day average may fluctuate during the week, but for week-on-week changes it’s simple and sound.

VHB
Member
VHB

@good-format: Hi. Thanks for responding. Could you check your formulae? I think it is impossible to get an average of 141 listings no matter what days you include since we have all days above 141 listings. There was a holiday, so maybe you are including that 0 as a 0 rather than as missing. But that holiday is outside your definition of a 7 day window. Thanks.

bullshit
Guest
bullshit

Patrick_Saint – it’s impossible that a 4 sales a month Realtor who wants to work has sold nothing since May. Maybe he is down to 2 sales per month which is still on average $15,000 commission or $180,000 per year. So the poor guy drops to $180,000 from $360,000. But to zero, absolutely unlikely.

Start telling the trust or this blog is getting worse than Garth’s idiots and pack of trolls.

good-format
Guest
good-format

@VHB:

I use 7 day’s data (regardless whether it is working day or not).

midnite toker
Member
midnite toker

Oh and It’s in langley too. Good luck with your commute!

midnite toker
Member
midnite toker

Jesus Chris look at this, is this desperation or what ? Pay 0% interest for the first 2 years. Next 5 purchasers only !

http://www.outlookliving.com/

Their Math seems a little fishy

exx
Member
exx
@Anonymous: We went to a show home (V933008) over the weekend which had a giant red front door entrance, fortune cookies everywhere and a Chinese Cooking book in the kitchen. Not many other people there, just two other couples we ran into at each one – my guess is they were also bored and wanted to see a few overpriced homes. All of us were the wrong ethnic target of this home anyway. This place was listed Feb 18th 2012 for $824,900 and is now up for $779,000. The others near it with mostly identical floor/land areas are still priced in the $849,000 range. Good luck! We went into one which didn’t even have a finished basement, the Realtor kept reminding us that the two homes between this one have already sold. When I asked her how long it was… Read more »
VHB
Member
VHB
Aug-2012	
Total days	22
Days elapsed so far	10
Weekends / holidays	5
Days missing	0
Days remaining	12
7 Calendar Day Moving Average: Sales	94
7 Calendar Day Moving Average: Listings	197
SALES	
Sales so far	834
Projection for rest of month (using 7day MA)	1126
Projected month end total	1960
NEW LISTINGS	
Listings so far	2068
Projection for rest of month (using 7day MA)	2362
Projected month end total	4430
Sell-list so far	40.3%
Projected month-end sell-list	44.2%
MONTHS OF INVENTORY	
Inventory as of August 14, 2012	18826
Current MoI at this sales pace	9.61

Interestingly, my projected end of month sales and listings are close to those by goodformat. The difference is only the 7-day average row in his post. I’d be grateful if goodformat could clarify.

BTW, last Thursday we had 120 sales. That falls out of the 7day average tomorrow. If we don’t match 120 on Thursday this week, the projected sales figure for the end of the month will fall.

VHB
Member
VHB

@good-format: Hi goodformat. How can your 7 day averages be right?

7-day avg 141 67

We do not even have **one** day of listings under 141. How can the average be 141? Similarly, the sales average is too low–I get 93.8 for the last 7 calendar days. Just trying to clarify.

southseacompany
Member
southseacompany

Oops. Losing a few potential buyers.

“Number of young people leaving B.C. soars – likely reasons include slow economy, pricey housing”

http://www.theprovince.com/business/Number+young+people+leaving+soars+likely+reasons+include+slow+economy+pricey+housing/7096450/story.html#ixzz23gRoHljL

Anonymous
Guest
Anonymous

@McLovin: wait for what? you are not becoming a homeowner any time soon with that 100k, you know that. but, guys like you, alway say having billion of dollars.

McLovin
Guest
McLovin

Inventory remains stubbornly high.

Just wait till the “fall selling season” rolls around.

BHAHA HA AHA HA AHAHA AHA H

Patrick_Saint
Guest
Patrick_Saint

I only know one realtor because my wife’s friend married him. He is a full-time REALTOR who was selling 4 units/houses a month for the last whatever years but he hasn’t sold anything since May..
He asked me on Sunday if my industry was hiring

VMD
Member

MSM articles like this will continue to erode people’s confidence in RE:

“Canadian home prices falling steadily”
8/15/2012
– “Home prices continued to decline across the country in July and the pace of the depreciation is picking up, according to the Canadian Real Estate Association.”

http://www.ottawacitizen.com/business/fp/Canadian+home+prices+falling+steadily/7094482/story.html#ixzz23g7uaOpS

Anonymous
Guest
Anonymous

@Jp: Of course they don’t. Cue the tooth fairy.

good-format
Guest
good-format
Copied from PaulB’s number http://www.laurenandpaul.ca Date Listing Sales S/L Price(+-) Inv Inv(+-) Aug-01 258 61 23.6 99 18,708 Aug-02 182 49 26.9 114 18,740 32 Aug-03 202 93 46.0 92 18,799 59 Aug-06 0 0 0 0 - Aug-07 232 113 48.7 128 18,784 -15 Aug-08 210 49 23.3 105 18,851 67 Aug-09 195 120 61.5 119 18,816 -35 Aug-10 169 96 56.8 118 18,806 -10 Aug-13 206 103 50.0 124 18,788 -18 Aug-14 239 97 40.6 125 18,811 23 Aug-15 175 53 30.3 110 18,826 15 Total-Cur 2,068 834 40.3 1,134 118 7-day avg 141 67 47.7 85 -4 Total-EST 4,458 1,973 44.3 2,581 18,765 54 August numbers year sell list sell/list 2001 2566 3315 77.4% 2002 2468 3287 75.1% 2003 3290 3693 89.1% 2004 2537 3986 63.6% 2005 3649 4366 83.6% 2006 2998 4500 66.6% 2007 3384 4408… Read more »
Jp
Guest
Jp

“Funny about the collection story.. all the Realtors I know are buying new cars. Keep in mind that only about 1,000 Realtors actually work. It’s the old 10% of the Realtors do 90% of the sales. The others just hold a license to help a friend or relative or themselves save a few bucks.”

It’s true guys. Realtors don’t suffer like you think.

Anonymous
Guest
Anonymous

@Realtor says: I don’t think you’re a troll but you are very naive if you think that 3x in 3 years is anything more than dumb ass luck meeting wealthy idiots on parade

Realtor says
Guest
Realtor says

Funny about the collection story.. all the Realtors I know are buying new cars. Keep in mind that only about 1,000 Realtors actually work. It’s the old 10% of the Realtors do 90% of the sales. The others just hold a license to help a friend or relative or themselves save a few bucks.

Realtor says
Guest
Realtor says

I’m a troll cause a house sold for 3X as much in just 3 years…
Imagine where prices will be in 3 years from now..
You can keep renting 😀

N
Guest
N

@Eddie:

Not that I don’t agree. I do agree, but the CMHC changes only impact a few specific sections of the market at the moment. For example, they have no impact on move-up buyers who have a large down payment available. (I know they will, in future, when first time buyers stop buying the move-up buyers’ houses.) This makes me think that people are also choosing to put the brakes on, not only because they can’t get the financing, but because they sense that things have changed. When they know that things have changed, and the CMHC changes have worked their way through the whole market, the drop off will be greater.

Eddie
Guest
Eddie

@N: The CMHC are the ones putting the brakes on. Without them this bubble would have never materialized because the banks would have had to shoulder the risk and would have been far more carefull – regardless of interest rates.

Best place on meth
Member
Best place on meth

@Realtor says:

You’re right troll, there will always be some sales and we need some sales otherwise prices can’t move down rapidly as desperate people take whatever they’re offered.

If sales ground to a halt then prices would freeze in a Mexican standoff.

So come on buyers, we need a few of you to take one for the team!