Category Archives: BC

Vancouver Real Estate: listings up, sales down

Over at the CBC there’s an article about the ‘uncertain fate’ of Vancouver real estate.

Vancouver’s real estate market has taken another interesting turn, with listings up and sales down during what is usually a busy time of year.

In May, average prices for houses have dropped about $150,000 compared to one year ago. That 12-per-cent drop wiped out two years of price increases.

The reason appears to be that too many more sellers are trying to cash in at the same time. Listings are up by 23 per cent, but fewer are buying: sales are down 24 per cent.

“Probably, on average, about a 150 or 160 homes in Vancouver are reducing their price every day in the hope of catching, getting ahead of the train and maybe get out before they can’t,” said realtor Larry Yatkowsy.

Larry is an interesting fellow, he seems to change opinions frequently, but isn’t it in most realtors interest to get sellers to lower listing prices to make a sale?

GVREB Press Release May 2012

Note: Every month the GVREB releases a market update. These are very similar to the official REBGV press release – both use real numbers and expert anecdotes, but they spin different directions.  Here is the newest press release covering the Greater Vancouver real estate market for May 2012.

High Inventory Levels and Low Sales Volumes as Greater Vancouver Enters Summer Market

FOR IMMEDIATE RELEASE ON VCI

VANCOUVER, B.C. –June 1, 2012 – Sales in Greater Vancouver showed a typical seasonal trend in May but continue to be at low sales volume levels not seen for more than a decade. May showed a pronounced decrease in sales per market day falling from 147 last month to 130 in May. This decrease of 12 per cent compares to the typical average decrease from April to May of 9 per cent. Continued below average sales combined with continued above average listings have resulted in both record high seasonal inventories and near record low sales to listings ratios. Global economic uncertainty, tightening mortgage regulations, cautious buyer sentiment and reduced net immigration rates have reduced overall buyer demand.

May’s total unit sale activity was 2,857 properties. Although this is flat compared to April’s sales, there were 22 market days in May compared to 19 in April and May was the lowest May sales since May 2001. May 2012 sales were 15 per cent below the 3,377 units sold in May 2011 and 5 per cent below May 2008, which was the most recent low for May sales. May’s sale to list ratio of 41% was the second lowest in more than a decade and significantly below the historical average for May of approximately 61%.

GVREB reports that May 2012 continued a negative market sales trend which has existed for the past 10 months and considering expected changes in credit conditions, a recent reduction in the level of foreign buying activity, global financial uncertainty, macro-level demographic changes and continued media coverage of a possible overvalued market, there are no foreseen factors that could change the trend to a positive direction. Failure of current listings to be removed from the market or an immediate reduction in new listing rates will result in measurable price decreases by motivated sellers in the near future. May 2012 also brought significant decreases in average selling prices of detached and attached properties with the average detached price down 13 per cent from its peak in February 2012. During May, the average detached price in the last half of the month was 7 per cent lower than the first half resulting from more pronounced seller discounting in order to complete their sale transaction.

New listings for detached, attached and apartment properties in Greater Vancouver totalled 6,950 in May. This is approximately 22 per cent above the 10-year listing average for the month of May. Listings in May 2012 represented a 17 per cent increase compared to May 2011 when 5,931 properties were listed for sale and an 1 per cent decrease compared to the 7,014 new listings reported in May 2010.

Greater Vancouver continued to have near seasonal record active listings. At 17,834, the total number of residential property listings in Greater Vancouver increased 8 per cent this month alone and 22 per cent compared to May 2011. Total Months of Inventory now is firmly in buyer’s market territory with approximately 6.2 months of inventory.

The Residential Reference Price for all residential properties in Greater Vancouver over the last 12 months has increased 5.1 per cent to $684,100 in May 2012 from $650,800 in May 2011. We expect that high inventory levels will put pressure on prices and we foresee very little likelihood of higher prices in the near future based on current market conditions.

Sales of detached properties in May 2012 slowed to 1,184, a decrease of 25 per cent from the 1,570 detached sales recorded in May 2011, and a 5 per cent decrease from the 1,256 units sold in April 2010. The larger year/year decrease in sales compared to the attached and apartment markets is due to the higher than normal sales volumes for detached properties in May 2011. The reference price for detached properties increased 5.4 per cent from May 2011 to $1,060,000 but fell from $1,064,800 in the previous month.

Sales of apartment properties reached 1,190 in May 2012, a 3 per cent decrease compared to the 1,228 sales in May 2011, and a decrease of 12 per cent compared to the 1,354 sales in May 2010. The reference price of an apartment property was up 3.0 per cent from May 2011 to $385,000.

Attached property sales in May 2012 totalled 483, a 17 per cent decrease compared to the 579 sales in May 2011, and a 12 per cent decrease from the 546 attached properties sold in May 2010. The reference price of an attached unit increased 0.4 per cent from May 2011 to $480,000.

Whistlers nasty collapse

They say bubbles inflate from the center, working their way out to peripheral areas. They then tend to collapse in reverse with outlying areas crashing first as the equity vacuum works its way back to the center.

Right now Vancouver is seeing unseasonably high listings and lower than normal sales. Prices are softening, but there’s no dramatic crash yet.

Meanwhile Vancouver Island, The Sunshine Coast and the BC interior are all seeing dramatic price drops.

Just north of us you’ll find Whistler BC, the ski resort where prices just keep on melting. The Village Whisperer points out this 65% asking price drop since 2005.

On a similar note Makaya pointed out this delightful instance of Whistler bottom-calling in 2010. The supposition was that since prices had been dropping, they wouldn’t any more.

For people expecting the real estate prices in Whistler to drop after the Olympics, I’m afraid you’re going to be sorely disappointed.
According to George Klimock from The Whistler Real Estate Company, property prices in Whistler today are already 15-25% lower than previous prices in 2007. In fact, current prices in Whistler are down to 2001 levels.
With a high level of inquiries and good prices, Whistler is considered to good value in the resort market, with, for example, a 2 bedroom condo is now listed at $ 519,000 as opposed to the more expensive $ 630,000 a few years earlier.

Meanwhile prices just keep sliding down the mountain..

UPDATE: The whistler bottom-calling article linked above is not currently working. Ant saved a copy of it here on Vancouver Peak.

Brand new house $130k

What’s this, builders making a profit on new houses at $130k?

Apparently only in Vegas.

Yes, after a 60% drop in house prices builders are somehow still in business making new homes and selling them for under $200k.

“The single largest impact has been houses under $200,000,” Beville said. “Homes in the $130,000 to $190,000 (range) are getting a lot of love. The ones in the $200,000 to $300,000 are getting a little bit less.

Meanwhile in Vancouver even if you get the land for free it’ll cost you $270k to build a 500 sq foot laneway home.

Construction cost is high in Vancouver for a few reasons: permits, cost of materials, cost of labour.. but there’s really only one reason construction cost is so high: people are willing to pay for it.

It’s not like construction quality here is known for it’s quality (leaky condo crisis) and we even make use of unpaid illegal immigrant labour and still we pay these prices?

Ridiculous.

Vancouver housing zeppelin

Even with all the recent warnings of a housing bubble that is no longer limited to just Vancouver and Toronto, you’ll still find lots of media coverage that dismisses bubble talk or explains it away as an ‘ownership premium’.

It’s not difficult to see why this is – there are thousands of people who’s incomes depend upon the housing market.

Whether its condo marketer Bob Rennie or a random realtor, they all have their day to day income tied to the health of the real estate
market and conveniently are given ‘expert’ status and quoted by the local media.

That makes an article opener like this all the more shocking to newspaper readers:

Is there a housing bubble in the Lower Mainland? Housing zeppelin is more like it. Bubbles, after all, are soft and cute and harmless. Zeppelins, conversely, hurtle into the ground, spewing flaming wreckage in all directions. And that’s precisely what we’re about to witness in Metro Vancouver.

That’s the intro to a rather dramatic editorial written by Gord Goble and published in a number of local papers.