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.

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patriotz
Member
3 years 9 months ago

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.

CanuckDownUnder
Member
CanuckDownUnder
3 years 9 months ago
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… Read more »
patriotz
Member
3 years 9 months ago

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?

Keeping An Eye On The Pimps
Guest
Keeping An Eye On The Pimps
3 years 9 months ago

“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.

Keeping An Eye On The Pimps
Guest
Keeping An Eye On The Pimps
3 years 9 months ago

“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

FlipFlop
Guest
FlipFlop
3 years 9 months ago

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.

patriotz
Member
3 years 9 months ago

@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.

Bears Are Always Wrong
Guest
Bears Are Always Wrong
3 years 9 months ago

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

Groundhog
Guest
Groundhog
3 years 9 months ago

@Bears Are Always Wrong

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

McLovin
Guest
McLovin
3 years 9 months ago

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

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

GVREB
Member
GVREB
3 years 9 months ago

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

Anonymous
Guest
Anonymous
3 years 9 months ago

@McLovin: next spring of what year? the year you turn to 65 and collect the golden cheques?

Anonymous
Guest
Anonymous
3 years 9 months ago

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

Anonymous
Guest
Anonymous
3 years 9 months ago

@CanuckDownUnder: vancouver bears are dumb, so are the down-under-wanna-be bear!

s
Guest
s
3 years 9 months ago

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

Hugh G Rection
Guest
Hugh G Rection
3 years 9 months ago
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… Read more »
asalvari1
Guest
asalvari1
3 years 9 months ago

@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.

N
Guest
N
3 years 9 months ago

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.

jack b nimble
Guest
jack b nimble
3 years 9 months ago

@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 🙂

McLovin
Guest
McLovin
3 years 9 months ago

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.

taylor192
Member
3 years 9 months ago

@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.

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!
3 years 9 months ago

I love all the money I’ve made betting against bears! All you have to do to get rich in this city is to not listen to the bears!

Nice cars, vacations, spas, nice restaurants. This city offers it all to you on a silver plater.

oneangryslav2
Guest
oneangryslav2
3 years 9 months ago

@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.

Aleksey
Guest
Aleksey
3 years 9 months ago

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?

Anonymous
Guest
Anonymous
3 years 9 months ago

@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.

Anonymous
Guest
Anonymous
3 years 9 months ago

@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.

Makaya
Member
Makaya
3 years 9 months ago
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… Read more »
Anonymous
Guest
Anonymous
3 years 9 months ago

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).

gokou3
Guest
gokou3
3 years 9 months ago

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

Many Franks
Guest
Many Franks
3 years 9 months ago

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.

Patiently Waiting
Member
Patiently Waiting
3 years 9 months ago

@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.

Aleksey
Guest
Aleksey
3 years 9 months ago

@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.

Aleksey
Guest
Aleksey
3 years 9 months ago
@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… Read more »
Not much of a name...
Member
Not much of a name...
3 years 9 months ago

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.

gordholio
Member
3 years 9 months ago
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… Read more »
VMD
Member
3 years 9 months ago

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
patriotz
Member
3 years 9 months ago

@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”.

market stats
Guest
market stats
3 years 9 months ago

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

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!
3 years 9 months ago

@Makaya: Oh yes, I know I haven’t seen anyone point out similar SIGNS OF THE TIMES in the past 6 years this blog has existed. these SIGNS OF THE TIMES truly do indicate the end of days for the Canadian real estate bubble.

Thank you for sharing this unique and truly one of a kind news item, which has never occurred in the previous half decade.

SIGN OF THE TIMES my friend, SIGN OF THE TIMES.

patriotz
Member
3 years 9 months ago

@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.

VMD
Member
3 years 9 months ago

@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.

Anonymous
Guest
Anonymous
3 years 9 months ago

@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?

Not much of a name...
Member
Not much of a name...
3 years 9 months ago
“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.… Read more »
N
Guest
N
3 years 9 months ago

@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.

Told-you-so
Guest
Told-you-so
3 years 9 months ago

@ 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!

gokou3
Guest
gokou3
3 years 9 months ago

@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.

Not much of a name...
Member
Not much of a name...
3 years 9 months ago

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

ArthurFonzarelli
Guest
ArthurFonzarelli
3 years 9 months ago

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?

JR
Guest
JR
3 years 9 months ago
@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… Read more »
VMD
Member
3 years 9 months ago

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

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