Realtors not hungry

RFM has updated the Realtor Hunger Index over at VancouverPeak.

The VANCOUVER REALTOR HUNGER INDEX is the percent of realtors who earned no commission income for the stated month. For August 2015 the VRHI was 49%. How does this compare? The 18-year average for August is 50%. At 49%, the 2015 August VRHI was higher than 8 years and lower than 9 years since 1998.

Despite turmoil in the speculative equity markets, an ‘official’ recession in Canada, oil prices that are plumbing the bottom of the barrel, foreign money-laundering investigations by the Canada Revenue Agency, corrupt politicians, greedy realtors, rapacious real estate marketing firms and a plethora of other factors that should cause a collapse of the Vancouver housing bubble, continued lower-than-average inventory and strong demand forced already high prices higher, especially in single family homes, where the HPI increased a whopping 17.5% from August 2014 to $1,159,600. Endlessly-low interest rates (and clueless BOC leadership), a flood of foreign investment money and knee-jerk buying by uninformed and delusional buyers, the August sales rate is extraordinary! And unsustainable. My official opinion of all this is available 24/7/365 for US$0.05! Call now! Operators standing by! However, for a more detailed and scientific analysis of the market dynamics of this firestorm, consult the DSM-5! (The Diagnostic and Statistical Manual of Mental Disorders (DSM-5), published by the American Psychiatric Association, offers a common language and standard criteria for the classification of mental disorders.)

Details and comparison data for 18 years at: http://vancouverpeak.com/showthread.php?tid=64

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Ulsterman
Member

Whistler or bust?

Come on now, comparing a total lucky shot if you invested in a company that gets a 100% takeover premium to the market-wide 200-300% return on a 20-1 leveraged investment? Cherry picking at little?

“I wonder how long till SFH in Van go up 110%? I’m sure you’ll tell us 3 years.” No but then no one predicted a 17% YOY price surge either, coming at what any regular person would have considered a total peak. 17%! After THAT totally insane increase from an incredibly insane peak, how can you credibly claim that it won’t continue in even high single digits? Why not? It’s already defied your logic for a decade. I’d take my chances on Vancouver housing than your individual stock picking ability – with all due respect, I may add.

patriotz
Member

The great global house price quiz: can you guess these property values?

Unfortunately they don’t say what the properties would rent for, so you can’t do a bubble comparison.

Westside Realtor
Guest
Westside Realtor

Buy a place for say $1.5mm.

Tear it down, spend $1mm building new.

Sell it for $2.75mm.

All that shows up in the stats is the purchase price and the sale price.

Doesn’t capture the cost to build the new structure.

Price jump is bullshit, given all the redevelopment.

People are stupid, and learn the hard way. Life teaches tough lessons.

Econ 101 lesson on its way.

WSR

George
Guest
George

Average price for a SFH in Greater Vancouver has hit $1.47 meanwhile…is that a typo in the article? Or is the AVERAGE really a cool million and a half? Vancity says it will hit $2 million by 2030–I seriously doubt we have to wait that long.

http://www.theglobeandmail.com/report-on-business/economy/housing/the-real-estate-beat/vancouver-house-prices-jump-20-per-cent-to-average-147-million/article26197722/

George
Guest
George

Meanwhile, Metro Vancouver office space just hit an 11-year high. What a joke this economy is.

http://www.cbc.ca/news/canada/british-columbia/office-vacancy-rate-2015-1.3212766

w
Guest
w

@19

People eating video @ 2:39

“I took advantage of this space between morality and law…” Sounds familiar. They can use this line of thinking to justify anything it seems.

Apita
Member
Apita

@28
You seriously is a realtor with basic knowledge in construction cost? With a budget of 1m you are building on a minimum 50 ft frontage lot, and a new house on it will sell for minimum 3.5m in the westside!

Westside Realtor
Guest
Westside Realtor

Apita,

Simply a simple example of how either renovation or new construction costs are not factored into the change in selling prices that the msm bandies about.

Anyways, to each his own.

WSR

Apita
Member
Apita

WSR,

Just wanted to point out your mistake. You indicated:

Buy a place for say $1.5mm.
Tear it down, spend $1mm building new.
Sell it for $2.75mm.

In reality, if you can get a 33×122 lot for 1.5m, your building cost will likely cost under 700k and the end product can easily sell for 2.8m. If you pay 1m in cash and finance the rest, that’s a 50% or 500k profit over a period of 12-15 months.

elvince
Guest
elvince

@Apita: I don’t think you understand. His point is that if you buy a lot for 1.5m, build for 700k and sell for 2.8m, then the data reported is that you bought for 1.5m and sold for 2.8m, with no word about the 700k you spend.

You effectively made 500k profit, but the reported profit in realtors database is 1.3m. Actually, there’s no reported profit, just 2 price points for a given address.

You could use x, y and z instead of numbers if you’re still confused. Point still stand.

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

WSR, you are right, that is a factor in these price calculations, but how much of a factor? well, it’s debatable.

the reason: “The benchmark price for a detached property in Metro Vancouver increased 17.5 per cent from August 2014 to $1,159,600.”

the benchmark price is up 17.5%, and it compares like to like. so it won’t be affected by the example you give. so i think the statement that prices have gone up 20% is practically speaking correct.

also, i’m not going to entertain any criticism of the HPI. anyone who has watched the market should know by now that it accurately reflects reality despite the irrational assertion from the lunatic fringe that it’s manipulated.

realist
Member
realist

“Almost half of homes in New York and D.C. are now losing value”
courtesy of Bloomberg:

http://finance.yahoo.com/news/almost-half-homes-york-d-120003800.html

“A steady rise in U.S. home prices since the bottom of the market combined with weak income growth has made housing less affordable, especially in big cities. Credit remains tight and demand is now being driven primarily by buyers dependent on mortgages, as foreign buyers and investors pull back from the market.”

“”What happens in any bull asset bubble such as what we’ve seen is you run out of buyers,” said Chris Whalen, senior managing director at Kroll Bond Rating Agency Inc. and an advisor to Weiss (co-founder of the Case-Shiller home price indexes). “It’s hard to get deals done if the bottom third can’t get a mortgage.””

space889
Guest
space889

@Whistler or bust? – And absolutely in way being influenced by the 0% interest rate policy run by all the major cnetral banks in the world? The same force that’s propelling all assets including Van RE to bubble level pricing?

As for the deal itself, lucky for the shareholders, but can you realistically say this is the norm? Or that you can replicate this year in year out? If you can, then I don’t think Van RE price would be a worry for you since you would be the world’s best M&A arbitrage hedge fund manager making tens or hundreds million a year.

Please don’t confuse luck with skill, or the stupidity of Ontario’s Teacher’s Pension Fund with your superior investing skills.

Confucius
Guest
Confucius

“New listings for detached, attached and apartment properties in Greater Vancouver totalled 4,281 in August, up 8.7 per cent over August 2014”

http://www.vancouversun.com/business/metro+vancouver+detached+home+prices+rise+proportion+diminishes/11336238/story.html?__lsa=b146-2f2f

New listings are rising, but the sales pace has hidden this and kept total inventory low. Can sales continue at record breaking levels? Yatter mentioned that total inventory is the lowest for this time of year since 2007. Could we be in for another shock? Place your bets.

Tiger
Guest
Tiger
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