Vancouver Condo Info

This is a pass-off post to Paul Boenisch at nvcondos.ca who has just posted some dramatic month-end June stats on his blog.

If you haven’t seen these numbers yet, or if you have any doubt that the Lower Mainland real estate market is undergoing a dramatic shift, check them out now.  Supply continues to grow while sales keep dropping.

Here are a few highlights:

Sales down 41% from June 2007
Inventory up 53% from last year
North Vancouver inventory up 113%

Check out Paul’s blog for all these stats and more graphed out for some dramatic visuals.

So far prices haven’t been impacted much at all, but increasing supply and decreasing demand will put pressure there unless this dramatic shift reverses soon.  Could we be in danger of tracking the US market?

Umdesch4 posted this updated REBGV inventory chart this weekend, showing the dramatic listings activity we’re seeing this spring in Vancouver. That purple line shows how inventory is building beyond levels seen at any point in the last few years.

The monthly inventory graph comes from Paul Boenisch, who shares monthly inventory graphs for the entire REBGV and sub areas. This graph has been updated to the 15th of May based on the daily stats Paul makes available on his website. Pauls blog is here.

Spring is here and the listings are blooming like crazy. Both Vancouver and the Fraser Valley are being hit by a combination of fewer buyers and a greater number of owners looking to cash out. Here’s the REBGV listings chart for the last 4 years courtesy of Paul Boenisch:

Clicking the graph above will bring you to his blog which has additional graphs for sub areas- we’re seeing rapid inventory growth on the west side and north shore. Paul also tracks daily statistics on sales, price and listings on his website.

In the Fraser Valley listings are growing as well - They now have a near record amount of inventory. The following sales and listings chart for the FVREB was created by Mohican at Langley Financial Planning. Check out his site for more charts and detail on the Fraser Valley market.

It looks like growing inventory is starting to put some pressure on prices. Prices in all categories are up year over year, but the month over month figures look unusual for the spring selling season. The Benchmark price is down in all categories in North Vancouver, slightly up for houses and townhouses in Vancouver, but Vancouver condo’s and apartments saw their benchmark price drop by 3.16% in April. The spring market so far this year is looking markedly different from the last few years, we’ll see how this trend holds up into the summer.

I found this shocking bit of info over at Rob’s blog posted by Awum:

Here’s something I was wondering about. I heard anectdotally that Vancouver east side condos seem to be on a downhill slide as far as price goes. This morning I was reminded of http://www.landcor.com/market/housing_price_index.aspx to check it out, typed in Vancouver East, apartments, pushed refresh graph. Waited. Looked at the graph. Wow.

Other areas really don’t show so much weakness (I looked at a few) but Van East apartments looks like its in bust mode already. Looks like a 15% drop in HPI from peak. That’s a big deal.

Now before anyone accuses me of going all “Chicken Little” over this one piece of data, let me be clear about my point: The only reason for this drop in HPI that I can ascertain is plain old supply & demand. Too many properties for sale, not enough buyers with the required $$.

I have to admit I was very suprised to see that graph as well - I’ve always looked to the MLS Housing Price Index which doesn’t show any such correction underway. I tried to find information on the Landcor site on where they get their data and why it would vary so much from the MLSlink data and the found this page on their site which is heavy on buzzwords, but light on specifics:

The accuracy of Landcor™’s AVM is further enhanced by the quality of our data. We update our copy of BC Assessment Authority property information on a weekly basis. There are typically between 3,000 and 9,000 property information and sale changes each week. Our competitors in BC and across the nation typically update data stores once a month. Landcor™ has the most up-to-date information on property in BC.

So are East Vancouver apartment prices crashing as shown by the landcor data or are they remaining fairly steady as shown by the MLSlink data? I suspect the truth lies somewhere in between - It’s pretty tricky to ‘benchmark’ housing based on all the variables, but I’d be interested in hearing your opinion on this data.

I got this suggestion from were1non, who writes in with the following note:

I was just looking at the webtraffic statistics for mls.ca, and realtor.com to see if there was any correlation between the housing collapse and traffic to these two sites (mls.ca being the biggest listing site in Canada, and realtor.com for the US). I think this is an interesting time because this is the first time we can use web statistics to gauge interest in the housing market.

If we look at the alexa graph for realtor.com we see traffic start a steady drop in 2006, almost mirroring the US housing market slump:

Oddly enough, when you look at the traffic graph for mls.ca it does almost exactly the same thing, and as we all know there was no Canadian housing market crash in 2006:

So is it a coincidence that traffic drops off at realtor.com in 2006? Or perhaps there are competition factors at work here - my initial thought was that sites like zillow in the US and individual realtor VOW sites in Canada may have siphoned off traffic from these two main sites, but looking at a graph for zillow.com we see the same drop:

So whats happening here? Are we seeing interest in real estate fade in North America as a whole, is the traffic more evenly distributed, or are there other factors at work? One thing seems likely to me: it really is different this time - this is the first real estate boom that has played out online and no matter what happens the sheer amount of data, analysis and opinions that are out there and easily accessible is unprecedented.

update: David G from Zillow left a comment about the unreliability of Alexa data, Zillow traffic is actually up 30% over the year despite the condition of the US market.  These graphs track daily percentage reach and not absolute numbers but I still view them as an interesting proxy in the absence of more reliable web traffic data.

Speculation: Prices are going up, therefore prices will go up. Get in before you’re priced out forever. Its the only way to get really rich without even trying. Prices are practically guaranteed to go up forever. This time its different here.

Pent-up demand: Hey, we’re laid back in BC. We didn’t think about buying until everyone else thought about buying.

Rich Foreigners: We love it, we’ll take two, we don’t care what it costs. Do you have any magic beans for sale? We’re investing in magic beans as well, thats how we got so rich.

Leaky Condos: Its like NEW now! And its cheaper than the others! Lets buy it!

Low interest rates: Heck, the bank’s practically paying us to get rich.

Population growth: Ok, so population growth isn’t so hot. Still, you have to admit SOME people are moving here, just less than before the 90’s correction.

Income growth: Lets see now.. I could take on a paper route, mow a few lawns on the weekend and apply for that night watch job at the construction site.. maybe sell my plasma on the side… Yes, honey, we can make that mortgage payment!

Illegal drugs: Dude! heheh. This condo is wiiiicked! It’s like totally 3D! Quit bogarting the joint, pass the dutchie man! whoa. I can feel the shrooms kicking in, where do I sign?

WTF? We had great volume in July, lots of sales, but the benchmark house price didn’t go up at all. In fact at a benchmark price of $714,810 detached houses actually lost $905 in the month, hardly enough to get excited about, but shouldn’t prices be going up in a hot hot market?

Those at the lower end are still doing their part: Condos are up a healthy $4k from the previous month, while townhouses are up $5k, so what happened to the houses?

One more step up the mountain - the Benchmark price for a detached home in Vancouver hit $715,715 last month according to the Real Estate Board of Greater Vancouver. Here’s my standard short term graph, we’re one month short of a year on it:

Townhomes and apartments were up as well - according to the REBGV this was the “second best June on record”. The attached benchmark hit $443,060 while the benchmark condo now goes for $360,469:

Last year prices saw a high point hit in September - Where will this years peak be?

Thanks to Agent Will for the stats package.

Wow. Just wow. The Real Estate Board of Greater Vancouver just released their benchmark stats for May 2007 and prices are up again - a record price of $711,245 for the detached benchmark. Have we attained the least affordable city in North America status yet?

And Condos and Townhomes? Also up:

Now who says thats a bubble?

Stats from agentwill who adds “I have no idea when this will end. All I know is that despite so much logic against these rising prics, well, it ain’t ending.”

Freako added some quick numbers in a previous post that I’m going to repost here:

“Based on the latest ING rates and 20% down, that results in payments of $3,536.29 before taxes, maintenance or repairs.”

“How is this remotely possible? i punched the the mortgage amount into ING’s “how much can I borrow calculator”, and the required income is $143,000. What percentile of households earn that?”

..and to round this post up reductimat sends in this link to a scotiabank study that forsees a slowing in the Canadian Housing market, but ‘certainly not a bust’.

Here’s an excellent Buy/Rent comparison calculator on the New York Times site. It lets you enter rent value / purchase value, interest rate, property taxes and then adjust sliders for house appreciation and rent increases.

What with recent complaints about ‘affordability’ in the lower mainland I was curious about how some local real estate would compare, so I entered some number for this house I found on craigslist since it listed a selling price and current leased rental income.

With rental income of $1170 and an asking price of $419,800 you get some interesting results by playing with sliders on that calculator. for instance: 25% down payment at 6.25% interest rate - if the house appreciates by 10% a year over 30 years you’re better off buying after just one year, but if the house appreciates an average of 5% a year over 30 years you’re better off renting.

There are a lot of variable there - if you have some numbers from the local market its worth plugging them in and checking out the results.

Note: Since this is a US site I assume they are taking into account the mortgage tax write off, which we don’t have here in Canada.

UPDATE: dingus points out this Canadian buy/rent calculator.