FFFA! Price Drops along the coast.

Well it’s the end of another work week, and you know what that means?

That means it’s time for our regular end of the week news round-up and open topic discussion thread for the weekend.

Here are a few recent links to kick off the chat:

–Sales decline helps fuel price drops
–Updated inventory graph
–Average BC price down 8.1% YOY
–Sell my imaginary house!
–What about the sunshine coast?
–Poll: Most trustworthy expert?
–The grim news
–

So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!

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yvr2zrh

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Click to flag and open «Comment Reporting» form. You can choose reporting category and send message to website administrator. Admins may or may not choose to remove the comment or block the author. And please don't worry, your report will be anonymous.

To the blog – – I have a small request. Would one of you go back and try to plot the number of detached sales for Van-West and Van-East on a month by month basis for the past years (I would say back to Jan 2007 if you can. It may require some manual lookups. I just want to be able to see what the normal trend is because this month we have a massive divergence. Really quiite odd. Perhaps we are seeing the impacts of “Modest” CNY impacts on Van-West while Van-East collapses – – This month we are going to likely end up with almost 2:1 (I am projecting 150 v. 88 for West/East respectively). Have we ever had 70% more Van-West than Van-East? Thanks in advance – I’m going to be travelling the next 10 days. We… Read more »

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VMD

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@yvr2zrh
I happen to track this data, though only continuously since Aug 2010.
All data were manually entered.
Here is the spreadsheet link https://docs.google.com/spreadsheet/ccc?key=0AgcmnQtlQnGodHJHRGl4X3NKZklCeXY1Z3dpdHRNYnc&usp=sharing

The missing data in the table can be found in my collection of REBGV month-end reports: http://greaterfoolvancouver.blogspot.ca/2011/10/2011-rebgv-stats-pdf.html

I’ll be quite busy this weekend, so hopefully someone can help fill in the gaps and plot the existing data into overlapping line graphs (organized by year).

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Bull! Bull! Bull!

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So far 100% of the comments on the blog are good and high quality. Lets keep it up. Happy Friday

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Quality Control

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So far 75% of the comments on the blog are good and high quality. Still pretty good. Happy Friday

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Former Prime Minister Kim Campbell is attempting to back out of her condo purchase at the Hotel Georgia because the developer did not complete the project before the deadline promised. From CBC:

“In her statement of civil claim filed in B.C. Supreme Court Campbell says she paid a $368,000 deposit on a condo in the new residential high-rise at the Hotel Georgia in 2007.

Her lawyer Bryan Baynham says the pre-sale agreement with Georgia Properties Partnership was that that the condo would be finished December 2011.

“The project wasn’t finished on time. They were more than a year late and not surprisingly the people don’t want to complete and they want their deposit back.”

Campbell and the 12 other pre-sale buyers are suing Georgia Properties Partnership, Georgia Trust, Hotel Georgia Management Ltd and a numbered company to get their deposits back with interest.”

http://www.cbc.ca/news/canada/british-columbia/story/2013/03/15/bc-kim-campbell-hotel-georgia.html

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patriotz

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Former Prime Minister Kim Campbell is attempting to back out of her condo purchase at the Hotel Georgia because she can’t flip it for a profit. Her claimed justification for backing out is that the developer did not complete the project before the deadline promised.

More like it.

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patriotz

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CREA cuts forecast as home sales plunge in February

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Pdub

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I will write The Sun headline for that CREA report: BC to Outperform In 2013 Home Sales

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painted turtle

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Muir is good a picking numbers. Now making fuss about… average prices! (Who cares about those).

When all indicators (average, median, benchmark, HPI and Teranet) are heading South, he now talks about virtual buyers (‘pent up demand’). Has he done any survey about buyers’ psychology? Is he showing any population stats?

I am sure many virtual potential buyers are interested in buying computer simulated mansions. As for the flesh and bones buyers I know, they are so sick of this market that they will not jump in easily. It is not only the fear of a declining asset. It is also a visceral reaction against signing a cheque every month for 25 years to enrich a speculator or a greedy boomer.

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Short'em High

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http://postimage.org/image/426hpycpv/

West/East monthly sales stats 200701-201302
median = .94
mode = .57
average = 0.95
stdev = 0.25
min = 0.27
max = 1.48
2 sigma range = (0.45 to 1.45)
3 sigma range = (0.20 to 1.70)

Assuming normal distribution, the event that West/East >= 2.0 is unlikely by random chance. Where it occurs and persists, the underlying dynamics of the phenomenon must have fundamentally changed.

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painted turtle

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http://www.huffingtonpost.ca/2013/03/15/canada-housing-market-crea_n_2878386.html?utm_hp_ref=canada

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Many Franks

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And to top off all the grim news, Mark Carney has fresh egg on his face: Canadian Household Debt-to-Income Ratio Rises to Record 165% The ratio of Canadian household debt to disposable income rose to another record last quarter, calling into question Bank of Canada Governor Mark Carney’s assertion that families are listening to his warnings about the risks of borrowing too much. Credit-market debt such as mortgages rose to 165.0 percent of disposable income, compared with 164.7 percent in the prior three-month period, Statistics Canada said today in Ottawa. In his previous two policy statements, Carney weakened language about the need to raise the central bank’s 1 percent policy interest rate, partly on evidence a housing boom was slowing and consumer debt burdens are stabilizing. Finance Minister Jim Flaherty tightened mortgage rules in July on concern some regional housing… Read more »

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Bull! Bull! Bull!

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a look at the listings confirms what the numbers are telling you. east side is over priced relative to west side.

prices have declined a lot on the west side, but not the east. the west side premium was eroded.

how will equilibrium be re-established? considering the softness of the market, equilibrium will be re-established when prices decline on the east side.

it’s great to see the numbers to confirm these observations. but i feel that if people spent more time looking at listings on realtor.ca instead of arguing about economic theory, immigration, and dumping of diseased pig carcasses into some chinese river they’d have a better understanding of the market and maybe would FILTHY STINKING RICH by now 🙂

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Troll

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@short em high. Who makes a graph with time going right to left? Can you please be consistent with pretty much every other graph in the known world?

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VultureBoy

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I don’t get the downvoting on short em high #10. Maybe reverse the direction of the abscissa and give some more explanation and the post will be appreciated more.

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VultureBoy

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Short em high, I’m not sure about the assumption of a normal distribution with the mode so far from the both the median and mean.

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Anonymous1

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Could someone email me when the actual correction in prices starts??

Right now, all we have is low sales and high end price drops skewing the average price down..wake me up when the average house starts falling in price.

Thanks.

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Many Franks

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Jeez, Anonymous1, first you want us to email you, and now you want us to wake you up, and all we have to do on is the 1 at the end of your moniker? You’ve got more faith in us than you’re letting on. Ben Rabidoux has been talking about this for a while: The market has remained in balance so far because sellers who do not need to unload their houses are pulling their listings and some of those planning on listing are holding out, so inventory falls along with sales, said analyst Ben Rabidoux of M. Hanson Advisors. “But if there isn’t an uptick in sales again in the near term, then what you find is the people who have to sell become the new price setters,” he said. “When you see sales falling off, there’s often a… Read more »

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Not much of a name...

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@painted turtle #9

How does one quantify “pent up demand”? In my non-professional opinion, I don’t think it’s a case of pent up demand but rather that all the demand was pulled forward over the last few years. Much akin to “blowing one’s load”. It’s all over and done. Now it’s time to sit back with a cigarette and think about what was.

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Yellow Helicopter

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Hi Everyone, Happy Friday. Interesting news about the worst sales for March in 15 years… Investors Group (I know, I know,) came to my office for a lunchtime seminar a few days ago. (Talking TFSAs, how to reduce your taxes, etc,). Anyway, it was open to everyone, and there was over a hundred people there. Without giving away too much about where I work, there are a few administration types, and then mostly people with professional designations or MBAs / PHD’s. The presenter mentioned Vancouver’s Real Estate Bubble a few times, and said that everyone was talking about ‘how we are in a bubble.’ I scanned the audience each time, looking for shock or surprise, but everyone had a look of acceptance, like yes, of course we are overpriced. I don’t think that most people think things are going to… Read more »

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Pdub

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There is probably some “pent-up demand” out there. But nowhere near as much as there will be in 5 or 10 years.

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bullwhip29

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Global TV just ran two RE spots (within an hour of each other) on this morning’s news featuring Joannah Connolly, editor of the highly acclaimed BIV and holder of a BA in Eng Lit. Not surprisingly, the very eager to please “Mr. Mom”, Steve Darling, seemed more the willing to play along (as evidenced by his recent decision to use the same hairdresser as all the other female anchors). In segment one, she commented on the 0.1% rise in the Cdn new HPI (for Jan) and implied the housing market had “reversed a downtrend”. She also mentioned the Cdn$ and how “it rose five cents” yesterday. How sad. Colorful, animated bar graphs (a la CNBC) were used in the presentation to drive home the point that home prices are still way higher than they were in 2009. The year 2012… Read more »

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Not much of a name...

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@Pdub

But how can you quantify it? To me, it’s a sign of desperation when one needs to pull that out of one’s sleeve. You notice how “pent up supply” is never mentioned.

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An Observer

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The only pent up demand in this housing market is the pent up demand of sellers demanding their properties be sold. That of course leads to further price drops

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Ray

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Hot off the press March 14, 2013:

“Dan Scarrow, vice-president of corporate strategy for Macdonald Realty in Vancouver, said the area’s luxury-home market is “insanely hot”, with mainland Chinese the primary buyers.”

http://usa.chinadaily.com.cn/epaper/2013-03/14/content_16308167.htm

Meanwhile, March 23, 2011:

“The market for luxury homes is now “insanely hot,” with mainland Chinese buyers — who are also affecting the Richmond market in a big way — the primary purchasers, said Dan Scarrow, Macdonald Realty vice-president of corporate strategy.”

http://www.macrealty.com/blog/detail/luxury-real-estate-booming-in-vancouver-financial-post-article-quotes-dan-s

Apparently this is a #reporterfail.