Vancouver & Fraser Valley drag down BC

Remember when rising prices in Vancouver were bringing up national averages? It seems times have changed, now the numbers out of Vancouver and the Fraser Valley are so bad they’re dragging down the rest of the province:

The total value of homes sold in B.C. dropped by nearly one-quarter in November, with declines in Vancouver and the Fraser Valley leading the slide.

The dollar volume of homes sold through the Multiple Listing Service in B.C. declined 24.6 per cent to $2.3 billion in November compared with the same month last year, the B.C. Real Estate Association reported Thursday.

But don’t worry, the BCREA expects prices to start going back up next year.. hey, that’s less than a month away!

Cameron Muir, BCREA’s chief economist, said that tighter mortgage rules introduced this summer had squeezed some buyers out of the market, but he expects sales to go up in 2013.

“When I suggest that we’re going to see an increase in sales levels next year, it doesn’t mean we’re going to return to the heady days before the recession. But the longer we see sales levels fall below the long-term average, the more likely we’re going to see pent-up demand (grow) in the marketplace, which may contribute to increased sales activity in 2013,” Muir said.

The number of units sold this November was down 17 per cent in the province from November 2011 to 4,680, while the average price was down 9.1 per cent to $480,891.

Read the full article in the Vancouver Sun.

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PCinWA
PCinWA
7 years ago

VHB,

I’m relatively new to this board, and find your daily tables derived from what PaulB posts to be very helpful and interesting. I’m a bit of a data junkie, and was therefore wondering if these daily data are available somewhere that others can access.

Thanks!

How much??
How much??
7 years ago

Yes indeed. The bulls will be lined up to buy after taking a 25% haircut on their highly leveraged investment. Remember how people bought in huge to Nortel after the dot com bubble??? Oh wait… That never happened and neither will a big rebound after bulls get their asses handed to them.

Anonymous
Anonymous
7 years ago

#52

“If prices drop just half that the bulls won’t be laughing for a very long time to come.”

Don’t be so sure. The bulls will go shopping and then cash in when prices rise again. The bears will keep waiting for the market to fall another 25%, and they will miss the bottom … again. Then who is laughing?

VHB
VHB
7 years ago

We’re at 15028 in paulb inventory right now.

On Dec 20, 2011, we were at 12937. On Jan 4th 2012, this went to 10854, so about 2K down.

This suggests we will likely start 2013 with about 13K in inventory. For perspective, we started Jan 2009 (following the disastrous fall of 2008) with about 13.5K. This rose a bit to 15K by February 2009 but then pretty much flatlined until May when it started declining.

So, the big thing to watch in January is how quickly we gain inventory. A mild gain like in 2009? Or a supersteep gain like in January 2012?

One more thing. The average December sell-list ratio from 2001 to 2011 was 111.3%. Median was 114.1. 2008 was 59.6%. We’re coming in at low 70s so far.

VHB
VHB
7 years ago
Dec-2012	
Total days	19
Days elapsed so far	11
Weekends / holidays	6
Days missing	0
Days remaining	8
7 Calendar Day Moving Average: Sales	60
7 Calendar Day Moving Average: Listings	81
SALES	
Sales so far	728
Projection for rest of month (using 7day MA)	478
Projected month end total	1206
NEW LISTINGS	
Listings so far	992
Projection for rest of month (using 7day MA)	650
Projected month end total	1642
Sell-list so far	73.4%
Projected month-end sell-list	73.5%
MONTHS OF INVENTORY	
Inventory as of December 17, 2012	15028
Current MoI at this sales pace	12.46
Romeo Jordan
Romeo Jordan
7 years ago

looks like yattermatters is dead as a doornail

Romeo Jordan
Romeo Jordan
7 years ago

well, hopefully this is the boring part and we start to scream downward again in the coming months

i bet all this rain has been bad for mclovinit’s business

Bag it and tag it
Bag it and tag it
7 years ago

@BPOM. RE Muir’s 2008 10% price drop prediction for Van in 2009. What’s even better is that he actually revised his prediction for 2009 to a 14% drop in Feb 2009, right before prices shot up. If you open your link, check out the comment at the bottom.

vancouverguy
vancouverguy
7 years ago

“In the end of 2012, CREA projected BC would have -7.8% in 2012”

Great comparison, G. Funniest part is that while they are admitting a significant drop in the rear view mirror, they nonetheless proceed to predict a drop of only 0.3% for Vancouver in 2013. What I joke.

G
G
7 years ago

In the end of 2011, CREA forecasted BC would have -1.8% change in average price for 2012
http://creanews.files.wordpress.com/2011/11/q3-average-price-forecast.png

In the end of 2012, CREA projected BC would have -7.8% in 2012
http://creanews.files.wordpress.com/2012/12/table-2.png

Not bad in prediction if you ask me, out of two digits, CREA got the number “8” right on.

jay
7 years ago

“It took just eight months of shrinking sales for the nation’s realtors to admit it. The market’s in retreat. The prospects for 2013 kinda suck. And it’s all Ottawa’s fault.”

Interesting read from Garth’s blog:
http://www.greaterfool.ca/2012/12/17/only-in-kanada/

paulb
7 years ago

New Listings 108
Price Changes 47
Sold Listings 83
TI:15028

http://www.paulboenisch.com

Anonymous
Anonymous
7 years ago

Re. #52.

I’m not talking about gains or losses. I’m talking about silly predictions and ensuing hilarity. If the market just sort of flattens many of us will just have a little chuckle but soon get bored with the whole thing and start thinking about something more interesting.

patriotz
7 years ago

“All the gleeful predictions of a 50% drop may well end up the laughing stock of bulls for years to come.”

If prices drop just half that the bulls won’t be laughing for a very long time to come.

Remember – we’re not short RE. We don’t lose anything if our price expectations don’t happen. But those who are long do.

Anonymous
Anonymous
7 years ago

Re. #48

“Lesson: don’t publicly predict the magnitude and direction of the market or bears will laugh at you for years to come.”

A lesson many here have not yet learned. All the gleeful predictions of a 50% drop may well end up the laughing stock of bulls for years to come.

patriotz
7 years ago

“Flaherty is rightly concerned about a “hard landing” because it will all but guarantee he will leave his post without balancing the budget.”

Any kind of on-budget assistance to homeowners would massively increase the deficit.

The US programs basically involve getting lenders to write down balances or modify loan terms in exchange for a federal guarantee. They are not gifts from the treasury to homeowners. Canadian lenders already have government guarantees so there’s no incentive for them to participate in such a program, and I think any attempt by the government to strongarm them into one would have serious repercussions.

But as I said, if it’s off-budget, even nuttiness like capitalising missed mortgage payments onto the balance and guaranteeing the increase, it wouldn’t surprise me.

bubbly
bubbly
7 years ago

: I don’t think it’s funny. I wish he was right back then. But lower real estate prices were verboten.

jesse
7 years ago

@BPOM: “Here’s what he said in October 2008”

Hahaha also there were some gems from Helmut Pastrick around that time. He was downright bearish in early 2009 on BC housing. House prices then proceeded to fully recover and then some.

Lesson: don’t publicly predict the magnitude and direction of the market or bears will laugh at you for years to come.

gokou3
gokou3
7 years ago

Re #44:

I agree that bailouts don’t work, but also think there would be some form of relief from the government. It would be such a vote-magnet solution for the politicians, who of course won’t let it go to waste.

jesse
7 years ago

“gifts from either the federal or provincial governments to existing homeowners”

In the US there were “gifts” in the form of HAMP/HARP. If owners hit negative equity in a larger way (and they will if prices in Vancouver drop by 20% or so in 2-3 year tmeframe) there will be bailouts. There were in the early 1980s to combat high default rates. I expect similar programs in the coming years, assuming prices fall hard.

Flaherty is rightly concerned about a “hard landing” because it will all but guarantee he will leave his post without balancing the budget.

gokou3
gokou3
7 years ago

Re #36:

“Most analysts still see a soft landing.”

When will people finally interpret the word “still” as used in financial news as “no longer” or “will not”? I find such word replacement to be valid most of the time. Few months ago analysts “still do not see a price drop”.

patriotz
7 years ago

” he won’t have much choice but to issue some form of bailout. ”

There isn’t going to be any bailout, i.e. gifts from either the federal or provincial governments to existing homeowners. Not possible fiscally or politically and very little bang for the buck in supporting prices.

Sales incentives, sure. We already have them. Looser mortgage rules, sure. But they won’t work any better than they did south of the border – delaying the bottom by a year or two.

Anonymous
Anonymous
7 years ago

@Best place on meth #40

So he was completely wrong about 2009 and hence not infallible. But, the fact that he predicted a 10% drop in 2009 (when prices actually went up by about 10%)perhaps suggests that he isn’t just a pumper and a pimp who will hype real estate no matter what?

UnagiDon
UnagiDon
7 years ago

I propose we rename Cam Muir to Burnaby Bob.

“The price drops are not even within 100 miles of Burnaby. They are not in any place. They hold no place in BC. This is an illusion.”

“We’re giving them a real lesson today. Heavy doesn’t accurately describe the level of bidding wars we have inflicted.”

“Faltering forces of VCI infidels cannot control a city of 3 million people and lay besiege to them!”

“We welcome the bears with balloons and dashcams.”

bubbly
bubbly
7 years ago

@BPOM: Interesting. Maybe I am too cynical about him. 🙂