Market moves for August 2012

Another month has come and gone.

The Real Estate Board of Greater Vancouver (REBGV) should release their market update for August any day now, buy in the interim we have the always entertaining GVREB and their news release.

The GVREB uses factual statistics, numbers and market data in their press releases just like the REBGV, but I think you’ll find the spin is a little different

Motivated Sellers Move Prices Downward in Extended Weak Market.

FOR IMMEDIATE RELEASE ON VCI

VANCOUVER, B.C. –September 4, 2012 – The extended weakness of the Greater Vancouver Property market has forced many motivated sellers to reduce prices significantly from their spring listing prices in order to sell their property. Sales volumes continued to languish at near record lows and daily sales volumes continue to decrease. Counteracting the low sales is the impact that market weakness has discouraged new sellers from listing their properties. This reduction in the pace of new listings has resulted in an overall decrease in the number of active listings compared to the number at the end of June 2012. Daily sales volumes continued to deteriorate first to 82 units per day in the first half of the month then to 71 units per day in the last half of the month. The lack of buyers has resulted in sellers taking significant discounts in order to complete their sale transaction and the majority of sales are now at prices below their July 2011 property tax assessed values.

GVREB reports that residential property sales of detached, attached and apartment properties reached 1,649 in August 2012. This total represents a 31 per cent decrease compared to the 2,378 sales in August 2011. August 2012 had the lowest average sales per market day for any August in the past 12 years at 76 sales per day compared to 78 sales per day in 2008, which was the most recent low.

August 2012 saw an increase in the sale of ultra-luxury properties as the summer travel season brought more foreign buyers than the previous few months. There were 3 sales in Greater Vancouver over $10 million during August 2012 and a large increase in properties over $5 million compared to the most recent months. The fact that these sales occurred in a month with very slow sales had a disproportionate effect of increasing the average price for the month with over $50,000 of the increase in the average selling price of detached properties coming from the 3 largest sales. The large increase in the average selling price compared to July 2012 should not be interpreted as a sign that the market is strengthening. Experienced local real estate professionals have noted that it is more important to focus on the high inventory levels and low sales volumes and the resulting inflated Months of Inventory (MOI) ratios than the average price which can be disproportionately affected by a small number of sales of very high value properties.

New listings for detached, attached and apartment properties in Greater Vancouver totalled 3,988 in August 2012. This is slightly below the average listing rate for the past 12 years however the sales to new listing ratio of 41.8% was the second lowest of the past 12 years. Continued market weakness has resulted in a slowdown in new listings. However, experienced market players have noted that “sellers waiting for better selling conditions are not expected to see the current price levels for the foreseeable future and waiting to list their property should not be a strategy to obtain a higher selling price. Sellers must reduce their price expectations if they wish to complete their sale before the end of 2012.”

Active listings at the end of August 2012 were 17,652, down 3 per cent from July 2012. However, total MOI continued to increase for the sixth straight month and was 10.5 at the end of the month. MOI for detached increased to 12.5 months at August 2012 from 10.1 months at the end of July 2012. Attached and apartment inventory increased significantly to 9.3 months from 7.7 months. At these levels, there are significant downward pressures on selling prices and very few buyers are available for the number of active listings. MOI increased in nearly every sub-market during August 2012 from July 2012 with West Vancouver detached increasing from 12 to 21 months and Burnaby increasing to 15 from 11 months. Without a significant withdrawal of listings by current sellers in Greater Vancouver, these ratios are forecasted to deteriorate further during September.

The Residential Reference Price for all residential properties in Greater Vancouver over the last 12 months has increased only marginally to $614,000 in August 2012 from $612,600 in August 2011. We believe that in September, the annual price comparison will show the first annual decreases in this index since 2009.

Sales of detached properties in August slowed to 625 units, a decrease of 39 per cent from the 1,020 detached sales recorded in August 2011, and a 30 per cent decrease from the 893 units sold in August 2010. August 2012 was the second lowest sales volume of detached in the past 12 years. The reference price for detached properties increased 1.4 per cent from August 2011 to $945,000 but fell from $949,000 in the previous month.

Sales of apartment properties fell to the lowest level in 12 years at 727 units in August 2012, a 24 per cent decrease compared to the 955 sales in August 2011, and a decrease of 22 per cent compared to the 955 sales in August 2010. The reference price of an apartment property was equal to the level at the end of August 2011 at $372,000.

Attached property sales in August 2012 totalled 298, a 26 per cent decrease compared to the 403 sales in August 2011, and a 20 per cent decrease from the 374 attached properties sold in August 2010. The reference price of an attached unit decreased 0.5 per cent from August 2011 to $464,000.

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patriotz
Member

Half of Canadians live paycheque to paycheque

Since the ownership rate is now 70%, that necessarily includes a lot of homedebtors.

The survey by the Canadian Payroll Association found 47 per cent saying they would be in dire financial straits if their pay was delayed as little as a week…

Only 34 per cent of Canadians now believe that savings of between $500,000 and $1 million will be sufficient to support a comfortable retirement, while 38 per cent believe a nest egg of between $1 and $3 million will be required.

Although more Canadians say they are saving, they are not saving enough. Almost half said they are putting away five per cent or less of their pay, about half what financial planners recommend.

But you can finance your retirement by selling your house. Right boomers?

Patiently Waiting
Member
Patiently Waiting

@Anonymous: Excellent point. If PNE management was on the ball, they’d have the best streetfood carts from Downtown Vancouver. Its an exposition afterall, which should be about the latest, most interesting stuff. Lots of suburbanites and out-of-towners would get to experience these new additions to this city.

Instead, its the same greasy crap year after year.

Anonymous
Guest
Anonymous

Lots of comments on the high price of food at the PNE. To me that’s evidence that nobody bought any food because if they did, they’d be complaining about the bigger issue which is the extremely poor quality, not the price. PNE food is absolutely horrible!

Patiently Waiting
Member
Patiently Waiting

@Crikey: “But then again how many years did we used to be promised that the PNE was at the end of its life?”

Oh yes, reminds me of how back in the 90s they were actively trying to kill the PNE. By “they” I mean granola-crunchers who wanted to create a natural ecosystem in a working class neighbourhood, even if it mean destroying a cultural institution along with the jobs of many of those working class people.

Now I remember where that stupid duck pond came from.

LOL Why not turn all of Vancouver back to nature? We won’t miss our old destructive ways as we forage for twigs and bugs. 😛

Crikey
Guest
Crikey

@Patiently Waiting:
“Sadly, I think the PNE will be gone within a few years.”
I think you may be right…maybe. But then again how many years did we used to be promised that the PNE was at the end of its life? I used to be able to tell the time by that annual press release.
Your words have me thinking, though…the PNE is somewhat like a zombie fair…dead, but somehow still active.

What the PNE needs is a huge cash investment, and some keen designers — even a fraction on what was spent on the roof of BC Place, or the Olympics, or the Fast Ferries would do wonders to modernize and revitalize an event that outlives any of the aforementioned money pits by many decades.

midnite toker
Member
midnite toker

@Joe_blown_away: The pne has always been a rip off, but I’m extra broke this year!

Van
Guest
Van

Realtors being too lazy to send in the sales reports to the real estate board.

jesse
Member

@HAM Solo: OSFI tightening takes effect this month and next at most of the big banks. The >$1MM market gets no quarter from mortgage insurance.

I don’t know if we’ll see quite the same sales levels as 2008 but I’m not expecting a strong fall. My stake for sell/list is 28%.

Joe_blown_away
Guest
Joe_blown_away

Definitely a case in which it’s better to own than rent: “It took a sharp-eyed neighbour to notice east Vancouver pensioner and widow Matilda Tomassoli was still paying a monthly rental fee for her old dial phone, the phone that was in the house when she and her husband moved in more than 50 years ago. Tomassoli, who speaks very limited English, didn’t even realize what she was paying for. By the time her neighbour Darren Franco discovered the $4.95 monthly rental charge, no doubt that old green phone that hangs in the hall had been paid for many times over. Tomassoli and her husband paid $17,500 for the house in the 1960s. She says she isn’t sure what they paid for the phone over the years because her husband used to pay the bills but, at $4.95 a month,… Read more »

Patiently Waiting
Member
Patiently Waiting

@Crikey: Two things ruined the PNE for me. Ending the demolition derby and putting in that huge duck pond.

I’ll forgive them on the demolition derby because it can’t be brought back.

But that stupid pond is a waste of valuable real estate right in the middle of the fair. Nobody talks about it or cares about it, unless they have to walk around it to get somewhere more interesting. Whoever thought it up deserves a bomp on the head.

Sadly, I think the PNE will be gone within a few years. In 1986, there were about 1.3 million people in Metro Vancouver and 1.1 million visitors at the PNE. In 2012, there is about 2.3 million Metro Vancouverites and 775,000 PNE goers. Folks don’t want to pay all that money to see ducks.

HAM Solo
Guest
HAM Solo

A bear’s worries for the fall. I am starting to think we won’t get into a serious crash through the fall season. Probably the ship will continue to take on water but there actually are a lot of factors that might, incredibly, let “them” kick the can a few months further. 1. There is actually a heck of a lot of construction going on right now. Forget for a second that the new builds (both commercial towers and condos) are financed on vapour, will just add to overcapacity, and will be incredibly hard to sell/lease when completed. The construction will employ enough idiots that there may not be a collapse in the bid side through September/October. 2. Interest rates are pretty low, so that there may well still be a move-up bid from early ponzi participants. 3. Despite the gathering… Read more »

crashcow
Member

@crashcow: My mistake, we had 18720 on Friday. 19K here we come.

VHB
Member
VHB

@GNFINGR:

Here are the September data:

year	sell	list	sell/list
2001	2155	3155	68.3%
2002	2476	3447	71.8%
2003	3357	4082	82.2%
2004	2853	4946	57.7%
2005	3344	4590	72.9%
2006	2519	5115	49.2%
2007	2776	4770	58.2%
2008	1585	6142	25.8%
2009	3559	5746	61.9%
2010	2220	4731	46.9%
2011	2246	5680	39.5%
Mean	2645	4764	55.5%
median	2519	4770	60.1%
GNFINGR
Guest

What did 2008 stats look like? Specifically, total listings, sales, sl etc

ScubaSteve
Member
ScubaSteve

Holy crap. 88 sold listings on the first day???

Vancouver is fucked!!!!!!!!!!!

crashcow
Member

this is the first time in a while where we ended up with higher inventory after month-end expiries

VHB
Member
VHB

@VHB: whoops -that should say September 4th not August 30th. Sorry.

VHB
Member
VHB
Sep-2012	
Total days	19
Days elapsed so far	1
Weekends / holidays	3
Days missing	0
Days remaining	18
7 Calendar Day Moving Average: Sales	76
7 Calendar Day Moving Average: Listings	199
SALES	
Sales so far	88
Projection for rest of month (using 7day MA)	1364
Projected month end total	1452
NEW LISTINGS	
Listings so far	364
Projection for rest of month (using 7day MA)	3578
Projected month end total	3942
Sell-list so far	24.2%
Projected month-end sell-list	36.8%
MONTHS OF INVENTORY	
Inventory as of August 30, 2012	18102
Current MoI at this sales pace	12.47

I told y’all that new listings would jump up immediately after labour day…and that now makes FIFTEEN straight workdays of double-digit sales.

Romeo Jordan
Guest
Romeo Jordan

20K by Sept 30th – hope so, but more likely mid October, as we cruise towards 21000.

Hope your Saturday night activities are helping you build your cash stack.

McLovin
Guest
McLovin

Now that is a nice start to the “Fall selling season”.

Maybe this year it will be called the “Fall listing season”?

20K by Sept 30?

Romeo Jordan
Guest
Romeo Jordan

Thanks PaulB!

Here’s to (hoping for) a 400+ new listings day this month:-)

xyz
Guest
xyz

Wow creepy…

xyz
Guest
xyz

If you are waiting for PaulB to post his numbers… Here is my hypothesis.

He is too busy moving paper for all the new listings..

paulb
Member

New Listings 364
Price Changes 145
Sold Listings 88

TI:18102

http://www.paulboenisch.com

Vulture Fun
Guest
Vulture Fun

@Joe_blown_away: Hey, Joe. I totally agree that Japan should not pay for a clean up on our shores. It seems rather bizarre. What they should pay for is dumping highly radioactive cooling water and debris into the Pacific. Many fish are already highly radioactive. The lame-ass Canadian government refuses to test salmon and other fish for radioactivity. Whichever agency is contacted, it’s always someone else’s problem. Actually, the poisoning of the Pacific Ocean is everyone’s problem.