What’s going on with inventory?

At the beginning of the month we saw a sharp drop in inventory, moving away from a near record high to a more moderate level for the season.

There are still a lot of properties for sale in Vancouver, but not the crazy highs we saw in the spring after the month end flush.

B5baxter has updated his inventory chart over at VancouverPeak.com and it looks like the last week has seen most of those properties come back on the market.

So we’re at a lower inventory level, but there is a sharp recent increase.

Any theories on what’s going on with listings?  Looks like there was a similar jump in July 2006:

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Inefficient Market Hypothesis
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Inefficient Market Hypothesis

Why the listings are suddenly back? Answer: Because the summer slumber of delistings was abruptly interrupted by bonds bouncing up from what traders were counting on for a profitable retracement down.

http://www.marketwatch.com/investing/bond/10_year/charts

Losing money also makes traders look at their entire portfolio for sources of cash. Sources of cash like stupidly overpriced interest rate sensitive Canadian property.

http://www.usatoday.com/story/money/markets/2013/06/03/bond-funds-fall-in-may/2383819/

crabman
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crabman

Hopefully this recent increase is the long-awaited rush to the exits! Let’s just hope that Ottawa doesn’t stop it again, like they did in 2009.

Ralph Cramdown
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Ralph Cramdown

“Because the summer slumber of delistings was abruptly interrupted by bonds bouncing up from what traders were counting on for a profitable retracement down.”

You figure that many home owners are bond traders? More likely they’re hoping the interest rate bounce will shove some formerly ambivalent buyers off the fence.

Anonymous
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Anonymous

HST surge
Ebullient Liberal supporters
Randomness
Space aliens

Don’t over think it. Shit’s going down.

Burnabonian
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Burnabonian
^correct. Do not get lost in the noise. There are literally millions of variables. The important data points include: —-On the sentiment side—- -Inventory is extremely high and generally climbing, whether or not you normalize the curve to remove noise. -Houses are spending a very long time on the market, selling for far less than their original list or “goal” price -Local media is running cautionary articles (international media have for a long time of course) —-On the means side—- -CMHC management was just gutted in favour of people who know how to run a financial institution -Mortgages rules have been tightened and will be again -Rates are up and will keep rising We no longer have the public sentiment nor the ability to keep our bubble going. The only people still buying are those who haven’t heard the news.… Read more »
Molasses
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Molasses
Bull! Bull! Bull!
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Bull! Bull! Bull!

“…but there is a sharp recent increase.”

lol. you bears and your wishful thinking. every dark cloud has a silver lining for you, doesn’t it? but no matter how close you think you get to the pot of gold at the end of your rainbow it seems to just get further and further away from you.

i think it’s cute. don’t stop chasing rainbows vc.info. keep hope alive!

Anonymous
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Anonymous

At this rate (last business day only lol), inventory will go over 20k in no time! Lol

By the way, bond yields are down and are relatively stable the last 12 months.

Anonymous
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Anonymous

RE: Inventory

Way too much time is spent around here analysing inventory. Sure if there is a massive spike in inventory prices will correct quickly. But inventory does not necessarily have to be at record highs for prices to come down. One reason why we are seeing inventory coming down is because sellers are taking less for their properties in order to sell them. I follow the downtown condo market sale prices this year are easily 15% to 20% off peak. So prices are down 15% to 20% without a spike in inventory. For prices to go down another 10% per year over the next few years there is no need for inventory to increase. Prices are heading down anyway.

Burnabonian
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Burnabonian

^Agreed. Bears are grasping at straws and hallucinating.

The best way to prove it is to go buy some more condos with borrowed money and fudged loan applications. This will get you even richer even faster!

Why don’t you get up from the computer and get on that. Everyone here wishes that for you: both the bears and the bulls.

Take *everyone’s* advice: buy more real estate!

mosesupposes
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mosesupposes

I don’t get too worked up over the official inventory number. Sales have been brutal now for over a year. In this environment, I have no doubt that people are holding back listings.

I actually believe if we had a real sales spike for a week or two, inventory would shoot up as those standing on the side lines would jump back in. In fact this is how I expect price declines will accelerate – sales activity will generate listings which will come in at lower numbers based on recent lower sales prices.

Bull! Bull! Bull!
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Bull! Bull! Bull!

haha, bears are moving the goal posts again. when inventory is near all time highs, bears climb up a tree and yell “inventory is near all time highs! the end is near!”

when inventory is at normal levels bears say “inventory doesn’t really matter.”

thank you for the examples of bear logic. i should start a blog and call it bearlogicananecdotearchive.wordpress.com

Anonymous
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Anonymous

^— Pathetic trolls like #12 ruin The Pope’s blog. Pope has put hundreds of hours into this blog and the trolls are out to ruin it. That’s sad.

Vote the trolls down. Fast and hard. For The Pope

taylor192
Member

Fixed rates have ticked up from ~3% to ~3.5% and mortgage brokers are telling anyone interested in buying to get in now. I suspect we’ll see an uptick in sales for the next month until the pre-approvals at ~3% expire, then we’ll see a big decline in sales, especially if bonds rates keep going higher.

Ralph Cramdown
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Ralph Cramdown

If a non-cash buyer wants to buy and a seller wants to sell, the threat of impending rising rates is going to motivate both of them to do the deal sooner rather than later.

Interest Only
Member
Interest Only

I have noticed in my personal interactions that the lull in the market has made bulls cocky….as a result of the fact that the looming decline has not come in full force as of yet.

There is no upside yet they are cocky.

Very Little Gravitas Indeed
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Very Little Gravitas Indeed

@16: People remember 08/09 and think it will happen again.

Seafair Dweller
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Seafair Dweller

Killer whale family visits Vancouver! Maybe they are checking out the local real estate…

http://www.cbc.ca/news/canada/british-columbia/story/2013/06/14/bc-killer-whales-vancouver.html

Just kidding of course – the whales are actually on a local real estate company’s payroll. 😉

Makaya
Member
Makaya

Here is a public announcement made on facebook today showing the sad reality of the job market in Vancouver, and the consequences its starting to have on the real estate market…

“Here’s the deal: my husband needs a job. If he does not get a job soon we will be forced to sell our house and move – probably east. He has 4 degrees and 15 years of sales & marketing, finance and communications. He can do anything. He’s a smart guy, knows a lot of stuff and is also a GREAT guy. Please if anyone has any leads, send them our way.”

Nobody is forced to buy, but people do get forced to sell sometimes. And prices are set by those who manage to sell…

Makaya
Member
Makaya

PS: The person wrote at the end of her her annoucement: “feeling kinda desperate”.

The announcement is made public (anybody can see it) but I won’t post it here. Too many creepy trolls!

Interest Only
Member
Interest Only

Ouch that is sad – I wish them the best.

Barb Rennie
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Barb Rennie

It may be healthy for them to sell rather than hold on to some overpriced real estate in Vancouver. Things happen for a reason, and perhaps this couple moving east may be an opportunity to get out when the getting is good. “We may be forced to sell” – that statement seems like the writer feels that ownership is a right. How many people in the city rent and cannot afford to buy? It isn’t the saddest thing I have ever heard. Drama, drama, drama

elvince
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elvince

If he does not get a job soon we will be forced to sell our house and move – probably east

Yep, lots of fruits to pick in the okanagan valley.

Devore
Member
Devore

@Makaya They’re in good company. Just came from Montreal, lots of young BCers and Albertans working all over the place. Way more than last time I went, maybe 3 years ago.

Burnabonian
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Burnabonian

BC is like that friend you have who always has a new truck or jet ski despite only working part time at the bottle depot. He doesn’t know how poor he is.

Until one day he does.

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