Steady low sales continue

Here’s a round up of last months housing market by the GVREB.

The GVREB posts a monthly market summary similar to the REBGV, but the spin is in the opposite direction.

Here’s what they say about themselves:

“GVREB is a not for profit real estate bulletin prepared by industry analysts and market participants. Comments, information and questions can be sent to the general e-mail box at gvreb1@gmail.com”

And here’s what they say about September 2012:

Steady and low sales volumes continue through September
FOR IMMEDIATE RELEASE ON VCI
VANCOUVER, B.C. –October 3, 2012 – Sales volumes in the Greater Vancouver real estate market flattened in September 2012 yet showed typical seasonal correlations compared to August 2012. September 2012 had the lowest monthly sales volumes for the month of September in more than 20 years as the impact of the new mortgage regulations were fully reflected in market activity. Sales volumes increased compared to August 2012 with daily sales volumes increasing to 77 sales per market day in the first half of the month and then to 84 sales per market day in the second half of the month. These volumes are at seasonally historical low levels and when combined with high inventory levels, active sellers are seeing few active buyers and must price their properties accordingly in order to complete their sale.

GVREB reports that residential property sales of detached, attached and apartment properties fell to 1,522 in September 2012, the lowest total for the month of September in more than 20 years. This total represents a 32 per cent decrease compared to the 2,246 sales in September 2011. Although September 2012 had the lowest monthly sales for more than two decades, it had 2 fewer market days than 2008. Adjusting for the number of sales days, September 2008 had lower sales volume than September 2012 as the number of daily sales per market day was 80 for September 2012 while September 2008 had 75.

September 2012 also brought a shift in property sales mix consistent with the changes in credit conditions. Properties typically purchased by first-time buyers have had sales volume decreases at a higher rate with apartments in all areas and homes in lower priced sub-markets slowing at a higher rate. This has had the impact of placing upward pressure on the average selling price of detached properties even while the Reference Price is decreasing. Discussions with industry experts have noted that buyers are currently financially defensive and are being cautious, making aggressive low-ball offers and waiting for sellers to reduce prices. Several properties sold for more than 20 per cent below asking prices during September 2012 while only 5 per cent sold for over the asking price. GVREB also notes that sales volumes of detached properties in historically middle-class sub-markets were the lowest in over 20 years with sales continuing to languish further in Richmond, North Vancouver and Burnaby. These 3 sub-markets had the lowest September sales volume for detached properties since the 1970’s. Low sales volumes combined with high inventory levels have increased the overall Months of Inventory (MOI) to 12. At MOI in excess of 10, there is typically a downward movement in property values.

New listings for detached, attached and apartment properties in Greater Vancouver totalled 5,199 in September 2012. This is slightly above the average listing rate for the past 12 years. In addition, the sales to new listing ratio of 29.3% was the second lowest of the past 12 years. Continued market weakness has also resulted in a higher rate of listing cancellations and thus, inventory levels have failed to exceed the highs previously noted in June 2012. Based on current sales volumes, sellers who continue to list their property without a price reduction are unlikely to complete their sale before next spring.

Active listings at the end of September 2012 were 18,350, an increase of 4 per cent from August 2012. MOI continued its increase for the seventh straight month reaching an average of 12.1 for all property types. MOI for detached increased to 13.7 months at September 2012 from 12.6 months at the end of August 2012. Attached and apartment inventory increased more significantly to 11.0 months from 9.3 months. In some sub-segments the limited number of buyers has increased MOI to even higher levels with Richmond detached properties only having only a single buyer for every 52 properties listed.

The Residential Reference Price for all residential properties in Greater Vancouver over the last 12 months decreased by 0.6 per cent to $605,000 in September 2012 from $611,000 in September 2011.

Sales of detached properties in September slowed to 602 units, a decrease of 37 per cent from the 957 detached sales recorded in September 2011, and a 30 per cent decrease from the 866 units sold in September 2010. September 2012 was the second lowest sales volume of detached in the past 12 years. The reference price for detached properties fell marginally to $938,000 compared to $939,500 in September 2011.

Sales of apartment properties fell to the lowest level for the month of September in the past 2 decades to 675 units in September 2012, a 27 per cent decrease compared to the 922 sales in September 2011, and a decrease of 30 per cent compared to the 971 sales in September 2010. The reference price of an apartment property decreased marginally to $368,700 from $371,100 in September 2011.

Attached property sales in September 2012 totalled 245, a 33 per cent decrease compared to the 367 sales in September 2011, and a 36 per cent decrease from the 383 attached properties sold in September 2011. The reference price of an attached unit decreased 2.7 per cent from September 2011 to $459,000.

94 Responses to “Steady low sales continue”

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    patriotz patriotz Says:
    1

    http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/why-gen-y-should-tough-it-out-in-the-rental-market/article4580877/

    Renting is the obvious alternative for someone who is unready for the financial blood-sucking that home ownership entails.

    Well-loved. Like or Dislike: Thumb up 43 Thumb down 1

    CanuckDownUnder Says:
    2

    Meanwhile the great Australian property crash continues to suffer delays. Prices here rose for the fourth consecutive month, up 1.4% in September (the largest monthly increase since 2010). Year to date prices are now up 0.8% while Sydney prices are up 3.4% since the start of the year.

    I can only assume the continual slashing of interest rates is drawing in the last of the fools as sales activity remains historically low. Housing credit data just released by the RBA shows annual mortgage growth was the lowest it’s been in the 35 years of the series.

    We just had another 25bps cut this afternoon, perhaps ZIRP will propel the market to a new high before the implosion finally occurs.

    Well-loved. Like or Dislike: Thumb up 24 Thumb down 0

    patriotz patriotz Says:
    3

    Empty property after Spain’s bubble burst

    Ruthless building contractors, banks offering attractive loans and locals blinded by a property boom. Thousands of properties stand empty since Spain’s property bubble burst, and it left a bitter taste in the Murcia region.

    In Spain mortgage debt can’t be discharged even in bankruptcy. Didn’t prevent a bust did it?

    Well-loved. Like or Dislike: Thumb up 33 Thumb down 1

    Keeping An Eye On The Pimps Says:
    4

    “September 2012 had the lowest monthly sales volumes for the month of September in more than 20 years as the impact of the new mortgage regulations were fully reflected in market activity.”

    This is quite a head scratcher for those with less refined minds than Tsuir, Muir and, and Rennie.

    With demand from all over the world from rich billionaires, and supply constrains, you would think it were true that local incomes don’t matter.

    Angela, Please! There must be something you can do.

    Well-loved. Like or Dislike: Thumb up 29 Thumb down 0

    Keeping An Eye On The Pimps Says:
    5

    “But for all the differences, there are many similarities and vulnerabilities. Home equity lending (HELOC) has soared and, just as happened in the U.S., Canadian government officials and leading Canadian banks are quick to ensure that there is no bubble. Also worrisome is the size and make-up of the CMHC; it is now larger (on a relative basis) than Fannie Mae at the U.S. peak, and five of the 10 governors have ties to the housing industry.”

    Read more: http://www.sfgate.com/business/investopedia/article/What-About-Canada-s-Housing-Bubble-3910240.php#ixzz289HQIVqh

    Well-loved. Like or Dislike: Thumb up 28 Thumb down 0

    FlipFlop Says:
    6

    A smart realtor would be printing that GVREB report out and showing it to their clients, in an attempt to get them to propperly price their house and help with those back payments on the bimmer.

    Well-loved. Like or Dislike: Thumb up 30 Thumb down 0

    patriotz patriotz Says:
    7

    @Keeping An Eye On The Pimps:
    ” just as happened in the U.S., Canadian government officials and leading Canadian banks are were quick to ensure that there is no would be a bubble.”

    Which is what happened. Or substitute “assure” for “ensure” in the original, which I suppose is what the reporter was trying to say.

    Like or Dislike: Thumb up 7 Thumb down 2

    Bears Are Always Wrong Says:
    8

    Hidden due to low comment rating. Click here to see.

    Poorly-rated. Like or Dislike: Thumb up 9 Thumb down 21

    Groundhog Says:
    9

    @Bears Are Always Wrong

    Not until next spring. Does the name “Bears are always wrong” imply that real estate always continuously forever rises?

    Well-loved. Like or Dislike: Thumb up 26 Thumb down 0

    McLovin Says:
    10

    Any predictions on when we’ll hit 20k inventory? – NEXT SPRING

    Any predications on when we’ll hit -20% on prices? – NEXT SPRING

    Well-loved. Like or Dislike: Thumb up 38 Thumb down 4

    While all efforts are made to ensure the accuracy of the data, typographical errors can occur. Please note the small error in the text of the release.

    We note that Richmond had 52 sales in September 2012. This resulted in one buyer for every 22 properties for sale. Please note that the reference to one buyer for every 52 properties was an inversion of the MOI calculation and was an error. However, this is still a low number of buyers.

    Until next month.

    GVREB

    Well-loved. Like or Dislike: Thumb up 28 Thumb down 0

    Anonymous Says:
    12

    Hidden due to low comment rating. Click here to see.

    Poorly-rated. Like or Dislike: Thumb up 2 Thumb down 18

    Anonymous Says:
    13

    http://www.vreb.org/mls_statistics/current_statistics.html

    The average price is down 5.3% from last September.
    The median price is down 3.1% from last September.

    This is just the beginning.

    The average price for single family homes sold in Greater Victoria last month was $589,361, down from September 2011’s average of $622,393. The median price is down by $16,500 to $517,500 over September 2011

    Well-loved. Like or Dislike: Thumb up 38 Thumb down 1

    Anonymous Says:
    14

    Hidden due to low comment rating. Click here to see.

    Poorly-rated. Like or Dislike: Thumb up 2 Thumb down 20

    Is there a way to find to look up the sold price of properties?

    Like or Dislike: Thumb up 5 Thumb down 1

    Hugh G Rection Says:
    16

    about halfway into this press release

    “September 2012 also brought a shift in property sales mix consistent with the changes in credit conditions. Properties typically purchased by first-time buyers have had sales volume decreases at a higher rate with apartments in all areas and homes in lower priced sub-markets slowing at a higher rate.”

    then a little further down

    “Sales of detached properties in September slowed to 602 units, a decrease of 37 per cent from the 957 detached sales recorded in September 2011″

    “Sales of apartment properties“fell to the lowest level for the month of September in the past 2 decades to 675 units in September 2012, a 27 per cent decrease compared to the 922 sales in September 2011
    Attached property sales in September 2012 totalled 245, a 33 per cent decrease compared to the 367 sales in September 2011″

    something isn’t adding up here…….

    Like or Dislike: Thumb up 5 Thumb down 4

    asalvari1 Says:
    17

    @Hugh G Rection:
    something isn’t adding up here…….

    Maybe we need to compare the percents with the previous month. I don’t have the new data, but I would compare the percent decreases with august.

    Like or Dislike: Thumb up 0 Thumb down 0

    It is interesting to see how the predictable long-term effects of the bubble are playing out in the US.

    http://www.washingtonpost.com/business/economy/the-mattress-trap/2012/10/01/2bd72c96-0425-11e2-9b24-ff730c7f6312_story.html?hpid=z4

    This may be another sign of the US being at the bottom, but these same attitudes are still in place in Japan today.

    Like or Dislike: Thumb up 8 Thumb down 0

    jack b nimble Says:
    19

    @Bears Are Always Wrong:
    I’m betting not only will we hit 20,000 listings in the spring, but it’ll be much higher. The table has been set :-)

    Hot debate. What do you think? Thumb up 13 Thumb down 4

    McLovin Says:
    20

    Good news out of the US:

    The housing market has begun to rebound this year more than five years after the bubble burst.

    Even with the gains, the housing market has a long way back. CoreLogic said its measure of prices is 26.7 per cent below a nationwide peak in April, 2006.

    The bad news for us, Its been 5 years since their bubble burst and its been about 5 months since ours did. They are still down 26%.

    Its a long long way down Vancouver.

    Hot debate. What do you think? Thumb up 16 Thumb down 2

    taylor192 Says:
    21

    @Hugh G Erection

    What’s not adding up is that they consider some of the detached homes to be marketed to FTBs, and that sales volumes at the bottom end of detached homes are way off.

    Like or Dislike: Thumb up 1 Thumb down 0

    Bull! Bull! Bull! Says:
    22

    Hidden due to low comment rating. Click here to see.

    Poorly-rated. Like or Dislike: Thumb up 2 Thumb down 24

    oneangryslav2 Says:
    23

    @Bull! Bull! Bull!: It’s unfortunate that you didn’t spend some of that virtual money you’ve made in Vancouver real estate to purchase some spelling lessons. Or at least a web browser with spellcheck.

    Hot debate. What do you think? Thumb up 23 Thumb down 4

    Interesting rumours from Garth http://www.greaterfool.ca/2012/10/01/too-big-to-bail/

    If they decide to “ban on anyone losing their home for non-payment of a mortgage”, I’ll go and buy a most expensive house I can get a loan for. Why do I have to subsidize somebody living in a house they can’t afford?

    Well-loved. Like or Dislike: Thumb up 24 Thumb down 0

    Anonymous Says:
    25

    @Aleksey: Those ideas weren’t rumours. Those were questions that were asked of Garth by a BC business magazine writer. The writer was posing the idea of government bailouts if RE prices fell too far. Big difference.

    Hot debate. What do you think? Thumb up 18 Thumb down 0

    Anonymous Says:
    26

    @Aleksey: “If they decide to “ban on anyone losing their home for non-payment of a mortgage”, I’ll go and buy a most expensive house I can get a loan for. Why do I have to subsidize somebody living in a house they can’t afford?”

    Why not just get those underwater folks to turn their single family dwellings into homes for 7 other families – the way everybody else in Vancouver does.

    Welcome to Vancouver; the newest Soviet state.

    Hot debate. What do you think? Thumb up 10 Thumb down 1

    And here it starts…

    And we were told our financial system was much stronger than in the US:

    Broker gets 3 years for fraud

    The Fredericton Provincial Court has now sentenced a New Brunswick mortgage broker to three years in prison for mortgage fraud.
    “A five-month RCMP investigation into the operations of William Priest-Phillips of Nackawic, and his company Priest Phillips Management, which operated under the name DLC Priest Financial, has uncovered at least eight mortgage applications with Scotiabank containing falsified documents,” said Cst. Andrea Grasman of the RCMP’s Commercial Crime Section. DLC severed ties with the company on April 19, 2012, soon after it learned of the allegations against Priest-Phillips.
    “Dominion Lending Centres Inc and all of its independently owned and operated franchises across Canada wish to state that William Priest has no association direct or indirect with Dominion Lending Centres,” reads part of a DLC statement provided MortgageBrokerNews.ca. “Dominion Lending Centres severed all ties with William Priest and company once we were notified of the allegations against him and the impending investigations against him and his companies. Dominion Lending Centres officially terminated William Priest on April 19, 2012.”
    Both Priest-Phillips and his company were charged with one count each of fraud over $5,000 and one count of uttering forged documents for submitting mortgage applications containing falsified documents. Phillips pleaded guilty to the charges.
    The charges against Priest-Phillips’s company were dropped, but the 49-year-old mortgage broker is currently in jail serving his sentence, Grasman told MonrtgageBrokerNews.ca.
    The RCMP was alerted of Priest-Phillips’s activities by the New Brunswick Securities Commission, said the officer, confirming the commission had been investigating the broker for an alleged Ponzi scheme bilking families and close friends out of nearly $600,000, in mostly retirement savings.
    “The securities commission basically tipped us on his activities,” said Grasman. “We found that from January to November of 2011, Priest-Phillips had submitted eight mortgage applications with falsified information to Scotiabank.”
    The case may have negative consequences for the industry as a whole, as it grapples with any negative media attention in and outside the Atlantic provinces.
    “Mortgage fraud negatively affects the real estate market,” said Insp. Lise Roussell of the NB RCMP’s Commercial Crime Section. “This is a serious crime as it attacks our economic integrity by placing the interest of both consumers and financial institutions at risk.”
    Most broker networks, including DLC, have a zero-tolerance policy.
    “DLC actively cooperates and supports the efforts of our regulators, policymakers and government enforcement agencies, will act swiftly to terminate all offending parties and supports maximum penaltie,” reads the official statement provide MortgageBrokerNews.ca Monday.

    I have the feeling that these stories are just starting to emerge. My theory has always been: “if it took fraud on a large scale in the US to get to 69% rate of ownership, it probably took about the same amount of malfeasance in Canada to get to 70%”…

    Well-loved. Like or Dislike: Thumb up 26 Thumb down 1

    Anonymous Says:
    28

    A bit off topic but it occurred to me last night that all those Realturds driving around in cars are maybe smarter than we think. After all, that driving experience will give them a leg up in a new exciting career in fast-food delivery; a profession for which they’re qualified (and there are tips).

    Hot debate. What do you think? Thumb up 23 Thumb down 7

    @Makaya: As warren buffett would say, there’s never one cockroach. And you will know who’s swimming naked after the tide is out.

    Hot debate. What do you think? Thumb up 15 Thumb down 0

    Many Franks Says:
    30

    More MSM fun at The Globe & Mail, complete with Eugen Klein somehow keeping a straight face while arguing that a decrease in prices represents a worsening of affordability.

    Well-loved. Like or Dislike: Thumb up 24 Thumb down 0

    Patiently Waiting Says:
    31

    @Anonymous: The writer claims to have heard business and government leaders discuss those ideas.

    None of it will see the light of day.

    Joe and Jane Homoaner, you are on your own.

    Like or Dislike: Thumb up 8 Thumb down 0

    @Anonymous:

    You are right. At the same time I heard exactly the same thought from somebody on CBC couple of weeks ago. It was a round table about RE on the National.

    Like or Dislike: Thumb up 2 Thumb down 1

    @Anonymous:

    Welcome to Vancouver; the newest Soviet state.

    Thank you! I escaped from one of those some time ago and I don’t want to go back.

    Actually, I’ve changed my mind on the topic and strongly agree with one of the comments on the greaterfool.ca:

    At the risk of sounding like one of *those* people, I would seriously look at leaving Canada permanently if the government decided to have ridiculous bailouts for those who go underwater after the government allowed 0 down 40 year mortgages and record low interest rates for years at a time.

    Better my tax dollars (significantly less of them I might add) go to Bermuda or Grand Cayman, places I have lived in the past, than to pay for a bunch of speccers and flippers. Heck even Australia. They need trainded accountants everywhere, at least for now…

    Let’s hope our government doesn’t go this route, but as Garth says, it’s very likely if things get bad enough. The alternative isn’t pretty either.

    Well-loved. Like or Dislike: Thumb up 24 Thumb down 1

    Not much of a name... Says:
    34

    http://www.rebgv.org/news-statistics/conditions-continue-favour-buyers-greater-vancouver-housing-market

    It doesn’t look good….

    Overall – benchmark down 0.8% YOY – Down 0.6% MOM
    Detached – down 0.5% YOY – Down 0.7% MOM
    Apt – down 0.7% YOY – Down 0.4% MOM
    Attached – Down 2.7% YOY – Down 0.8% MOM

    and so it starts.

    Well-loved. Like or Dislike: Thumb up 43 Thumb down 0

    gordholio Says:
    35

    McLovin: I’m personally cautious in feeling optimistic about any US housing “recovery.” There’s a huge conflict in what the figures actually are, but there’s undoubtedly a massive shadow inventory of homes across the nation. As these are gradually placed back on the market, I’m thinking it’ll push back any widespread recovery for quite some time.

    Plus, there are so many people down there who were burned badly by the crisis. I think it’ll be a long time before any of these people A) Have enough money to get back in, and B) Have enough confidence in home ownership to even *want* to get back in. Maybe what we *seem* to be seeing right now in places like Phoenix is a speculative mania bump?

    Hot debate. What do you think? Thumb up 13 Thumb down 1

    From Official REBGV stats:

    MOI	2012	2011	2008
    Oct		6.6	14.1
    Sep	12.1	7.2	12.5
    Aug	10.7	6.5	11.4
    Jul	8.6	5.9	8.8
    Jun	7.8	4.6	7.5
    May	6.3	4.3	5.4
    Apr	5.9	4.4	4.7
    Mar	5.3	3.2	4.8
    Feb	5.5	3.9	4.3
    Jan	8.0	5.7	5.5

    Well-loved. Like or Dislike: Thumb up 25 Thumb down 0

    patriotz patriotz Says:
    37

    @gordholio:
    RE prices in the US are now back to normal. For sales and new builds to return to historic levels, prices have to stay that way. That’s the true recovery – not a return to inflated prices.

    Of course almost everyone in the US talks about a “recovery” as a return to inflated prices. That’s like saying that a person who has gotten over an illness needs to get sick again to “recover”.

    Well-loved. Like or Dislike: Thumb up 28 Thumb down 0

    market stats Says:
    38

    Some cl for sale ads now more prominently discussing vendor financing. This one is kind of interesting, to sidestep heloc rules is it actually legally for vendor to finance or kickback some money to the buyer to make the downpayment?

    Owner will help with down payment – $295000 / 2br – 970ft² – (Premier St/Cap University) pic

    Like or Dislike: Thumb up 5 Thumb down 0

    Bull! Bull! Bull! Says:
    39

    Hidden due to low comment rating. Click here to see.

    Poorly-rated. Like or Dislike: Thumb up 1 Thumb down 21

    patriotz patriotz Says:
    40

    @market stats:
    Any vendor financing or rebate must be disclosed to the lender so they can evaluate whether the nominal market price represents the true market price. To conceal it is mortgage fraud.

    Like or Dislike: Thumb up 9 Thumb down 0

    @VMD:
    hmm, the “pre” tag worked well in preview mode but after posting still get some shifting. I suppose we can’t leave any cell blank.

    Will be interesting to see how MOI progresses in October.
    Traditionally October has more sales than September while inventory declines (hence, MOI declines), except for 2008 where sales continued its decline.
    click on my name for pdf collection.

    Like or Dislike: Thumb up 8 Thumb down 0

    Anonymous Says:
    42

    @patriotz: “Of course almost everyone in the US talks about a “recovery” as a return to inflated prices. That’s like saying that a person who has gotten over an illness needs to get sick again to “recover”.”

    I am still waiting for Nortel to return to its ‘normal’ valuation it had during the tech bubble. Bull, Bull, Bull do you know when this swill happen?

    Well-loved. Like or Dislike: Thumb up 26 Thumb down 0

    Not much of a name... Says:
    43

    “There’s been a clear reduction in buyer demand in the three months since the federal government eliminated the availability of a 30-year amortization on government-insured mortgages,” Eugen Klein, REBGV president said. “This makes homes less affordable for the people of the region.”

    This actually got me thinking about how pathetic the market is/was in Vancouver. These statements show just how tenuous the market is if a reduction back to 25 yr amortizations could cause such an enormous drop in sales. How many people then were barely qualifying (that had no business buying) for mortgages simply because of longer amortizations? Sad.

    Or…the REBGV is full of crap and it was just time that the market turned.

    Well-loved. Like or Dislike: Thumb up 20 Thumb down 0

    @gordholio:

    Another factor bearing on long term US prices is interest rates. As the rest of the economy picks up steam, borrowing costs will increase. If the rest of the economy doesn’t pick up steam, few people will want to buy anyway.

    It’s hard to imagine an upward trajectory for quite some time.

    Like or Dislike: Thumb up 4 Thumb down 0

    Told-you-so Says:
    45

    @ anonymous @ 12:06,

    ” am still waiting for Nortel to return to its ‘normal’ valuation it had during the tech bubble. Bull, Bull, Bull do you know when this swill happen?”

    I realise the “swill” was probably a typo, but if not, well done!

    Hot debate. What do you think? Thumb up 10 Thumb down 1

    @Not much of a name…: I think REBGV is just starting the blame game. After all, if it were not for government “intervention” (by interventing less!), how could the BPOE RE prices drop?

    Expect more finger pointing in the months ahead.

    Like or Dislike: Thumb up 9 Thumb down 0

    Not much of a name... Says:
    47

    @gokou3: I whole heartedly agree. Everyone needs to point fingers at others.

    Like or Dislike: Thumb up 4 Thumb down 0

    ArthurFonzarelli Says:
    48

    Question for the data junkies out there: Prices tend to be determined by, or at least are highly dependent on MOI. We always have this cyclical annual MOI (lowest in Spring; highest in Fall). If that’s the case then what are the chances that we will actually have a continued buyer’s market this winter/spring once properties enter the seasonal de-list season later this month or next? Is it possible that we could have price declines in, say, March and April if we are only at 4-6 MOI?

    Like or Dislike: Thumb up 1 Thumb down 0

    @patriotz:

    US prices are not going up for quite a while. What we are seeing now is a bit of a dead cat bounce.

    Yes, prices are up about 10% in some markets, but they were down 50% or more. 10% up after 50% down isn’t as great as it sounds, it’s only 5% from the pre 50% price. That 5% doesn’t help those that are massively underwater, which is I believe around 50% of homeowners.

    US prices will stay flat for a large number of reasons.
    – Shadow inventory
    – Banks are still working through foreclosures
    – People are still foreclosing. Yes the rate is down but still very high.
    – Construction is picking up, not because of demand, but because of cheap labor and materials.
    – Boomers will be downsizing over the course of the next 10 years.

    Access to mortgages is really tough even for those with the best credit. I have a friend there who has a great job and does very well and the only way they can upgrade to a larger house is to sell the one they are in now first. There is a lot of friction in the system compared to before, but it’s needed to get the economy into a sustainable state.

    Hot debate. What do you think? Thumb up 16 Thumb down 1

    SFH Stats Sept 2012: (ranked by worst sales decline)

    Richmond:
    Sales:-50% YoY, -10% MoM
    Ratio: 22% vs 32%
    HPI: -4.2% YoY, -1.3% MoM
    Median: -9.8% YoY, -1.4% MoM

    Burnaby:
    Sales -49% YoY, -10% MoM
    Ratio: 18% vs 35%
    HPI: +4.2% YoY, -0% MoM
    Median: -13% YoY, -6.3% MoM

    Van East:
    Sales:-48% YoY, -6% MoM
    Ratio: 30% vs 51%
    HPI: +3.2% YoY, -1.1% MoM
    Median: -2.5% YoY, -0.6% MoM

    Coquitlam:
    Sales:-37% YoY, +16% MoM
    Ratio: 30% vs 51%
    HPI: +3.6% YoY, -0.2% MoM
    Median: +0.4% YoY, -3.7% MoM

    Van West:
    Sales:-17% YoY, +15% MoM
    Ratio: 27% vs 27%
    HPI: -6.5% YoY, -1.3% MoM
    Median: +1% YoY, +0% MoM

    Well-loved. Like or Dislike: Thumb up 37 Thumb down 0

    @ArthurFonzarelli:

    “Question for the data junkies out there: Prices tend to be determined by, or at least are highly dependent on MOI. We always have this cyclical annual MOI (lowest in Spring; highest in Fall). If that’s the case then what are the chances that we will actually have a continued buyer’s market this winter/spring once properties enter the seasonal de-list season later this month or next? Is it possible that we could have price declines in, say, March and April if we are only at 4-6 MOI?”

    It could actually make prices slide quicker. The reason is this; population size (in this case sales volume) can act like a buffer as it normalizes the price variability in a population. The smaller the population, the larger effect a price deviation from the mean can effect the rolling mean. MOI is base on sales versus inventory, it has nothing to do with the actual volume, just the ratio of the two. So you could have the same MOI from previous years, but the volume could be 30% what it traditionally is.

    It’s the same on the stock market, low volume days see higher volatility.

    Like or Dislike: Thumb up 8 Thumb down 1

    I’m sure I got that downvote for saying the word “mean” when “median” is better, but I used typically use trimmed means but left the trimmed out for simplicities sake. My bad.

    Like or Dislike: Thumb up 2 Thumb down 0

    YVR2ZRH Says:
    53

    @ArthurFonzarelli:

    A couple of things I want to respond to so here’s the first one. On the MOI movements next year. I do have some modelling which is based on the historical seasonal data. Using this data and without any shocks to the system, here’s what we are in for.

    1.) MOI will fall below 10 at December but not by much. We should end the year with about 13,700 units prior to year-end expirations. With a December sales volume of about 1,350 or so, we will come in approx 10, compared to 12 right now.

    2.) Year-end expirations are typically 20% so we’ll kick off Jan 1 with over 10,000 units (like 2009). As we get to the end of March, we will have increased inventory approx 15% over last year. We will have a sales decrease and thus we will end up with higher MOI. I would say that March 2013 will have approx 17,600 units listed at month end and have sales of 2,500 – giving MOI of 7. That’s as low as we will see. A terrible March.

    3.) Inventory will peak at the end of June again – 17% higher than March and will be over 20,000 for the first time. With languishing sales and subbornly high inventory, we will either see large price reductions, listing withdrawals or continued very high MOI. I would say without any change in the market, we will hit 13 MOI next year.

    The story is out, the blame game is on. I am actually somewhat sickened by the political statement that was made. I would have expected Mr. Klein to make a more accurate statement.

    I would like to re-word his statement to make it more accurate.

    “There has been a clear reduction in buyer demand in the three months since the federal government eliminated the availability of the 30-year amortization on government-insured mortgages. The reduction in credit has reduced the buyers ability to borrow and thus has reduced the amount of property they can purchase”.

    Affordability should be a concept of consumption cost v. incomes. As interest rates have not moved, affordability is not affected. What is affected is the ability of someone to access credit to buy the asset.

    —Anyhow – – – At least we can see the continued correlation of the MOI to price changes. Given this correlation, we should have 3-4 more months of decreases before we see stable through June and then we continue on again . . . 1-1.5% per month . . . Only 3 years until this is all played out.

    Well-loved. Like or Dislike: Thumb up 43 Thumb down 0

    Vancouver home sales in September plunge 32.5 per cent from year-ago mark

    Read more: http://www.vancouversun.com/business/Vancouver+home+sales+September+plunge+cent+from+year+mark/7332924/story.html#ixzz28B4h7eKl

    Hot debate. What do you think? Thumb up 12 Thumb down 0

    ReadyToPop Says:
    55

    But there is no mistaking the steep decline in sales activity which in September was 41.6% below the 10-year average.

    Vancouver showing ‘clear reduction in buyer demand’, real estate board says

    Like or Dislike: Thumb up 9 Thumb down 0

    ArthurFonzarelli Says:
    56

    @JR
    Thanks for the response. Not sure it makes sense to me though. If sales volumes are low, as you state, but total inventory is still on the low side in spring, then MOI will still be low. What you are describing sounds like the law of averages, which results in individual outliers having a greater impact on the mean.

    I am basically concerned that we will enter a Spring season with reduced sales – say 2000 or so for March/April instead of >3000 – but we’ll only be at 14-15K in inventory, so even with a horribly weak sales environment we’re still only around 6-7 MOI which suggests flat prices. So does Vancouver’s seasonal listing/de-listing cycle mean that we’ll never have price decreases outside of the high inventory period of late summer/fall?

    Like or Dislike: Thumb up 1 Thumb down 1

    Any predictions on when we’ll hit 20k inventory? – Mid-March 2013

    Any predictions on when we’ll hit -20% on prices? – The end of 2013

    Hot debate. What do you think? Thumb up 13 Thumb down 2

    Vote Down The Facts Says:
    58

    @b5baxter:

    -20% by what measure? Average/median? SFH only or all properties? Vancouver alone, BC, GVREB, FVREB?

    I’d like to play but would be good to know what the rules are :)

    Hot debate. What do you think? Thumb up 14 Thumb down 0

    @YVR2ZRH:

    I think blaming this on the mortgage changes is a total cop out. The difference between a 30 and 25 year is minor, and if you can’t overcome the $200 more a month maybe you shouldn’t own a home in the first place. I’m sure it has affected things to a small degree, but the fact of the matter is there are no more buyers left at the current price points. In the US the crash started because there were no more buyers left and too much inventory, not lack of credit availability.

    Well-loved. Like or Dislike: Thumb up 25 Thumb down 1

    @Vote Down The Facts:
    Dear VDTF, you are cordially invited to the 2013 VCI Price Prediction Contest.
    The result of the 2012 VCI Price Prediction Contest will be unveiled in precisely three months.

    Registration for the 2013 contest will open in early Jaunary and close in early February.
    The 2013 contest will likely include predictions on Average, HPI, and Median prices. (open for discussion). Scores will be compiled on an biannual basis. Prize (beside bragging rights) to be determined.

    Hot debate. What do you think? Thumb up 15 Thumb down 2

    YVR2ZRH Says:
    61

    @b5baxter:

    I think I’m there with you. 20K by March 2013(not PaulB but REBGV without land/multi). By end of 2013, 20% from the May 2012 peak. Very very possible – that’s barely 1% per month (or as Tsur S. calls it . . Flat).

    Well-loved. Like or Dislike: Thumb up 22 Thumb down 1

    @YVR2ZRH: If 10% annually is flat I would hate to see his definition of steep.

    Hot debate. What do you think? Thumb up 31 Thumb down 34

    Hidden due to low comment rating. Click here to see.

    Poorly-rated. Like or Dislike: Thumb up 21 Thumb down 34

    @ArthurFonzarelli: It’s not just math it’s emotional, which is a bit harder to describe and harder to predict. Let’s try this. Let’s say you are going to buy a condo in North Van and you know what building you want. So you sit down with your realtor and look and the recent sales. On a high volume year imagine there are 10 sales in the last few months all around $400k, but one is $350k. What price are you going to offer? Now imagine a bad year like we are seeing now, and there are two sales, one at $400k and one at $350k? What are you going to offer now? The MOI is the same.

    If people see a sliding market they are going to offer under asking. Garth had a post about this about a month ago. Good realtors in reality don’t care about the price, they make money on sales and only care about closing the deal quickly to move on to the next one.

    Hot debate. What do you think? Thumb up 27 Thumb down 32

    @ReadyToPop: @N: No bullish comments in these two articles yet? Come on bulls, did your developer bosses forget to pay you?

    Well-loved. Like or Dislike: Thumb up 36 Thumb down 3

    Yaletown has like 4 months of inventory?

    Hot debate. What do you think? Thumb up 45 Thumb down 26

    Crash Cow 2013 Says:
    67

    Hidden due to low comment rating. Click here to see.

    Poorly-rated. Like or Dislike: Thumb up 29 Thumb down 42

    A couple sample Richmond price reductions today:
    9580 Woodwards Pl, Richmond
    Initial asking: $1,518,000
    Aug 4 drops to: $1,384,800 (-9%) (same as assessed value)
    Oct 2 drops to: $1,200,000 (-21%)(ie 13.4% below assessed)

    8480 Delaware Rd, Richmond
    Initial asking: $1,068,000 (near ssessed at $1,072,000)
    Oct 2 drops to: $999,900 (6.7% below assessed)

    5660 Gibbons Dr, Richmond
    Initial asking: $1,250,000 (near ssessed at $1,253,900)
    Oct 2 drops to: $1,150,000 (8.3% below assessed)

    sellers are taking the plunge into the below-assessed realm.

    Well-loved. Like or Dislike: Thumb up 81 Thumb down 19

    jojomalone Says:
    69

    Well-loved. Like or Dislike: Thumb up 49 Thumb down 1

    jojomalone Says:
    70

    Hot debate. What do you think? Thumb up 31 Thumb down 33

    looks like some irritated bulls (Dog?) has been busy spam-downvoting comments either via multiple devices or IP masking. Sooner or later admin might need to restrict voting/commenting to members-only..

    Well-loved. Like or Dislike: Thumb up 65 Thumb down 10

    Hot debate. What do you think? Thumb up 19 Thumb down 6

    Anonymous Says:
    73

    @JR: “Good realtors in reality don’t care about the price, they make money on sales and only care about closing the deal quickly to move on to the next one”

    Except that when prices are rising, it takes a lot less work to make a lot more money. Maybe long term Realturds know that it takes a lot more work to earn a lot less money when times are tough but the average ‘turd’ doesn’t get it – they think they’re still on the gravy train.

    Like or Dislike: Thumb up 7 Thumb down 1

    Hidden due to low comment rating. Click here to see.

    Poorly-rated. Like or Dislike: Thumb up 34 Thumb down 43

    Hidden due to low comment rating. Click here to see.

    Poorly-rated. Like or Dislike: Thumb up 6 Thumb down 26

    News stories all around of declining sales.

    On CTV realtor Paul Eviston saying if you don’t buy now you could miss the opportunity and have the prices go up again.

    After a decade of appreciation and recent credit tightening by CMHC and OFSI, I don’t think so.

    Well-loved. Like or Dislike: Thumb up 49 Thumb down 1

    New Listings 277
    Price Changes 145
    Sold Listings 135
    TI:18701

    http://www.paulboenisch.com

    Well-loved. Like or Dislike: Thumb up 138 Thumb down 2

    “On CTV realtor Paul Eviston saying if you don’t buy now you could miss the opportunity and have the prices go up again.”
    ————————————
    I’m sure Mr Eviston is a nice guy, but with great respect, I’ll pass and take my chances on possibly missing the “opportunity and have the prices go up again”

    Well-loved. Like or Dislike: Thumb up 28 Thumb down 0

    Yikes. Big sales day. 3,000 sales this month?
    Pent up demand?

    Hot debate. What do you think? Thumb up 27 Thumb down 34

    Best place on meth Says:
    80

    @Dog:

    I knew the cheerleaders would piss their pants if they saw a day over 100.

    Continue whizzing.

    Well-loved. Like or Dislike: Thumb up 58 Thumb down 13

    Best place on meth Says:
    81

    @s:

    Paul Eviston must be hurting for commissions to be spewing such crap.

    His website shows he has 300 listings. If true then he’s very busy showing properties and has a lot of assistants to pay.

    Hot debate. What do you think? Thumb up 19 Thumb down 7

    Romeo Jordan Says:
    82

    SOMEONE SHOULD TELL THE CHIMP THAT ITS GAME OVER. THE FAT MONKEY IS SINGING, GO GRAB A BANANA
    Affordable Housing in Vancouver
    By Rob on Tuesday, October 2nd, 2012 | No Comments
    Michael Geller, Frances Bula and Lisa Boldt were on with Bill Goode this morning discussing housing affordability in Vancouver. The thrust of the conversation seemed to be that an increase in housing supply would translate into more affordable housing.
    The scent of redistribution was also in the air – variations on the concept of directing the market to provide affordable housing for a minority of citizens by increasing costs for other citizens.
    Neither of these solutions will lead to more affordability. Just as you can’t redistribute your way to increased incomes you can’t redistribute your way to improved affordability. Redistribution is simply a way for government to pick winners and losers, or more precisely, a way for politicians to play favourites. Redistribution doesn’t address costs. It just changes who pays those costs.
    Increasing supply makes more sense in theory. The law of supply and demand would indicate that more supply will tend to reduce prices. Local experience speaks against this, however. Over the past decade we’ve increased supply significantly. We’ve also increased density. At times demand has outstripped supply for extended periods, leading to sell/list ratios in excess of 100% and MOIs (months of inventory – a measure of demand) hovering between 1 and 3. Today we have sustained sell/lists is the 30% range and MOIs of 15+. Since the beginning of 2012 we’ve faced low sales demand, but affordable housing is as far away as ever.
    Why is that? It’s because supply and demand does not work in the real estate market as effectively as it does in other markets. Real estate prices are sticky on the way down because of mortgage obligations, because sellers are seldom forced to sell, a d because housing is not a simple widget style commodity.
    Rather than dismiss the panel out of hand (and let’s face it, dismissing someone ideas in the isolation of your car is pointless) I did a bit of digging. I follow Michael Geller on Twitter, and a few tweets confirmed that and increase of supply and redistribution were on the menu. However, a reading of Michael Geller’s report indicates that he identifies government as a problem and that affordability could be accomplished by more density/smaller units.
    It’s difficult to dispute this. It’s common knowledge that increased government regulation and fees add to building costs. Comically, the building industry is suggesting that an ombudsman be appointed to resolve conflicts that arise when builders and developers try to reconcile apparently mutually exclusive requirements of competing branches of the same government (there’s an easier solution – require government to make its mind up and shrink itself).
    It’s also common knowledge (as well as a market tested practice) that housing (like any product) can be made more affordable to the consumer by selling less product at a higher per unit price. We’ve seen quality and per sq. ft. prices increase in the condo market as overall unit size has shrunk. Consumers pay less for less, and affordability is thereby accomplished.
    I believe that those two routes – less active government intrusion and increased density – are the way to accomplish affordability. Geller’s report makes several good suggestions in this regard. Their implementation requires government to back off a bit, which is a challenge for any bureaucracy, but they’ll also require overcoming NIMBYism. It won’t be easy, but it could work.
    Redistribution is just wrong and won’t work. There is no reason why I should subsidize someone’s rent or mortgage payment so that Starbucks or McDonalds can keep wages low. Further, the market typically rewards subsidization by increasing prices. Give welfare recipients a bigger housing allowance and rents at the bottom of the market go up. Requiring a developer to subsidize low income earners by providing designated low rent units in market develops simply results in purchasers paying more for their housing.
    Like it or not, we live in a market economy. Market solutions hold the most promise for affordability. Government should restrict itself to incentivizing affordability through permits, zoning and taxation while respecting property rights of all citizens.

    Well-loved. Like or Dislike: Thumb up 32 Thumb down 10

    Romeo Jordan Says:
    83

    I know it’s an outlier (probability wise), but i’m still hoping that the negative news flow and the increased social chatter will push a lot more listings onto the market this month.

    Fingers crossed – let’s take this bitch of a market down nice and hard (and fast), I’d like to move on with things….we know how the story ends, skip to the credits.

    Thousands of families are facing economic armeggedon. To the innocents, I wish you all the best.

    Sincerely.

    Well-loved. Like or Dislike: Thumb up 40 Thumb down 8

    @YVR2ZRH:

    Very very possible – that’s barely 1% per month (or as Tsur S. calls it . . Flat).

    10% a year is flat… so you’re saying Dave is Tsur?

    Well-loved. Like or Dislike: Thumb up 35 Thumb down 4

    @Anonymous:

    Except that when prices are rising, it takes a lot less work to make a lot more money.

    Possibly, but the ease of closing deals is offset by much higher competition. How many realtors today vs 10 years ago?

    Like or Dislike: Thumb up 2 Thumb down 4

    Please don’t hate Paul Eviston. I cannot hope count the times I’ve used his notepads for writing out buy vs rent calculations.

    Well-loved. Like or Dislike: Thumb up 50 Thumb down 7

    It seems everyone is now convinced that the ship is going down, but no one can figure out why. There was, however, one educated guess:

    “And cycles happen.”

    — Somerville

    Read more: http://www.vancouversun.com/business/Vancouver+home+sales+September+plunge+cent+from+year+mark/7332924/story.html#ixzz28CXUp7eg

    Like or Dislike: Thumb up 4 Thumb down 0

    UnagiDon Says:
    88

    @Dog: “VMD – can you even afford a place in Richmond?”

    Ironic. Has Dog been around long enough to know what VMD stands for? (Or is he smart enough to decode the acronym?)

    Well-loved. Like or Dislike: Thumb up 45 Thumb down 3

    Bailing in BC Says:
    89

    @jesse:

    My shopping list guy just quit the biz. Not sure what I’ll do :-(

    Like or Dislike: Thumb up 5 Thumb down 2

    @UnagiDon:
    apparently it also stands for Vote Me Down ; )
    perhaps changing my name to VMU will help..

    Well-loved. Like or Dislike: Thumb up 44 Thumb down 2

    kansai92 Says:
    92

    In other news, parking rates drop in downtown Vancouver.

    http://www.vancouversun.com/travel/Parking+rates+into+reverse+Vancouver+defies+national+trend/7334652/story.html

    No doubt because we’re losing jobs and business left, right and center.

    Well-loved. Like or Dislike: Thumb up 37 Thumb down 3

    Anonymous Says:
    93

    Hidden due to low comment rating. Click here to see.

    Poorly-rated. Like or Dislike: Thumb up 3 Thumb down 22

    [...] “SFH Stats Sept 2012: (ranked by worst sales decline) Richmond: Sales:-50% YoY, -10% MoM Ratio: 22% vs 32% HPI: -4.2% YoY, -1.3% MoM Median: -9.8% YoY, -1.4% MoM Burnaby: Sales -49% YoY, -10% MoM Ratio: 18% vs 35% HPI: +4.2% YoY, -0% MoM Median: -13% YoY, -6.3% MoM Van East: Sales:-48% YoY, -6% MoM Ratio: 30% vs 51% HPI: +3.2% YoY, -1.1% MoM Median: -2.5% YoY, -0.6% MoM Coquitlam: Sales:-37% YoY, +16% MoM Ratio: 30% vs 51% HPI: +3.6% YoY, -0.2% MoM Median: +0.4% YoY, -3.7% MoM Van West: Sales:-17% YoY, +15% MoM Ratio: 27% vs 27% HPI: -6.5% YoY, -1.3% MoM Median: +1% YoY, +0% MoM” – VMD at VCI 2 Oct 2012 1:17pm [...]

    Like or Dislike: Thumb up 4 Thumb down 1

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