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
Member
3 years 1 month ago
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… Read more »
VMD
Member
3 years 1 month ago

@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).

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!
3 years 1 month ago

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

Quality Control
Guest
Quality Control
3 years 1 month ago

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

Q
Guest
Q
3 years 1 month ago
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… Read more »
patriotz
Member
3 years 1 month ago

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.

patriotz
Member
3 years 1 month ago
Pdub
Guest
Pdub
3 years 1 month ago

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

painted turtle
Guest
painted turtle
3 years 1 month ago
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… Read more »
Short'em High
Guest
Short'em High
3 years 1 month ago

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.

painted turtle
Guest
painted turtle
3 years 1 month ago
Many Franks
Guest
Many Franks
3 years 1 month ago
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… Read more »
Bull! Bull! Bull!
Guest
Bull! Bull! Bull!
3 years 1 month ago
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… Read more »
Troll
Guest
Troll
3 years 1 month ago

@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?

VultureBoy
Guest
VultureBoy
3 years 1 month ago

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.

VultureBoy
Guest
VultureBoy
3 years 1 month ago

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.

Anonymous1
Guest
Anonymous1
3 years 1 month ago

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.

Many Franks
Guest
Many Franks
3 years 1 month ago
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.… Read more »
Not much of a name...
Member
Not much of a name...
3 years 1 month ago

@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.

Yellow Helicopter
Guest
Yellow Helicopter
3 years 1 month ago
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… Read more »
Pdub
Guest
Pdub
3 years 1 month ago

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

bullwhip29
Guest
bullwhip29
3 years 1 month ago
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… Read more »
Not much of a name...
Member
Not much of a name...
3 years 1 month ago

@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.

An Observer
Guest
3 years 1 month ago

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

Ray
Member
Ray
3 years 1 month ago

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.

Democrass
Guest
Democrass
3 years 1 month ago

“wake me up when the average house starts falling in price”

Well, wake up. You slept in. HPI (which tracks the average house) has been falling for around 10 months.

Short'em High
Guest
Short'em High
3 years 1 month ago
@VultureBoy Says: “I don’t get the downvoting on short em high #10” The downvotes are from the same rabble of dunces that voted down my criticism yesterday of the peanut gallery posters who post pretty graphs but can’t be bothered to disclose their data. Ignorant people are very fearful of the scientific method. According to one poster, @VDTF, because I ask meaningful questions of the graph posters I have an “attitude”. Regarding my post, sorry for not explaining again and connecting the dots from the earlier postings in the thread. My post was in response to @YVR’s request using @VMD’s… Read more »
gokou3
Guest
gokou3
3 years 1 month ago

We are seeing pent-up demand… in the US. After the peak 6-7 years earlier.

Pdub
Guest
Pdub
3 years 1 month ago
Not Much #23 I am not an economist but I read enough of it to assume a good economist might take a multi-year average of sales, adjusted for things like changes in population and demography, to determine what demand should be. If demand is below that for a period it might be because buyers are holding off for some reason. Pent-up demand was a big factor in the surge in car sales in the US last year. Of course Cameron Muir is grasping at straws after barely a year of below average (for the past few years, not longterm) sales.… Read more »
Anonymous1
Guest
Anonymous1
3 years 1 month ago

Many Franks,

I got nothing against Ben Rabudoux. Garth took a shot at him saying he sometimes works for national Bank.

He’s good with stats. But he doesn’t (cant) include stats like offshore money laundering into Vancouver RE, 100,000’s of illegal immigrants in Canada, Almost a million temp workers and students not counted in census population stats, construction industry money laundering.

That’s why I take his analysis lightly.

Brian
Guest
3 years 1 month ago

Pent up demand? You can still rent. With all the condos coming out that are tiny, only investors have been buying for some time now. And investors are already stretched to the max trying to pay off the current mortgages of their investment condos/homes.

RaggedyRenter
Member
RaggedyRenter
3 years 1 month ago

Are there pent up demand? sure there are. Almost all of us here can be classified as pent up demand. But as long as the demand side thinks the price will continue to fall, they will be pent up for quite a while. Thus the deadly spiral of house price deflation.

Best place on meth
Guest
Best place on meth
3 years 1 month ago

I think what Muir meant to say is that there’s a lot of pent up anger, from sellers who can’t sell, realtors who can’t get a commission and the cartel who keeps denying there was ever a bubble.

This pent up anger should eventually explode into full blown rage followed by crying in a fetal position.

Many Franks
Guest
Many Franks
3 years 1 month ago

Lots of great pieces in the news today. From the CBC:
Falling Vancouver real estate drags down Canadian average

If sales from the Greater Vancouver area aren’t included, the average Canadian home price would have shown an increase of 1.3 per cent during February, compared to a year ago.

The pattern of CREA reports saying “ignore Vancouver, they’re nuts over there” continues apace.

Not much of a name...
Member
Not much of a name...
3 years 1 month ago

@Many Franks…

So if you exclude Vancouver then how can it be a Canadian average?

No Condo
Member
No Condo
3 years 1 month ago

http://www.news1130.com/2013/03/15/former-pm-among-13-taking-local-re-developers-to-court/?cid=dlvr.it

VANCOUVER (NEWS1130) – Former Prime Minister Kim Campbell and 12 others are taking the re-developers of a Vancouver landmark to court.

The complaint involves pre-sale condos at the Hotel Georgia.

CanNeverThinkOfAGoodName
Guest
CanNeverThinkOfAGoodName
3 years 1 month ago

Look what you can get for 1 million dollars in New York: http://www.coldwarmissilesilo.com/index.htm

Turkey
Guest
Turkey
3 years 1 month ago

@anonymous1,

[Ben Rabidoux is] good with stats. But he doesn’t (cant) include stats like [discussed to death and not enough to move the market on its own], [irrelevant and smacks of bigotry], [irrelevant and smacks of bigotry], [irrelevant and probably also bigoted], and [red herring].

Yup, that’s exactly what I like about Ben’s writing. And you are…?

Turkey
Guest
Turkey
3 years 1 month ago

My kingdom for a preview button!

@anonymous1,

[Ben Rabidoux is] good with stats. But he doesn’t (cant) include stats like [discussed to death and not enough to move the market on its own], [irrelevant and smacks of bigotry], [irrelevant and smacks of bigotry], [irrelevant and probably also bigoted], and [red herring].

Yup, that’s exactly what I like about Ben’s writing. And you are…?

@bullwhip29
Guest
@bullwhip29
3 years 1 month ago

she also says that vancouver is down for a year, victoria is down the past 4 years, bc is bucking new home sales price increase. it is “insanely expensive” on the west coast and the high prices are “unsustainable”.

so, are you saying that this was a ‘bullish’ story?

b5baxter
Member
3 years 1 month ago

A quick snapshot of inventory trends.
Average daily increase in inventory for the last 7 days: 59
For the same period last year: 51
And last week: 49

Burbs Boy
Guest
Burbs Boy
3 years 1 month ago
There is no value at all in talking about “pent up demand” or “pent up supply”. To paraphrase Patriotz (correctly I hope, or I am sure I will be hearing from him :)..) “there is ALWAYS a buyer at some point as the price drops”. And that is true usually (except Detriot strangely). And conversely you could say that there is always pent up demand to sell if prices go high enough. If someone is crazy enough to offer you $2.5 Million for your $250,000 shack… well you just might be tempted to put it on the market and sell.… Read more »
VHB
Member
VHB
3 years 1 month ago

I’m seeing big increases in New West, North Van, Burnaby SFH listings. Historical highs for this time of year. VW has stalled out; VE puttering along. Condos downtown nothing special on the inventory side. I don’t know what all that means except that our little crashlet is *not* a “Van has too many condos; it’s just condos; houses are safe from all this” thing. It is in fact inventory growth and sales declines are mostly a SFH thing, from what I see.

bullwhip29
Guest
bullwhip29
3 years 1 month ago
@ #40 I think you missed my point entirely (while most others here seemed to grasp the idea pretty quickly). Yes, the #’s in Vanc and Vic were DOWN, but graph #2 does a very poor job of illustrating that (perhaps by design). A casual bystander could very easily glance at this and conclude the BC markets were UP, but not by as much as Wpg or the Cdn average. I think her suggestion that the market has reversed course given the minor 0.1% twitch up in the HPI is beyond farcical. By failing to include 2012 in graph #1,… Read more »
HFHC
Guest
HFHC
3 years 1 month ago

@ bullwhip29 –

Funny you mention Steve Darling, my wife walked through an open house and he was the one leading the open house. He just had a friend realtor list it and he is doing the work he said.

mac
Member
mac
3 years 1 month ago

Garth giveth and taketh away. Praising Ben Rabidoux and sticking the boot in at the same time. That’s Turner-style Klass all the way.

bullwhip29
Guest
bullwhip29
3 years 1 month ago

@ HFHC

If that’s true, I wonder whose house it is?

VMD
Member
3 years 1 month ago

Recent rounds of mortgage tightening:
Feb 16, 2010 (implemented Apr 19).
Jan 17, 2011 (implemented Mar 18).
Jun 21, 2012 (implemented Jul 9) (OSFI portion implemented Nov 1)
OSFI stated it will unveil new mortgage insurer rules (that will negatively affect RE market) by “early 2013”

I wouldn’t be surprised if new OSFI insurer rules are announced near Budget date next week.
Heaven forbid, Flaherty might even be pissed enough at the banks (and the still-rising household debt) to announce new mortgage tightening rules,

VMD
Member
3 years 1 month ago

Speaking of Flaherty,
G&M: Flaherty, take note: Hong Kong tackles real estate bubble‎
For those who have subscription or can get around pay wall, might be an interesting read.

Village Whisperer
Member
Village Whisperer
3 years 1 month ago

#35 @not much of a name It’s a figure that comes from Economists who probably also tell you that if you take out the top 25 people in their University Economics Program, they were top of their class.

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