So we’ve gotten to the point where it’s pretty unanimously agreed that real estate in Toronto and Vancouver is over-valued and due for a correction.
The question now is what sort of an end to this housing boom we will be looking at.
Will this be an explosive toppling of values, a market that runs head first into a wall, or will it be a simple slow leak for years and years?
..And which would be better?
You can add David Rosenberg to the list of people that say ‘whimper, not bang‘.
His latest comments fall into the ‘not a bubble, a balloon’ camp:
“Prices are starting to deflate by 0.8% YoY, though more like air coming out a balloon slowly than a giant pop,” wrote Rosenberg Tuesday in his morning note.
“It is gradually becoming a buyer’s market with the inventory of unsold homes rising to six month’s supply, which is at the edge of a balanced market.”
Of course most of that drop nationally is being driven by Vancouver where everything is falling fastest. What remains to be seen is whether the current drop will remain even or accelerate.
Two former city planners who were fired by councils over differences of opinion are in the Vancouver Sun complaining about a lack of planning.
That would be a lack of planning for future city growth.
They are joined in their concern by a third former city planner who retired in 2006.
“I come back to Vancouver and more and more I worry that here we have become incredibly complacent about the future we are going to face,” said Beasley. “To me there is no question. I don’t feel vague about it, I don’t think it is unknowable, we are going to have a big affordability problem in this city. That affordability could in fact be the defining reality and image in this city by 2050. It is already becoming the alternate image of this city that goes along with the beauty and all that.”
He said the region needs a “brand new” metropolitan plan, “a plan that thinks about the issues of the future, a plan that is not shy, a plan that does not have parameters and you can’t talk about this and you can’t talk about that. And until we get that plan, we are not going to solve the problems of the inner city, the affordability, our heritage program, our culture, whether we have enough office space. We just are not going to solve it unless we get a much broader concept of our metropolitan core and we get a plan for it.”
Toderian said in his term as planning director he tried to start a new citywide plan but could not get past “obsolete” local neighbourhood plans that have only made the problem worse.
Can you plan a great city, or can a great city just happen in a pretty place?
Should we have some sort of index tracking Realtors making public statements that it’s time to sell?
The market is sluggish, sales are low, inventory is growing.
..And the number of agents saying it’s time to SELL NOW is growing as well.
Agent Keith Roy was in the news recently with his blog post about the sale of his personal property and now Sam Wyatt is saying something similar:
Vancouver’s real estate market is getting and is going to get hit from both ends. So, now that you are thoroughly depressed, here is the bright light: IF YOU SELL NOW, YOU WILL STILL BE SELLING NEAR THE TOP OF THE MARKET. If you plan to sell, you will need to price BELOW the most recent comparable sales prices. If you don’t do this, your listing will stagnate. I am pleased that this methodology has produced 4 sales in the last 30 days for my clients in a market were most homes are not selling. In one case we had a multiple offer with a significant over asking result and in another we negotiated a full asking price sale.
I guess the important part is in all caps.
So can anyone find me a Realtor saying that now is a good time to buy in Vancouver?
If you’re curious what a market looks like when it’s been falling for a while check out these stats for different areas on the island.
John Cooper of ReMax provides some good stats packages for various Vancouver island markets.
It looks like a lot of the outlying areas and recreational property in BC isn’t doing as hot as it once was.
In Qualicum Parksville, a single condo sold last month.
What does ‘Buyers market’ mean to you?
Is it a market in which the buyer has lots of choice or gets a reasonable price?
..because they aren’t the same thing.
Now that prices are dropping from their record highs on Vancouver real estate, we’re seeing the term ‘buyers market’ bandied about in the media a lot. And with a huge number of places for sale and actual transactions falling to a 10 year low there’s lots of choice.
But prices are still near record highs!
Real estate is a slow illiquid market, it takes LOTS of time for trends to move through. Just take a look at the USA, there are some people thinking they’ve hit bottom in some markets after SIX YEARS of falling prices. Don’t expect deals within a few months, or even a few years.
Real estate marketers will use the term ‘buyers market’ a lot in the coming years, because they make money off transactions. If it’s not a good time to sell it must be a good time to buy right?
There is one nice thing happening with the shift in the local market though: the Vancouver Sun is starting to publish a bit more variety when it comes to RE market opinion:
Investors in stocks wouldn’t consider a drop in volume to be a buyer’s market in the absence of price changes. The adage that volume precedes price instructs investors to be patient. There’s no compelling reason for real estate buyers to act differently.
Bravo Vancouver Sun, Bravo.