Vancouver house prices ‘flat’ like San Diego

February 6, 2013 admin

b5baxter updated his crash curve graph over at Vancouver Peak. This is what he posted in the comments section on this site:

Latest REBGV HPI imposed on my price drop model:
http://vancouverpeak.com/Thread-Crash-Curve-Graph?pid=389#pid389
The HPIs continue to show remarkable correlation to the model.
I know some people feel that the bubble is “popping” very slowly here. But so far at least it seems to be following the same trend we saw in US cities that saw a 40% drop in prices.
If it continues to follow that trend we won’t have to wait 7 years to see bottom – just a little over two years.

…That’s right. The current rate of price declines in Vancouver that some have described as ‘flat’ is actually falling at the same rate that US bubble cities fell at their peak.

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admin

3 years 7 months ago

Comments were accidentally switched off for this thread, they should be working now.

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C.Junta

3 years 7 months ago

OT anecdote. Just came back from a family trip to Big White. As usual, I enjoyed occasional conversations with random people on lifts. Here is one of those chats. A gentleman in his fifties from some small town close to Edmonton. We started with sharing recent skiing experiences and discussing runs and current conditions. He turned out to be a retired person on his three-month getaway on Big White. Not bad, I thought to myself, perhaps just another retired business owner. I have mentioned that the village and the mountain looked deserted. Really, the resort is very quiet this year… Read more »

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Apocarypse Mao

3 years 7 months ago

Global National reports on China Housing Bubble:

“Global National : China’s housing bubble” Feb 4/13

http://www.youtube.com/watch?v=k9Xy2RDBJQU

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vangrl

3 years 7 months ago

Real Estate Weekly- newest edition Feb 8th- front page “TIPS ON BUYING WITHIN A JOINT VENTURE” highlights: -say 2 friends are renting apartments at $1200 a month, they realize they can combine their savings and buy a house! -after holding the property for a while, they can then sell and share in the equity appreciation! -pooling resources to buy a first home can be a smart move towards financial security – According to slimyAssed realtors (except Paul),it’s a plan that’s used widely and is very successful! WTF- can you think of anything more dodgy than jumping into a real estate… Read more »

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gokou3

3 years 7 months ago

Could someone kindly explain what’s the price drop model based on? When I clicked into the link, it looks like it’s related to the San Diego SFH price history from peak.

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Democrass

3 years 7 months ago

“WTF- can you think of anything more dodgy than jumping into a real estate investment with 3 friends? at this time in the market? or at any time?”

It works because real estate always goes up 🙂 There is a sucker born every minute.

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rails

3 years 7 months ago

it isn’t clear what this “model” reflects. Is it an average of Case-Shiller values with 3 standard-deviations as the “band”, a max-min or what? Is it based on a structural variable method? otherwise it is data mining – undercircumstances should it follow the US trajectory?

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gokou3

3 years 7 months ago

Hahaha… The $1 richmond listing did not sell:

http://www.shuchatgroup.com/Blog.php/richmond-condo-for-sale-for-1…-cont-d

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HAM Solo

3 years 7 months ago

Genworth MIC earnings call this morning. Interesting listening, there should be a link to the replay at the MIC website. Important thing to understand about this company is that, in theory, it is reporting mortgage insurance premium revenues and claim payment costs based on a three year lag. The reasons for the lag is because at some point they the three year point was the point of maximum loss. However, given that we know business turned down and losses shot upwards in the 2009-2010 window (esp in Alberta), that would cause them to report declining earnings in 2012-2013. So what… Read more »

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Turkey

3 years 7 months ago

There’s a BC-heavy post from Ben Rabidoux at the usual place. Spot on, as usual.

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Dumbest time in 31 years to buy RE

3 years 7 months ago

Nice graph. A +40% SD like drop could be a tall order, but I would not be surprised if our race to the bottom will be faster. Let’s not forget that the US housing bust came out of left field in early 2006 with a stable economy and gathered steam despite falling rates. With warnings splashed all over magazine covers and financial publications, our bust is much more widely anticipated. That dramatic drop in int rates after the US financial disaster gave our market a last gasp since 2009. Those rates now look poised to start climbing again. Asian and… Read more »

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Guest

3 years 7 months ago

40% still leaves us miles above fundamentals.

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jesse

3 years 7 months ago

So don’t get me wrong, I LOVE the comparison to San Diego, however we should keep things in perspective. If we align Case-Shiller data from San Diego against Vancouver, San Diego saw significantly faster run-ups than did Vancouver over the past decade. Further there was more home building in San Diego than Vancouver in general and that contributed to more supply overhang, and finally the second “leg” down coincided with the US recession and a crimping of their mortgage market. Another comparison that could be made is to San Francisco or Seattle/Portland, that never fell as brutally as did SD,… Read more »

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Bull! Bull! Bull!

3 years 7 months ago

i don’t really understand why this graph is significant. is there some reason why vancouver should track well against SD? if you have a data set you can find SOMETHING that it will correlate with. but it doesn’t mean anything.

the graph has value as a novelty or curiosity. it has no predictive power and doesn’t give us actionable information.

why not post real sales info instead? why don’t all of you try being friends with real estate agents instead of always trying to piss them off? maybe you’d get some real sales data passed your way as a result.

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mac

3 years 7 months ago

I want to thank B5Baxter for creating this graph. Thank you.

It really helps visualize where we are esp. as C/S data is comparable to Teranet’s data. Also it’s amazing to see that the FrankenHPI seems to indicate the same decline despite the multiple changes board made to how it’s calculated.

Even more amazing is the fact that not one local journalist bothers to come by this site, see this graph and become curious enough to do their own research.

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Anonymous

3 years 7 months ago

…40% still leaves us miles above fundamentals….

I agree! It’s going to take 70% to flush this turd of a bubble to Iona where it belongs.

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mac

3 years 7 months ago

Bull, Here are the crib notes for you. Go back and read what Baxter says, namely: “…some people feel that the bubble is “popping” very slowly here. But so far at least it seems to be following the same trend we saw in US cities that saw a 40% drop in prices.” Primary message: This graph shows the rate of decline here compared to the ultimate, and disastrous, decline in San Diego. But makes no prediction about the future. As we know the Teranet and HPI lines could flatten out at any time. However, spokespeople for real estate interests and… Read more »

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MadasHell

3 years 7 months ago

“If you commit terrorism, you should lose Canadian citizenship: Kenney”
Dahh!!! I think we need a new imm minister.

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Johnny_O

3 years 7 months ago

Hello everyone, it’s been a long time (2005/2006) since I’ve commented but I still watch some of the topics posted on this blog. Anyway, I’ve come across a few articles, see below, in the last few years that has only confirmed what I’ve always thought of what drove the buying frenzy in Vancouver in the last decade. I actually had a dinner concersation wirh a Colliers commercial sales rep A while back in 2010 where I suggested the US should do the same as Canada in terms of saving their housing collapse by allowing High net-worth asian investors buy housing… Read more »

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VHB

3 years 7 months ago

February days with sales<100

2011: two
2012: three
2013: two**

** (We're only 3 business days into the month…16 days to go…)

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LocustLand

3 years 7 months ago

Johnny_O Says

Agree 100% Johnny_O. And our esteemed Immigration Minister was prancing around the entire time wearing his little red housecoat – absoutley disgusting.

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Bull! Bull! Bull!

3 years 7 months ago

@mac

Thanks, I get it now. The take-away is that the decline in price is very slow. But the HOPE is that the slow decline will lead to fast decline as it did in other markets, so bears shouldn’t fret just yet. I have to admire the hopeful nature of the bears. Hoping for almost a decade while others have won the lottery and cashed out.

Keep hope alive bears! Don’t miss the bottom 😀

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gokou3

3 years 7 months ago

Re #22:

Ya, you bulls certainly won’t miss the bottom by holding.

— Cashed out in 2011.

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Anonymous

3 years 7 months ago

jesse: “the second “leg” down coincided with the US recession and a crimping of their mortgage market.”

Do you not think we will have a recession and a crimping of the mortgage market here after real estate prices in Canada take their first leg down? As things get worse we will see further tightening and we will see a massive loss of jobs. I don’t see how we can avoid a recession and there is no way lenders do not tighten if real estate is falling in value.

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VMD

3 years 7 months ago

Just did a big piece on 2013 RE predictions on a couple Chinese forums and for my RE column. Also submitted to “Epoch Times” newspaper where printing date is being arranged. Below is the brief English translation: Bullish Factors for Vancouver RE: 1. Chinese economy/stock market showing some sign of ‘recovery’ in early 2013. Some ‘HAM’ may ended up in Vancouver RE. 2. HST expires in April, good for new home market. 3. Interest rates remain at historical lows. (But also means can’t drop like 2008-09 again) 4. QE4 and coordinated monetary easing may offer short-term boost to stocks/economy. But… Read more »

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Very Little Gravitas Indeed

3 years 7 months ago

@#22

Hoping for almost a decade while others have won the lottery and cashed out.

So, your recommendation is to get out? One of us!

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VMD

3 years 7 months ago

@VMD
– meant to say 15 ‘Bearish’ factors for Vancouver RE, of course.
– hoping to get it published by this weekend, just in time for the “HAM” (if they exist) to read during their CNY dinner outings. (it’s a free newspaper distributed at the entrance of many Chinese restaurants)

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Anonymous

3 years 7 months ago

yep 2005/2006 and silly bears are still waiting…life isnt fun hiding behind the keyboard!

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VMD

3 years 7 months ago

Was just reminded re: the HST transition tax rules for new RE purchases. FYI: “For newly built homes where construction begins before April 1, 2013, but ownership and possession transfer after, purchasers will not pay the 7% provincial portion of the HST. Instead, purchasers will pay a transitional provincial tax of 2% on the full house price. ” -The temporary housing transition measures will be in place for two years, until March 31, 2015. -A new temporary housing transition tax of 2% will generally apply to purchasers of new homes where at least 10% of construction has begun before April… Read more »

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Best place on meth

3 years 7 months ago

China takes one tiny step toward being slightly less of a shithole:

http://news.yahoo.com/china-cleaning-illegal-black-jails-153155556.html

Only 100,000 steps to go.

Now if Canada could take a step of their own and stop admitting these disgusting thugs into our country that would be just swell.

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gokou3

3 years 7 months ago

“- Can someone enlighten me on how exactly a (potential) NDP government is bearish for RE? Thanks!”

Refer back to 1990s. BC economic performance went from best in Canada to worst. That’s really all you need to know.

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patriotz

3 years 7 months ago

” Hoping for almost a decade while others have won the lottery and cashed out. ”

Very good analogy as the wins of the few are necessarily exceeded by the losses of the many.

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mclovin

3 years 7 months ago

“yep 2005/2006 and silly bears are still waiting…life isnt fun hiding behind the keyboard!”

Actually some condo’s are back to 2007 prices and we are just getting started. Creep back in a few months.

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TPFKAA

3 years 7 months ago

@VMD: Those bearish factors are like 35 lb barbell plates stacked on an egg. Its really hard to see how bulls are going to escape from this.

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paulb

3 years 7 months ago

New Listings 267
Price Changes 63
Sold Listings 67
TI:14403

http://www.paulboenisch.com

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Groundhog

3 years 7 months ago

Yikes!!

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Larry Lou

3 years 7 months ago

Ole Larry over at Yatter does not matter, must be cranky as nothing is selling.. i have recently posted a few non offensive replies to his posts and he has not posted them. He also maintains that his mega listing estate house takes a minimum of 18-24 months to sell… lol if it was priced correctly it would have been sold a long time ago. 8.5 million for a creaky old tear down….keep dreaming Larry

might as well up the price to 8.888,888 and pray

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Oh Oh

3 years 7 months ago

Looks like 15 K party in Feb- 16K party in March 20K by June

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Dumbest time in 31 years to buy RE

3 years 7 months ago

This Feb will blow out the record for minus 100 listings days!

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mclovin

3 years 7 months ago

Another great day!

How many more data points do people need to see this market is cooked!

How many Realtors are going to be telling their clients, drop your price or I’m dropping the listing? These guys will not keep putting good money after bad if the listings are priced too high to move.

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mclovin

3 years 7 months ago

From Garth’s site Fraser Valley Real Estate Board is reporting sales are up compared to last year, so I did some checking on the boards own data base. This is what I found: Sales of Single Family Homes: Jan.1 – Feb. 6th 2012= 714 Jan.1 – Feb. 6th 2013= 264 (A drop of 63%) Sales of Attached Units: Jan.1 – Feb. 6th 2012= 525 Jan.1 – Feb. 6th 2013= 209(A drop of 60%) Total Single Family Homes + Attached: Jan.1 – Feb. 6th 2012= 1239 Jan.1 – Feb. 6th 2013= 473 (A drop of 62%) ==================================== These sales declines are… Read more »

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Buffates

3 years 7 months ago

We’ll have a shot at 16K this month for sure

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canadian

3 years 7 months ago

Mclovin, that doesnt make sense, as much as I wud want it to be true. Jan nos came 23% lower and no way in hell, feb nos can be that bad to cause that kinda drop. Looking at chipman’site, the no for feb r bad but nowhere close to that bad.

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VHB

3 years 7 months ago

Total days	19
Days elapsed so far	4
Weekends / holidays	2
Days missing	0
Days remaining	15
7 Day Moving Average: Sales	78
7 Day Moving Average: Listings	269
SALES	
Sales so far	334
Projection for rest of month (using 7day MA)	1176
Projected month end total	1510
NEW LISTINGS	
Listings so far	1180
Projection for rest of month (using 7day MA)	4032
Projected month end total	5212
Sell-list so far	28.3%
Projected month-end sell-list	29.0%
MONTHS OF INVENTORY	
Inventory as of Feb 6th, 2013	14403
MoI at this sales pace	9.54

Criminy. If the sales don’t pick up soon, February 2013 is at risk of falling under February 2009 numbers.

Have a shot at 16K by the end of February.

year sell list sell/list
2002 3008 4035 74.5%
2003 2760 3621 76.2%
2004 3066 3944 77.7%
2005 3068 4115 74.6%
2006 2941 4340 67.8%
2007 2859 4167 68.6%
2008 2676 5260 50.9%
2009 1480 3916 37.8%
2010 2473 4606 53.7%
2011 3097 5693 54.4%
2012 2545 5552 45.8%
Mean 2725 4477 60.9%
median 2859 4167 68.6%

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mclovin

3 years 7 months ago

Canadian I didn’t verify them. I just copied the post from Garth’s site.

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Democrass

3 years 7 months ago

Here are some sales from January 29, 2013, as posted at Real Estate Talks:

214-2250 Wesbrook Mall
Leasehold strata
List 749
Reduced 698k,668k
Sold 618k
Assessed 667k

1221 W 41 ave
Big 8126 sq ft lot
List 1,688k
Sold 1,635k
Assessed 1,724k

56 W king Ed ave
Nice 4600 sq ft home on 7500 sq ft lot
List 1,980k
Sold 1,930k
Assessed 2,243k

2837 w 43 ave
List 2,298k
Sold 1,975k
Assessed 2,088k

2005-1067 w Cordova st
1 bdr 900 sq ft at Shaw towers
List 749k
Reduced 738k
Sold 700k
Assessed 755k

1101-2020 Highbury st
List 1,575k
Sold 1,292k
Assessed 1,394k

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Bear! Bear! Bear!

3 years 7 months ago

Equity in the rear view mirror may appear larger than it is….

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Anonymous

3 years 7 months ago

Canadian should be capitalized. Show some respect to Canada.

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jesse

3 years 7 months ago

Jikes is right, CNY is in four days, VMD has indicated sales will bounce mildly the last week of the month.

If things don’t improve my 99 daily sales prediction is going to look mighty silly!

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specuskeptic

3 years 7 months ago

Gettin’ that 2008 feeling – looking at that graph, seeing these numbers. Never thought it possible to have data even approach that but here we are. Waaay too early for a victory dance IMVHO but I am cautiously optimistic that we are at the cusp. A fun yet disturbing thought exercise to play would be to imagine what policy shift could fuck this up… We had various iterations of QE and low interest rates and that space for adjustment is now gone. It really is hard not to believe that, this time, it’s real. To quote Rummy, “There are known… Read more »

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Vancouver Condo Info

Vancouver house prices ‘flat’ like San Diego

Bubble? What Bubble?