Down is the new flat in Vancouver and Victoria

A ‘flat’ market sounds good right?

Not too up, not too down, but just right.

It means if you buy a condo now you won’t have to suffer the indignity of someone buying the unit upstairs from you for $100k less in the future.

So flat is comfortable and we’re starting to see that word a lot more these days.  This article uses it in the headline: Vancouver condo market stays flat.

So you might be surprised to read the following directly under that headline:

Although Vancouver has a reputation as one of the most expensive cities in North America for housing, condo prices stayed flat or even dropped last year, according to recently released assessment numbers.

That follows several years of the same pattern, which means overall condo prices are now seven to eight per cent lower in inflation-adjusted dollars than they were at the recent peak of the condo market in 2009, says one analyst.

Meanwhile in the capital city they’re using the same word: Flat forecast for Greater Victoria home prices.

And here’s what they say:

Although the number of homes sold for the past year rose by four per cent to 5,998 from 5,747 in 2012, the benchmark price for a single-family house slid by 3.2 per cent. That benchmark, representing a typical house, was $479,599 in December, down from $495,400 during the same month in 2012, the board said Thursday.

The benchmark price has dropped from three years ago when it was $515,500, the board said. And it’s lower than the $483,400 price recorded five years ago.

So here’s the cheat sheet:

Vancouver ‘flat’ = 7-8% drop over four years.

Victoria ‘flat’ = $35,901 drop over three years.

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UBC in crisis mode
Guest
UBC in crisis mode

Wow, no need to wait for the price drop, time to buy, buy, buy!

Loon
Guest
Loon

And debt is the new wealth dontchaknow.
How much a bank is willing to lend you is a measure of your success.

paulb
Member
Active Member

New Listings 306
Price Changes 77
Sold Listings 67

TI:11464

http://www.paulboenisch.com

Best place on meth
Member
Best place on meth

And we’re off!

Xyz
Guest
Xyz

Time for the annual laugh off…

Some may recall, I was booted from my last home because the landlord bought a 1.3 million dollar home on impulse…

Just did the bc assessment search, the property is now worth 1.207 mill. 93k haircut…. I told him he was nuts… But he did it anyway 🙂

everywhereyougo
Guest
everywhereyougo

anyone have the link to the BC assessment site?

Xyz
Guest
Xyz
Johnny-boy
Guest
Johnny-boy

Wow what a day for the bears! Where are you Paul?

Newcomer
Member
Newcomer

@ 7

Let me use “Let Me Google That For You” for you.
http://bit.ly/KxXmhR

Xyz
Guest
Xyz

@9

Yaya, iPad plus lazy.. Sue me

The point was made 🙂

Son of Ponzi
Guest
Son of Ponzi

Told you guys back in September:
This market is going down.

Softy
Guest
Softy

Good grief. Typical seasonal activity is nothing to get excited about.

Balda
Member
Balda

‘At least one politician believes lower property values could be beneficial economically.’

Ths is how the front page article of the local Okanagan newspapper (Morning Star) started at Friday. Pretty clear to everybody what’s going on here.

mls watch
Guest
mls watch

@ubc in crisis mode:
prices are dropping on Bowen Island. You can now get a nice home with a view for the price of a 2bdrm condo on campus. Find a dozen faculty and hire a water taxi to bring you all to work every morning 🙂
PS: I do not own property on Bowen Island.

jesse
Member

Five years at 2% inflation and flat prices is how much of a correction?

Best place on meth
Member
Best place on meth

@mls watch

Screw the water taxi, get yourself a jetpack.

http://upload.wikimedia.org/wikipedia/commons/6/67/Martin_Jetpack_Unveiling,_Liftoff!_%282714934801%29.jpg

Bowen to UBC in 10 minutes flat.

Dave
Member

Nobody buys a house in ‘real’ dollars. Everybody thinks and acts in nominal dollars.

If the bear case now hinges on that debate then we have come a long way…

Son of Ponzi
Guest
Son of Ponzi

The most important number from Paul B’s stats are the price reductions of 77.
It’s so early in the year, and so many sellers are already realizing that their asking prices are delusional, and are caving in.
Only the beginning!

Dave
Member

Ya only the beginning. We heard that in 2009, 2010, 2011, 2012, 2013 and now 2014. This time it’s different!

crikey
Guest
crikey
B-b-but the term “flat” is so innocuous and nicey nice! Pray tell why would the real estate industry *ever* want to steer the public wrong during a correction? Let’s see. The industry would tell you that at about a 1% decline over the last 5 years, the Victoria detached home market has been “flat”, right? So what about somebody that in 2008 bought a $500,000 place in Victoria with a big 20% down, but has to sell today (for one of many possible reasons: births, death, divorce, marriage, job transfer, job loss, retirement, etc, etc). Right off the bat, the minute the place was purchased in 2008 the person lost 1.5% of the value of the place due to property transfer taxes. OUCH! With inflation loss at about 2% annually, there goes another 10% lost over the last five years.… Read more »
Funkeymonkey
Member
Funkeymonkey

Crikey I think the only difference between us bears and bulls is bears know how to do math!
All us bears should pitch in to send some bulls to night school!

jesse
Member

My dad’s favourite story is getting a $300 scholarship and it covered his university tuition for a year. Old man can’t believe how much money’s value has eroded since then. Actually he believes it, he was getting monthly pay rises in the late 1970s because of double digit inflation. He thinks nominally all right. And so do his investments.

YVR
Guest
YVR

@19 “Ya only the beginning. We heard that in 2009, 2010, 2011, 2012, 2013 and now 2014. This time it’s different!”

Part correct. In 2009 there was a significant correction in the first half so that part will be the same. What is different this time is interest rates are already at rock bottom so there is nothing to stop the free fall.

patriotz
Member
Active Member

@20: “With inflation loss at about 2% annually, there goes another 10% lost over the last five years. OUCH!

The poor guy/gal/couple has also been financing a mortgage on 80% of the property for the last five years.”

If you’re going to count the decline in real price of the house, you also have to count the decline in the real balance of the mortgage.

Better not to try to adjust any one component for inflation and just calculate nominal return. You can then adjust the nominal return for inflation if you want. That’s the way it’s done for real investments.

RealityCheck
Guest
RealityCheck

Made another $17,000 overnite 🙂 Canada will not raise rates. They are going to sacrifice the loonie. Put your money where your mouth is.

This is in addition to the $14 K made a few weeks ago.

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