February 2013: The ‘underwater’ point.

Looks like statistics from last month are starting to show up now.

Over at the Vancouver Sun they’re leading with the headline stat that YOY sales are down almost 30%.

The REBGV Home Price Index (HPI) is now down 5.6%, which Aleksey points out means that people who bought last May with the minimum down payment are now ‘underwater’ on their mortgages.

It’s been quite a while since we’ve seen this happen, but we’re now at a point where a small number of recent Vancouver home buyers owe more for their property than their property is worth on the market.

How long till we see the term ‘underwater’ or ‘upside down’ when it comes to Vancouver mortgage holders in the news?

With sales and prices down, REBGV president Eugene Klein did find one market indicator that is up: Realtor anecdotes of visitors to open houses.

Sales in February followed recent trends and were below seasonal averages, though our members tell us they saw more traffic at open houses last month compared to the previous six to eight months.

Somebody should tell the Vancouver Observer so they can correct this article again: What does it mean when nobody shows up to an open house in Vancouver?

“Well, this is a bit odd.” The Realtor checks his phone again, but it’s not saying anything new.

It’s been an hour, and nobody has shown up to the open house. We’re standing on the ground floor of a townhouse.

The Downtown East Side, but it’s silent except for CBC Radio 3: classical music plays quietly from tiny, beautiful speakers that can probably only play classical music. Top-40 would cause them to implode.

The Realtor walks out the door, across the long, wide patio, to the front gate of the courtyard. He’s making sure his phone number is correct on the open-house announcement. It is.

A bright, sunny Saturday in Vancouver. Just after lunch, and there’s nobody here but us.

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eagle eyes
Guest
eagle eyes

Bob Rennie is offering first 500 realtors $500 gift cards to metrotown to view his new offering of Wall Center in Burnaby. So Rennie buys 500+ people lining up for his project for $50,000, which is tax deductible. I wonder if the media will be there to report the high demand for condos. Or maybe inadvertently, these realtors will be mistaken for asian buyers from China camping out to purchase units for Chinese New Years.

Crikey
Guest
Crikey

@eagle eyes:
Do you mean $100 per realtor, such that 500 realtors = $50,000 ?

HappyRenter
Guest
HappyRenter

In theory one can deposit over 12 million dollars in cash in one year into his/her bank accounts. If one has one account in each of five big banks, he/she can deposit $9999 in each every business day without being reported. If you add credit unions to that the amount becomes really big. Of course, nobody does this; but, I think, a family of four can deposit a million in cash in the bank in a year without being noticed.

Patsan
Guest
Patsan

Hunger in Canada:
http://www.vancouversun.com/health/Wealthy+Canada+better+poorest+citizens+report+says+with/8042863/story.html

“Nowhere is that failure more evident than in Metro Vancouver, with its plethora of food banks, waste food diversion programs, soup kitchens and school-based inner city meal programs…”

“The number of households in Canada that are unable to meet their food needs every day is rising, from 7.7 per cent in 2007-08 to 8.2 per cent (1.1 million households) in 2011, according to the federal government’s own figures”

Q
Guest
Q
I just finished reading the comments yesterday’s thread and I want to say two things. First, I agree 110% with real_professional in post #86. Absolutely, not just people, but along with them jobs and economic activity are moving east within the Lower Mainland out towards the Fraser Valley, in Surrey, Langley, Abbotsford, Chilliwack. There is actually a great deal of truth to Surrey’s slogan, “The Future Lives Here”. Vancouver is being transformed into some bizarre real estate green living playground with diminishing fundamental basis to its economy besides real estate. The real economy (factories, production, economic activity that is not real estate connected) is moving east toward the Fraser Valley. These statements could be used by a real estate pumper pushing real estate in the Valley–that is not my intention. I am just talking about an urban/economic/geographic trend I see… Read more »
Q
Guest
Q
The second thing I want to say is in response to yesterday’s discussion is regarding Chinese nationals bringing large sums of undisclosed cash into YVR airport. I agree with mac that this money absolutely is coming here to be laundered and some of it does find its way into real estate. Mac offered some methods of ways people can do this. Mac’s methods may work or may need some tweeking. But I am a little bit shocked how many bears seemed to think this money is not being laundered and is not going into real estate. Why else are these people showing up at our airport with these huge sums of cash if it is not money laundering? Sure some of it goes into real estate. Some of it probably goes into other assets and investments. There are infinite ways… Read more »
Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

This is the crash? Van west has already hit bottom ( MOM price increases ).

Tell me bears, was it worth the wait?

Short'em High
Guest
Short'em High

@Bull! Bull! Bull! Says: “This is the crash?”

2 sigma tail even listing day on Monday, ‘326’. Are sellers thinking capture profit or keep shirt? Will today’s listing number be higher or lower? Let’s see… Maybe today, maybe next week… Keep spinning the barrel and see if there’s a bullet in the chamber. Fun, eh Bull?

http://nordhaus.econ.yale.edu/documents/statisticsoftailevents.pdf

When a driver sends his car off the cliff, what will he do in those last moments? Does he try shifting gears or turning the steering wheel? No. Probably he’s pushing on the brake until it bends for all the good it will do. Wheels are no longer touching the ground… Bu-Bye

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

>2 sigma tail even listing day on Monday, ’326′.

speak english. no one is impressed with your bull shitting.

and i’m not sure why you are bringing up 326 listings. as EVERYONE ( real estate 101 ) knows, listings that expired the previous month are re-listed at the start of the next month.

since you already know this, care to explain to a dumb old bull why you’re mentioning 326 listings?

Wait. I'm confused.
Guest
Wait. I'm confused.

I thought that real estate 101 dictates that sellers will pull their listing if they can’t get their price. Now you are telling me that lots of them are re-listing and that everyone know this? Man, where have I been?

Anonymous
Guest
Anonymous
“It’s been quite a while since we’ve seen this happen, but we’re now at a point where a small number of recent Vancouver home buyers owe more for their property than their property is worth on the market.” Lets not forget PPT was paid, legal fees, CMHC insurance on top of the purchase price which are all likely rolled in to the financing. And then the realtor fees to sell. Anyone who has bought over the last couple of years with 5% down is way underwater and essentially stuck. We are going to see a lot of families being raised in 500 square foot condos. 400K condo with 380K mortgage PPT 6K Legal 1K CMHC 10.5K Realtor Commission 16K Amount paid over rent 6K That person who bought a year ago would lose the 20K down plus have to throw… Read more »
Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

>I thought that real estate 101 dictates that sellers will pull their listing if they can’t get their price.

what in god’s name are you blathering on about?

Harry Wang
Guest
Harry Wang

Did the local media report the real estate numbers last night on the 6 o’clock news? I don’t remember seeing any reports.

mac
Member
mac

Q!

Welcome to the forum. You make lots of sense. I also agreed yesterday that high prices will continue to move East over the long term. What else could they do? Move West? But I never thought about your playground idea moving West. That is truly frightening. Imagine the Niceification (as in Nice, France) of Vancouver. Why not?

Carioca Canuck
Guest
Carioca Canuck

#2 Happy Renter………..

That technique is called “smurfing” in money laundering parlance, and the banks have software, not to mention trained staff, who will detect the patterns, and report you accordingly.

The $10K limit is just a trigger point for the completeion of FINTRAC forms………repeated cash deposits of just $5K a day will get your account looked at pretty fast.

mac
Member
mac

Whoops. Nice is a dump. Make that Monaco. The Monaco-ification of Vancouver. Sad.

Groundhog
Guest
Groundhog

I thought Vancouver was being Manhattenized? now it’s being Manacofied?

It will be a big relief when the day comes that 90% of dinner conversations don’t at some point turn to real estate and when Vancouver can once again be known as Vancouver.

Mike Stewart
Guest
Mike Stewart

Eagle eyes,

There is no project by Wall Financial in Burnaby. The one by boundary and banned is still in Vancouver.

Talk to a experienced realtor for more info and the right info.

Anonymous
Guest
Anonymous

“Tell me bears, was it worth the wait?”

of course, bears will wait. they have all the time in the world to waste. think about it, how many countless years they have spent their time in these kinda blogs?

remember all the arm-chair economists here keep saying interest rates have nowhere but up. guess what, 5 years fixed dropped to 2.85%.

try to enjoy your lives in the best place on earth, silly bears.

Mike Stewart
Guest
Mike Stewart

Haha make that boundary and vanness!!! Auto corrections fault!!

Troll Feeder
Guest
Troll Feeder

Wow! Lots of hungry trolls today. Looking forward to seeing the numbers tonight 😀

ArthurFonzarelli
Guest
ArthurFonzarelli

24 Hours “News” Magazine had an article on p. 3 entitled “Metro Vancouver home sales, prices plummet”. Google it. The most interesting thing about the article: not one talking head to discount the evidence of hard data, no anecdotes about busy open houses, no month-over-month trends… just the cold, hard facts.

Imagine all the confused people on Skytrain this morning reading this: “I thought sales and prices were going back up!! REBGV and CREA said so!”

I think that a few of you intrepid analysts should do like the Fraser Institute did several months ago: offer a free seminar for reporters on how to understand real estate research and statistics. Give them the tools to counter the pumpers’ bullshit.

Democrass
Guest
Democrass

“try to enjoy your lives in the best place on earth”

How? It rains all the time.

Vote Down The Facts
Guest
Vote Down The Facts

“How? It rains all the time.”

Troll?

patriotz
Member

“like the Fraser Institute did several months ago: offer a free seminar for reporters on how to understand real estate research and statistics.”

Has the FI ever called a RE bubble in Vancouver or anywhere else? If not, why should they be taken seriously about anything to do with RE?

Here’s what they were saying February 10, 2010:

Based on the frequency of reporting in the media, it seems that many people are increasingly worried that a housing bubble could develop in Canada.

“Could develop”? Please.

But do a Google and you’ll find that they have a lot to say about Canada’s “Medicare Bubble”.

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