Vancouver Condo Info

Hi gang, I’m back for a tour of the BPOE. Driving though Greenwood, BC (population 600, 30 listings) I noticed a For Sale sign in front of this house. This very same house was on sale for about $435K around 2007 as I noted in this forum (or Vance’s, can’t remember):

For Sale: $239,900
1897 Heritage home! If only the walls could talk! Original RCMP headquarters and definitely has B&B potential. 4 BDRMS, 2 baths. Modern renovated kitchen wit all amenities-stainless steel appliances & cord flooring. This home has so much to offer that you must see it!

Listing

Now do you remember back in the days when you talked about those ridiculous prices along Highway 3, you were granted with chants of “BC Bud!” (interior HAM)? What happened? Did everyone stop smoking? Well maybe all the RE buyers stopped smoking!

However maybe the RE industry is using stronger stuff, because a bit further west on Highway 3 I saw the following:

Regal Ridge

It reminded me of one of those ghost developments in Florida, apart from the elevation and weather. A great expanse of local streets (each with its own theme statue) and the odd house here and there.

Now that prices are cratering in the nearby Okanagan Valley, where they have things like shopping and hospitals and mild weather, who’s going to buy up there?

This post was submitted by patriotz.

Well, there’s a change in the air when it comes to Vancouver Real Estate.   The ‘can’t lose’ investment is starting to look like the ‘must lose’ investment with reports of buyers walking away from deposits and waiting for prices to keep dropping.

“It happened twice in the last month. One [deposit] was $75,000 and one was a $20,000 deposit, the guys just walked away from it,” said Mr. Arora, who runs Oneflatfee.ca in Surrey, B.C. “They are going to wait it out. So they lost $75,000 and $20,000, but if the market comes down $150,000 on a $1.5-million house, that’s not uncommon.”

Vancouver’s once-overheated housing market has cooled sharply, with the average price falling nearly 10 per cent in April from a year ago to $735,315, according to figures released Tuesday by the Canadian Real Estate Association. That was the largest drop since the recession and it marked the fourth decline in the past five months.

In a market once famous for being overheated, Mr. Arora said he hasn’t seen a bidding war in months. “It’s totally a buyers’ market. Buyers are determining the price,” he said. “And sellers are surprisingly accepting it. They are taking it.”

Buyers always determine the price.  If there are enough of them that want to pay more they will drive prices up.  Sellers have no control if no buyer is willing or able to pay the asking price.

This post was submitted by Farce.

The problem with using averages is they can look terrific on the way up and horrible on the way down.  Remember all that talk about the ‘average’ Vancouver house now being worth $1 million?  One year later it’s apparently worth $735,315.  What will it be worth next year?

The average home price in Canada in April was up 0.9 per cent from a year ago at $375,810.

“It bears repeating that the national average price was skewed higher last spring by record level high-end home sales in Vancouver’s priciest neighbourhoods, and that a replay of this phenomenon was not expected this year,” said Gregory Klump, CREA’s chief economist.

Sales in Canada’s largest markets are having opposite effects on the national average, with slowing sales in Vancouver dragging, and soaring sales and prices in Toronto exerting upward pressure.

The average selling price in Vancouver was down 9.8 per cent compared with a year ago at $735,315, while the average price in Toronto was up 8.4 per cent at $517,556.

Read the full article is in the Vancouver Sun.

This post was submitted by qwistar.

Looky here, the Province newspaper has discovered the price to rent ratio!

Take the house price and divide it by what it costs to rent for a year to get the price-to-rent ratio: Price divided by (Monthly rent x 12) = X.

(Estimates for additional costs of homeownership, such as taxes, maintenance and insurance are factored into the equation.)

If the number is higher than 15, it’s generally not a good time to buy.

If the ratio is less than 15, buying is a better deal than renting, if you plan on living there for at least five years to offset moving and closing costs.

By the time the number hits 20, renting is apparently the way to go, except if buyers expect to stay put for at least 15 years, according to a formula used by trulia.com to rank major urban U.S. centres every year.

B.C.’s numbers, as shown in the graphic, are through the roof, from 29 (Prince George) to 73 (West Vancouver).

Compare that to a few little housing markets like Manhattan (20) and San Francisco (17).  That ratio doesn’t mean house prices are <i>low</i> it just means that they’re more reasonably priced compared to rents.

Since you can’t take on a big loan to pay rent it tends to show how much a place is actully worth in terms of desirability and local economics.

This post was submitted by Scott.

A Bank of Montreal report is predicting that Vancouver house prices will continue to fall for the next couple of years:

BMO Senior Economist Sal Guatieri says the price of homes in Vancouver and uncertainty over long-term mortgage rates are creating a buyer’s market.

He also says rich foreign investors who have driven up real-estate prices in Vancouver are now looking at cities that are less expensive.

“The sizzle is coming off the Vancouver housing market,” Guateri says.

Read the full article over at News 1130.

This post was submitted by Eddie.

The Globe and Mail has a suprising headline: Sky-high housing prices in Vancouvers west side short lived.

Both sales and prices are down at the top end even more markedly than in the rest of the region, which has also seen a general slowdown this spring.

A house on the 3000 block of West 24th Anenue, first listed at near $4.5-million six months ago, sold on April 15 for $3.35-million.

Fresh statistics from the Greater Vancouver Real Estate Board show the number of sales on the west side is down by nearly 40 per cent for the first four months of the year. Only a third of the nearly 400 homes listed in April have sold – one of the lowest rates in the region.

Realtors say the slowdown appears to have resulted from a combination of tighter lending practices by local banks, which now want proof of income to service large mortgages, more restrictions on how much capital can be taken out of China, and fewer immigrants.

“Banks are now requiring borrowers to disclose incomes and assets before mortgages are approved, as of the last six weeks,” said west-side realtor Marty Pospischil, who specializes in selling single-family homes owned by long-term residents. Last year, he says 90 per cent of his 100 house sales were to “offshore buyers” – people not living here yet, who flew in to buy. This year, it’s less than a tenth of that. “We’re now seeing a 50-per-cent collapse rate in deals, when it’s usually more like 5 per cent,” he said.

Read the full article here.

Yes, you heard that correctly.

The word “bubble” was used in a discussion on a national news broadcast.

The CBC discusses the Canadian housing bubble with four economists and gets a fairly unanimous agreement: The Canadian housing market is overpriced and bubbly in many areas.

video embedded below:

This post was submitted by specuskeptic.

Every month the GVREB releases it’s market update.  This should not be confused with the REBGV press releases.  Both use current market data and anecdotes from professionals but they spin different directions.

The GVREB is a volunteer organization.  You can help contribute knowledge and market data to their ongoing reports by emailing them at  gvreb1@gmail.com

Here’s the current market update for April 2012:

FOR EXCLUSIVE RELEASE ON VCI
Real Estate Market Sales Volumes Fall Further in Greater Vancouver

VANCOUVER, B.C. –May 1, 2012 – April saw the Greater Vancouver real estate market continue to falter as sales volumes decreased below all relevant comparative periods including a 4 per cent decline in detached sales from the previous month. Continued education of Canadian buyers on the risks of high debt levels as well as reduced expectations of future increases in real estate prices has inserted an increased level of caution in buyers.

GVREB reports that residential property sales of detached, attached and apartment properties reached 2,806 in April. This total represents a 13 per cent decrease compared to the 3,225 sales in April 2011. Looking back, sales activities were 20 per cent below the 3,512 units sold in April 2010 and also 5 per cent below the 2,963 units sold in April 2009. April’s sales volume and its sale to list ratio of 46% were both the lowest of the previous 12 years. In addition, we saw the average detached price fall a further 4% from March 2012 and is 8% below April 2011 in last year. The impact is partly been a result of a significant slowdown of properties valued over $3.0 million with months of inventory for these units are now exceeding 18 months.

Discussions with industry professionals have noted “This is the weakest spring we have seen since before 2001. Limited price increases over the past 5 years in the condo and townhouse market has resulted in a reduced pool of move up buyers. The excess of unsold newly built luxury detached properties has caused home builders to be absent as purchasers on the resale market as they focus on selling their existing completed homes. These two factors combined with changing buyer sentiment and stricter lending conditions, has resulted in significant inventory increases in the lower priced detached single family homes.” GVREB notes that previous inventory increases were concentrated in higher price categories and thus we now have a more broad market slowdown. GVREB also wishes to clarify that that major transportation and road infrastructure enhancements in more distant suburban locations have had little impact on prices with areas such as Maple Ridge and Pitt Meadows only seeing insignificant price increases and many properties experiencing decreasing values.

New listings for detached, attached and apartment properties in Greater Vancouver totalled 6,067 in April. This is approximately 12 per cent above the 10-year listing average for the month of April. Listings in April 2012 represent a 4 per cent increase compared to April 2011 when 5,847 properties were listed for sale and an 21 per cent decline compared to the 7,648 new listings reported in April 2010. The Spring listings pace increased 4 per cent from the 5,843 listings in March 2012.

We are now at decade high inventory levels for the Spring season and at 16,524, the total number of residential property listings in Greater Vancouver increased 16 per cent compared to April 2011, increased 8 per cent from the previous month and has increased 30 per cent since January 2012.

The Residential Reference Price for all residential properties in Grater Vancouver over the last 12 months has increased 5.1 per cent to $672,000 in April 2012 from $639,200 in April 2011. Although the market has increased in the past 12 months, gains are almost entirely a result of gains in the detached market. Price gains of detached prices in recent months however have been insignificant and we are now seeing prices fall in previously strong markets such as Richmond and Burnaby. Due to the limited gains outside of the detached market, leveraged sellers of attached properties and apartments are finding that the high transaction costs in real estate are eliminating much of their equity after selling. A significant majority of purchasers of condominiums across the Greater Vancouver region in the past two years would be unable to realize net gains by selling in current market conditions.

Sales of detached properties in April 2012 slowed to 1,130, a decrease of 19 per cent from the 1,402 detached sales recorded in April 2011, and a 18 per cent decrease from the 1,370 units sold in April 2010. On a month over month basis, sales declined 4 per cent during a period which we typically see an increasing sales trend. Sales during April of detached homes were the lowest since 2001 and were below the 1,190 sales made during April 2009 when the Greater Vancouver market started to recover from the sales reductions during the global financial crisis of 2008-2009. The reference price for detached properties increased 5.9 per cent from April 2011 to $1,042,000 but fell from $1,048,000 in the previous month.

Sales of apartment properties reached 1,193 in April 2012, a 1 per cent decrease compared to the 1,201 sales in April 2011, and a decrease of 22 per cent compared to the 1,526 sales in April 2010. The reference price of an apartment property increased 1.9 per cent from April 2011 to $379,000.

Attached property sales in April 2012 totalled 483, a 22 per cent decrease compared to the 622 sales in April 2011, and a 22 per cent decrease from the 616 attached properties sold in April 2010. The reference price of an attached unit decreased 1.2 per cent from April 2011 and 2012 to $470,000.

There’s an article in the Globe and Mail about the rising number of ‘Grandpa debtors‘ – people past the age of 55 who have debt problems.  There are a few reasons sited for this shift: easy credit, lack of emergency savings and relying on real estate as a retirement plan:

Real estate can also be a factor in some of these dire debt situations, Mr. Elyea said. Some older debtors head into retirement with $50,000 still left on their mortgages, and then start using their credit cards to pay them because their income has dropped and the CPP and OAS aren’t enough to cover the payments.

There’s also the trap of considering your home to be your retirement nest egg, said Mr. Elyea, which can backfire because of the unpredictability of the housing market.

“In our Tri-Cities practice [covering Coquitlam, Port Coquitlam and Port Moody], that’s where a lot of people bought houses at the height of the market when anybody could get financing, and now they’re all [valued] below what they paid for them,” he said.

If you do find yourself in a situation where your debt has gotten out of control, see a professional, said Mr. Eylea, whether it’s a bankruptcy trustee or a money coach who can let you know about your options.

Here’s the full article.

An Observer has started up a new Vancouver RE blog focused specifically on tracking price drops!

Right now at vancouverpricedrop you’ll find number of asking price drops by area and a ‘top eleven’ list of price drops in the Vancouver and Fraser Valley region.

These drops are all over the map, some have dropped asking price by a million and are still a million over assesment.  There are a couple that seem serious though with new asking prices several hundred thousand dollars under assessed value.

It’s fantastic to see a new addition to the Vancouver bubble blog crowd, especially one that is focused on specific data.  Looking forward to watching this one in the future!

Here’s that link again: vancouverpricedrop.wordpress.com