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Home and Condo sales battle map

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VMD has been busy over at the new Vancouver Peak Forum uploading new Battle of Vancouver maps.

These maps show the increase or decline in year-over-year REBGV home price index (The Benchmark or HPI).

There are maps for both the condo market and for single family homes in the lower mainland, along with a few historical maps for comparison.

Here’s the map for SFH, showing big changes in South Surrey and UBC:

Battle_of_GV_SFH_2012_12_arrow

And here’s the map for Condos, which looks similar but the big changes are in South Surrey but Bull forces are firmly entrenched in Guilford and Pitt Meadows.

Battle_of_GV_Condo_2012_12

 

Here’s the original discussion thread for the Condo map and for the SFH map.

You can find more great creations and analysis from VMD over at greaterfoolvancouver.

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rp1

#70: -A few very large companies announce they are moving HQ to Vancouver Like Chinese SOEs? Hell all their people are here. Any kind of fraud/scam company could do well. -Inflation starts to rise significantly and people, viewing RE as a hedge, re-ignite the speculative fever Entirely possible, since people respond to real interest rates. -CAD drops and foreign investors… Falling currencies get rising interest rates so in this scenario a bomb goes off. -The expiration of the first-time buyers tax credit The problem is people are running out of money and builders don’t run out of projects. -CMHC limit raised significantly, party re-starts They’d need to make the effective real interest rate a lot lower than it already is. -The return of HAM? China is printing so this is on the table. -Tax changes It would have to be… Read more »

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Groundhog

Wrote my post before I saw yours. With all the media attention lately the fact that no RE agent or bull has been able to provide any reasonable argument for further gains makes me pretty confident there’s no saving this market, but still I think its good to realize its not 100% certain and there are unknown circumstances that we can’t predict that maybe could keep the market afloat.

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jesse

“if he’s short Yen hes in a good position now”

I assume you mean he’s short JPYUSD? It depends on how Bass structured his trades and whether he rolls them over.

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Groundhog

Bullish case for RE: -A few very large companies announce they are moving HQ to Vancouver -Inflation starts to rise significantly and people, viewing RE as a hedge, re-ignite the speculative fever -CAD drops and foreign investors, looking at the % decrease in CAD and % decrease in RE the last year, start bidding up properties and locals start bidding up properties as confidence returns that Vancouver IS the best place on Earth -The expiration of the first-time buyers tax credit causes a rush to buy and an increase in prices. The increase in prices ignites again speculation that the correction is over, and others jump in -Another financial crises (Europe, US, Japan, China,???) causes the government to loosen standards again. CMHC limit raised significantly, party re-starts -The return of HAM? -Tax changes – Interest rate deductability? More changes to… Read more »

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jesse

“There are circumstances which could either cause the market to be flat or even start to rise again.” After being students of previous Vancouver housing market “surprises” to the upside, I think commenters here can put a bit more quantitative meat on this. What ‘circumstances’ would cause the market to be flat or rise? (I’m assuming you mean flat for a year or more, not just for a few months, which is not really flat because of relative price strength in the spring selling season) I see some possibilities that could lead to less severe price drops than 2012. The first is a renewed bout of investment leakage out of Asia after their latest round of stimulus. I don’t know how to put a value or probability on that but it occurred before and was delayed by about 6-12 months… Read more »

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Groundhog

@Jessie

Not sure what Kyle Bass’s position is but if he’s short Yen hes in a good position now, its at a 2.5 year low!

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Achilles HELOC

@ Groundhog

Yes, anything can happen. But “land-use restrictions”, “immigration to the cities”? Come on, cut our friends some slack.

I think what could conceivably happen is that a government in Ottawa could freak out and turn a blind eye to(or even encourage) massive lending fraud that temporarily juices prices for another quarter or two. But that’s in the more remote reaches of probability. Most likely we all just hear a big thud.

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Groundhog

I know this post will probably get voted down, but judging by the responses to RealityCheck’s post, I think it needs to be pointed out. It is not 100% certain that prices drop and keep declining. I have been bearish on RE ever since I first did some math in 2007 on whether I should buy or rent. In all the years since I have never regretted my decision to rent, and I do not now. I am far more ahead right now both job-wise, education-wise, and asset-wise then I would be if I had bought. I believe fully prices will return to historical price to rent and price to income measures. House prices, when adjusted for inflation, did not rise in all of the 20th century and I doubt they will in the 21st. All that being said: It… Read more »

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Democrass

“Remember, RE in Vancouver has been on a tear since 2002. Long before 0/40 and Emergency Interest rates.”

2002 was not “long before … emergency rates”. Emergency rates began in 2001 after 911 and the collapse of the dot com bubble. So the Vancouver real estate book did not start before emergency rates but was ignited by them.

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Anonymous

RealtyCheck: “When should we start considering the above numbered factors? After this spring? Fall 2013? 2015? When?”

Those ‘factors’ have been around in long before the latest bubble and are present in pretty much every other second and third tier city around the world just like Vancouver. Sorry we are not different. Your house value is about to plumet.

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jesse

“if the market stabilizes this spring, can we assume that we are missing something”

Do you mean prices remain flat or increase slightly from March to June? If so, I would not assume we are missing anything; a 1-2% rise over that period is not bullish for prices for the rest of the year. You could see the same effect in Seattle/Portland during their corrections.

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Anonymous

RealtyCheck: “Remember, RE in Vancouver has been on a tear since 2002. Long before 0/40 and Emergency Interest rates.”

Yes we started out at 20% down, 25 year amortizations and 7 to 10% interest rates prior to 2002. Then we got 5/25, 5/30, 5/35, 0/40 along with declining interest rates down to 3% emergency interest rates. Yes prices went up with the credit bubble which started in 2002. Now things are going in reverse. Not much chance real estate doesn’t follow. It is kind of like dumping gasoline on a fire then stopping and starting to put water on it. The fire burns out. The water part just started BTW.

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Aleksey

@ Reality Check
If RE market stabilizes this year and prices start rising again then I’m leaving. I’m tired of this nonsense.

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Vote Down The Facts

Bo, weren’t there several suspicious fires in 2008 too? A couple at marinas, the Quatro development in Surrey, etc?

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HappyRe(a)nter

RealityCheck Says: iIf the market stabilizes this spring, then pigs will start to fly.

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Bo Xilai

Here’s a novel way developers are trying to recoup their capital from failed ventures… If they can’t finish it, burn it for the insurance money.

Maybe this will be ONNI’s tactic in 4 or 5 years.

http://www.cbc.ca/news/canada/british-columbia/story/2013/01/07/bc-arson-suspected-condo-fire.html

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VMD


Best to boil a frog slowly .
An avg 1%-1.5% per month decline is slow enough to allow the RE boards to continue their public reassurances but not too slow to be used as a strong argument for un-tightening of mortgage rules. 1-1.5%/month annualized is 12-18%. If Vancouver drops 12-18% for 2013, nationally it will likely only drop a small fraction of that, insufficient to call for re-loosening of lending rules. Just my thoughts. : )

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Groundhog

In the end to me the costs of home ownership far outweigh the benefits right now so if I am wrong about house prices not falling thats ok with me, Ill continue on as I have been

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HAM Solo

@ Reality Check

Don’t forget a few more:

a) We’re running out of land
b) There are helicopters full of rich Asians who want to buy multiple properties for the CNY
c) Price doesn’t matter because people would rather own than make rational investment decisions with their money
d) We’re in the Best Place on Earth!

…oh, and I forgot…

e) This time, it’s different

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Anonymous

@realitycheck

Ive thought about that a lot. My thought is if I am completely wrong, then Ill continue living richly off my subsidized house (rent) and keep piling excess money into other assets which are more appropriately valued.

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RealityCheck

if the market stabilizes this spring, can we assume that we are missing something?

Maybe (1) concentrated Immigration into the cities, (2) Land use restrictions, (3) People buying because they can afford the monthly have more of an effect than interest rates etc.

Remember, RE in Vancouver has been on a tear since 2002. Long before 0/40 and Emergency Interest rates.

When should we start considering the above numbered factors? After this spring? Fall 2013? 2015? When?

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HAM Solo

@ VHB

It is interesting how slow the listings are out of the gate. But sales are slow, too, in fact they are really the shocker of 2013 so far.

My guess is that listings gather strength, in terms relative to history through the spring. Right now it feels like a “deer in the headlights” phase. Interestingly, because so many lenders are not at risk due to insured credit risk, we are not going to see banks drive the market down.I think the bigger culprits will be developers (whose inventory doesn’t show up here) and deep-equity sellers/downsizers. But any way you slice it, once the HPI starts printing -10% plus…the mortgage insurers will have to enforce foreclosure discipline on the banks.

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Makaya

Nomura is not just a Japanese bank, they have significant presence in other countries. True but…
Nomura retreats to faltering Japan

By the way, one of the reason why I also believe “this time is different” 🙂 about the Japanese situation is that: http://www.tradingeconomics.com/japan/balance-of-trade

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Vote Down The Facts

VanRant, the government already knows who is in the country. Don’t you have a passport? Or a drivers license? Or pay taxes?

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