November 2012 stats – prices keep sliding

The following is a release from the GVREB which should not be confused with the Real Estate Board of Greater Vancouver (REBGV). This is what the GVREB says about itself:

“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”

Here’s their report on the market at the end of November 2012:

Firm trend of lower prices in Greater Vancouver as demographic changes bring motivated sellers to market
FOR IMMEDIATE RELEASE ON VCI

VANCOUVER, B.C. –December 3, 2012 – The pace of property sales slowed in November 2012 from October 2012 to be the second slowest month of November in the past 12 years. The slower selling pace combined with higher inventory levels continues to put downward pressures on home prices. In addition, the leading edge of a demographic change is appearing where aging home owners are selling their long-held principal residences in order to downsize in their retirement years. In certain higher priced markets, we are seeing older-aged sellers accept significant discounts on their asking price to complete their sale transactions. This is putting additional downward pressure on prices and setting the clearing price of the market lower. We foresee continued market weakness with no positive changes in macroeconomic factors expected in the next 18 months.

GVREB reports that residential property sales of detached, attached and apartment properties fell to 1,698 in November 2012, the second lowest total for the month of November in the past 12 years. This total represents a 28 per cent decrease compared to the 2,360 sales in November 2011. Contrary to mid-year predictions from local real estate market associations, the second half of 2012 has not resulted in an increase in sales from the first half but instead has continued to deteriorate.

November 2012 had a modest deterioration in sales pace which resulted in a seasonally unusual increase in the number of months of inventory. Prices also continued their downward trend with market-wide benchmark prices now down approximately 5% from their peaks in May 2012. With slow sales and high inventory, lower prices are now being set by the motivated and aging owners who desire or require their property to sell. These unlevered sellers are willing to accept very large discounts below their asking price in order to realize the large gains they have realized over their original purchase price. We believe this the front edge of a demographic trend that economists have predicted would occur.

New listings for detached, attached and apartment properties in Greater Vancouver totalled 2,750 in November 2012. This was more than 10 per cent below the seasonal average and 15 per cent below the 3,222 listings in November 2011. However, as sales have slowed more than listings, the sales to new listing ratio of 62.0% was the second lowest for the month of November in the past 12 years. The number of active listings at the end of November 2012 was 15,680. Inventory decreased approximately 10 per cent compared to the end of October 2012 while MOI increased to 9.2.

The Residential Reference Price for all residential properties in Greater Vancouver over the last 12 months decreased by 1.2 per cent to $600,200 in November 2012 from $607,200 in October 2011. From the peak price level in May 2012, prices have now decreased approximately 5 per cent in those 6 months.

Sales of detached properties in November slowed to 637 units, a decrease of 30 per cent from the 916 detached sales recorded in November 2011, and a 39 per cent decrease from the 1,050 units sold in November 2010. On a monthly basis, the number of sales November 2012 was down almost 20 per cent from October 2012 and fell at a rate much higher than that of the attached and apartment segments. The reference price for detached properties fell to $916,000 compared to $936,200 in November 2011.

Sales of apartment properties fell to 752 units in November 2012, a 25 per cent decrease compared to the 1,000 sales in November 2011, and a decrease of 28 per cent compared to the 1,052 sales in November 2010. In the past 12 months, the reference price of an apartment property decreased by 2.2 per cent to $362,500 from $368,600.

Attached property sales in November 2012 totalled 309, a 30 per cent decrease compared to the 444 sales in November 2011, and a 24 per cent decrease from the 407 attached properties sold in November 2010. The reference price of an attached unit decreased 3.1 per cent from October 2011 to $459,000.

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Anonymous
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Anonymous

5% drop in 6 months, soft landing?

Keeping An Eye On The Pimps
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Keeping An Eye On The Pimps

Report:

Observed
Recorded
Analyzed

Concluded:
1) It is not mathematically possible for this thing to end well.
2) Cameron does pull numbers out of his anus.

Patiently Waiting
Member
Patiently Waiting
Vote Down The Facts
Guest
Vote Down The Facts

What is the “Residential Reference Price”?

painted turtle
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painted turtle

Could win the best pictures contest 🙂
http://bchomez.com/5538-main-st-vancouver-duplex-v981864/

Simple
Guest
Simple

Slow day. I thought I would help the REBGV with *their* November stats package. Here is my contribution.

http://postimage.org/image/rum0h5lh7/

Crikey
Guest
Crikey
A key part of that news release is the admission that: “the leading edge of a demographic change is appearing where aging home owners are selling their long-held principal residences” Yes, only the leading edge. And already it is having an effect! What do you think happens as, progressively over the next few years, that thin leading edge of aging home owners turns into a thick stampeding horde or aging home owners rushing to the exits? And what do you think happens to prices as the aging sellers realize that this time there will be no cavalry of young homeowners that can possibly buy up all the inventory, much less at recent ridiculous prices? In the “good” real estate years, I was witness to several seniors who had sudden urges to sell their homes. In every case, they were extremely… Read more »
900kCrackHouse
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900kCrackHouse

“Greater Vancouver’s overheated housing market required some much-needed cooling off, he said. “You don’t really hear the word bubble when discussing the Vancouver housing market any more, and that’s a good sign because the market is adjusting gradually and in a moderate way, and in a way that won’t cause major concern in the medium term about the growth prospects for B.C.,” Mr. Marcil said.”

http://www.theglobeandmail.com/report-on-business/economy/growth/bc-property-prices-a-lesson-for-provinces/article4573288/

————————–

Really? We don’t hear the word bubble anymore? Perhaps it is because people are starting to take it for granted that Vancouver is in a bubble? Or they are too scared to talk about it? Or maybe when you look at someone selling a crack shack on the westside for $2.888,888 that they have dropped down from $5,000,000 there is no need to mention bubble because it is pretty freaking obvious????

Wakeup Call
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Wakeup Call

“5% drop in 6 months, soft landing?”

We’re just getting started, the best is still to come.
That would suggest a 20% drop in 2013, but 25% would by no means be out of line.

gokou3
Guest
gokou3

@900kCrackHouse: I think the most important part of this article to understand is the so-called “wealth effect”. Specifically, now that we are in a down cycle, the negative wealth effect will be seen. Again, this results in a vicious cycle and explains why a soft landing rarely exists, if ever.

gordholio
Member

Haha painted turtle, 900K for that steaming pile of Main Street dung. And you’re right – such dazzling photography.

Speaking of photography, I posted a link here the other day to my neighbourhood photo essay, and have gotten 210 visits so far because of it. Dang…this is a popular place.

vanpire
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vanpire

@painted turtle:
Ha, but this one at least has pictures.
How about all of the listings that come with no pictures at all. And why would sellers who hire those lazy-ass agents allow for that?
Because they don’t live here and can’t possibly check on how good of a job their “realtor” is doing? Or perhaps those are all lazy-ass agents’ own listings… Either way, good luck!

DaMann
Member
DaMann

@gordholio:
“Speaking of photography, I posted a link here the other day to my neighbourhood photo essay, and have gotten 210 visits so far because of it. Dang…this is a popular place.”

Linkage? Would like to check it out

RaggedyRenter
Guest
RaggedyRenter

@Wakeup Call:
For a 20-25% yearly drop to happen we need a massive turn of psychology from denial-to-panic or a black swan event like stock market crash, sudden liquidity crunch, interest rate rise, or rising unemployment rate.
I would think death by thousand paper cuts is more likely. 0-1% drop a month. Which is still a lot by any means.
I imagine Fall-Winter 2013 will be when the majority finally realized we can’t resuscitate Vankenstein anymore and will rush to the exit by any means necessary (liquidating, foreclosing, declaring bankruptcy, suing developers). Pensioners and Boomers liquidating their handsome profit (even after 10-25% drop) alone would kneecap the market for years to come.

N
Guest
N

@vanpire:

“Because they don’t live here and can’t possibly check on how good of a job their “realtor” is doing?”

Actually, someone who didn’t live here would probably be more interested in, and aware of, the online presentation, because that is the only part of their realtor’s work that they can check.

Many Franks
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Many Franks
Anonymous
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Anonymous
Just ran into a former co-worker who mentioned that he’s retiring; a bit of a surprise as he’s not that old. I asked him wadup? He said he sold his house and is leaving Vancouver. He said its weird; even though he sold his house for a whack of cash (enough to retire on) he can’t afford to live here because he didn’t want all his ‘money’ tied up in one asset (which we’ve discussed many times). Bit of an eyeopener for me as I’ve always though of the negative impact on RE prices due to people avoiding moving to Vancouver as it’s too expensive. Never really though of the impact of those already here (with equity) leaving Vancouver because it’s too expensive. We’ve all heard Vancouver dinks saying ‘if you can’t afford Vancouver prices, don’t come here. Odd that… Read more »
Anonymous
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Anonymous

“You don’t really hear the word bubble when discussing the Vancouver housing market any more…”

Ahh, he’s referring to Vancouver Washington.

Troll
Guest
Troll

FVREB Nov. Stats

http://www.fvreb.bc.ca/statistics/Package%20201211.pdf

Sales down 20% for Nov. YOY. Overall prices up 1.3% YOY, but down 1.0% over past 6 months. Nothing spectacular. Some relatively strong areas (North Surrey) and some weak (South Surrey / White Rock)

Sales to existing listing at 10%, firmly in buyer’s market territory

HAM Solo
Guest
HAM Solo
@ Troll Thanks for the update. Same pattern as in Victoria. Median condo prices down across the board in Fraser Valley, -6.7% Y-o-y. And that is on reduced activity, wait for investors to try liquidating. With numbers like these and the same in Victoria, and with the problems in Vancouver pre-sales, who is going to break ground on a condo project anywhere in BC over at least the next 18 months? As for the SFH prices, which are treading water, think of the levels of refurbishment and renovation being required just to keep the average price stable. With renovations probably returning negative and with declining property turnover rates, the SFH flip is probably also dead. How is it that the Northern Gateway can hit the business front page every day and yet the early signs of complete collapse in activity… Read more »
VMD
Member

Battle of Vancouver: Quick update from Fraser Valley Front:

SFH: Bear Forces invaded from Langley and successfully expanded its territory into South Surrey & White Rock, which is now also in negative YoY territory in terms of HPI price. Other sub-regions in Surrey remain in Bull control similar to last month.

Condo: Bear Forces successfully took down Langley. Now North delta, Central Surrey, South Surrey, White Rock, Mission, and Langley are all in negative YoY HPI territory. Bull’s control over its positive-YoY HPI territories are loosening, across all sub-regions.

Once REBGV data is out, the battle map will be updated.

VMD
Member
VMD
Member
Best place on meth
Member
Best place on meth

A nice little 1.1% decline overall in the HPI.

Drip…drip…drip…

Slow and steady, like Chinese water torture.

YLTNboomerang
Member

I got sent BMO’s comment on the HPI and Vancouver market today and noticed a little remnant of a line in the future, I wonder if they are forecasting and tried to hide their forecast but missed a bit in PPT? Anyway, I uploaded an image here (sorry about the quality, I couldn’t use the forum upload with my work laptop):

http://tinyurl.com/cln79un

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