Category Archives: data

Trade deficit at record levels

Patriotz pointed out this article at the CBC: Canadas trade deficit has grown to the largest level ever, and this at a time when oil and commodity prices are high.

The gap between what Canada sells to the world and what it buys from other countries expanded to the largest point on record in July, as its trade deficit expanded to an all-time high of $2.3 billion.

Exports fell 3.4 per cent during the month, Statistics Canada reported Tuesday. That was more than the corresponding decline in imports, which were down 2.2 per cent.

Exports of energy products fell 8.5 per cent to $8.2 billion for the month, the data agency reported, while exports of automotive products dropped 5.3 per cent to $5.9 billion.

“This is about as bad as it gets for Canadian exporters, at least so far,” Scotiabank economist Derek Holt said in a note following the release of the data. “[And] the details are worse.”

Read the full article here.

Why are sales and prices dropping?

Let’s carry on with our look back at September.

The official stats are now out from the REBGV and there’s some headscratching stuff in there.

Take this article in the Vancouver Sun for example:

Metro Vancouver home prices continue to drop as sales activity falls sharply below historical levels, according to the Real Estate Board of Greater Vancouver.

“We thought we’d see a slight increase in activity in September, but we didn’t,” said REBGV president Eugen Klein. “There doesn’t seem to be any urgency between either the buyer or the seller.”

I guess we’ve gotten so used to ‘increase’ (whether it’s prices or sales) that it’s confusing when the opposite happens.

And you’ve got to love that little bit of justification you see in every housing bubble, it goes a little something like this: “Well, prices might fall a bit in the poorer areas, but not in the hot areas!”

..but of course the hot areas are always the ones that fall:

Prices fell more sharply in expensive areas including Richmond, West Vancouver and Vancouver West, which saw a sharp run-up in prices in 2010 and 2011.

Vancouver West, for example, saw a 6.5-per-cent, year-over-year decline in the benchmark price of single detached homes to $2.09 million.

Tsur Sommerville has some theories about why the market is stumbling right now:

“This is the first time since 2007, 2008, when prices have come down by this degree,” added Somerville. “When you have nine months of continuous months of weak sales, it will show up on the price side.”

Somerville believes high prices, and reduced economic optimism, are behind the sales drop. “And cycles happen.”

The winning quote goes to Eugen Klein, who blames this market change on the federal government ramping back some of their market interference in the form of short amorts:

Klein said some of the fall-off in sales could be attributed to the federal government’s decision to eliminate 30-year amortization on government-insured mortgages.

“This makes homes less affordable for the people of the region,” said Klein.

Yes, as soon as house prices start to fall it puts buyers in a real pickle.  If they fall too far no one will be able to afford a home.

…oh, wait.  He meant ‘affordability’ as in huge long amortizations based on current low interest rates, not on overall price.

Some commenters here posted highlights from the data package.  Not much of a name posted this breakdown:

Overall – benchmark down 0.8% YOY – Down 0.6% MOM
Detached – down 0.5% YOY – Down 0.7% MOM
Apt – down 0.7% YOY – Down 0.4% MOM
Attached – Down 2.7% YOY – Down 0.8% MOM

..and VMD posted this historical comparison of Months of Inventory (MOI):

MOI  2012  2011  2008
Oct        6.6  14.1
Sep  12.1  7.2  12.5
Aug  10.7  6.5  11.4
Jul  8.6  5.9  8.8
Jun  7.8  4.6  7.5
May  6.3  4.3  5.4
Apr  5.9  4.4  4.7
Mar  5.3  3.2  4.8
Feb  5.5  3.9  4.3
Jan  8.0  5.7  5.5

VMD also posted this list of areas with the biggest sales declines:

SFH Stats Sept 2012: (ranked by worst sales decline)

Richmond:
Sales:-50% YoY, -10% MoM
Ratio: 22% vs 32%
HPI: -4.2% YoY, -1.3% MoM
Median: -9.8% YoY, -1.4% MoM

Burnaby:
Sales -49% YoY, -10% MoM
Ratio: 18% vs 35%
HPI: +4.2% YoY, -0% MoM
Median: -13% YoY, -6.3% MoM

Van East:
Sales:-48% YoY, -6% MoM
Ratio: 30% vs 51%
HPI: +3.2% YoY, -1.1% MoM
Median: -2.5% YoY, -0.6% MoM

Coquitlam:
Sales:-37% YoY, +16% MoM
Ratio: 30% vs 51%
HPI: +3.6% YoY, -0.2% MoM
Median: +0.4% YoY, -3.7% MoM

Van West:
Sales:-17% YoY, +15% MoM
Ratio: 27% vs 27%
HPI: -6.5% YoY, -1.3% MoM
Median: +1% YoY, +0% MoM

 

 

Steady low sales continue

Here’s a round up of last months housing market by the GVREB.

The GVREB posts a monthly market summary similar to the REBGV, but the spin is in the opposite direction.

Here’s what they say about themselves:

“GVREB is a not for profit real estate bulletin prepared by industry analysts and market participants. Comments, information and questions can be sent to the general e-mail box at gvreb1@gmail.com”

And here’s what they say about September 2012:

Steady and low sales volumes continue through September
FOR IMMEDIATE RELEASE ON VCI
VANCOUVER, B.C. –October 3, 2012 – Sales volumes in the Greater Vancouver real estate market flattened in September 2012 yet showed typical seasonal correlations compared to August 2012. September 2012 had the lowest monthly sales volumes for the month of September in more than 20 years as the impact of the new mortgage regulations were fully reflected in market activity. Sales volumes increased compared to August 2012 with daily sales volumes increasing to 77 sales per market day in the first half of the month and then to 84 sales per market day in the second half of the month. These volumes are at seasonally historical low levels and when combined with high inventory levels, active sellers are seeing few active buyers and must price their properties accordingly in order to complete their sale.

GVREB reports that residential property sales of detached, attached and apartment properties fell to 1,522 in September 2012, the lowest total for the month of September in more than 20 years. This total represents a 32 per cent decrease compared to the 2,246 sales in September 2011. Although September 2012 had the lowest monthly sales for more than two decades, it had 2 fewer market days than 2008. Adjusting for the number of sales days, September 2008 had lower sales volume than September 2012 as the number of daily sales per market day was 80 for September 2012 while September 2008 had 75.

September 2012 also brought a shift in property sales mix consistent with the changes in credit conditions. Properties typically purchased by first-time buyers have had sales volume decreases at a higher rate with apartments in all areas and homes in lower priced sub-markets slowing at a higher rate. This has had the impact of placing upward pressure on the average selling price of detached properties even while the Reference Price is decreasing. Discussions with industry experts have noted that buyers are currently financially defensive and are being cautious, making aggressive low-ball offers and waiting for sellers to reduce prices. Several properties sold for more than 20 per cent below asking prices during September 2012 while only 5 per cent sold for over the asking price. GVREB also notes that sales volumes of detached properties in historically middle-class sub-markets were the lowest in over 20 years with sales continuing to languish further in Richmond, North Vancouver and Burnaby. These 3 sub-markets had the lowest September sales volume for detached properties since the 1970’s. Low sales volumes combined with high inventory levels have increased the overall Months of Inventory (MOI) to 12. At MOI in excess of 10, there is typically a downward movement in property values.

New listings for detached, attached and apartment properties in Greater Vancouver totalled 5,199 in September 2012. This is slightly above the average listing rate for the past 12 years. In addition, the sales to new listing ratio of 29.3% was the second lowest of the past 12 years. Continued market weakness has also resulted in a higher rate of listing cancellations and thus, inventory levels have failed to exceed the highs previously noted in June 2012. Based on current sales volumes, sellers who continue to list their property without a price reduction are unlikely to complete their sale before next spring.

Active listings at the end of September 2012 were 18,350, an increase of 4 per cent from August 2012. MOI continued its increase for the seventh straight month reaching an average of 12.1 for all property types. MOI for detached increased to 13.7 months at September 2012 from 12.6 months at the end of August 2012. Attached and apartment inventory increased more significantly to 11.0 months from 9.3 months. In some sub-segments the limited number of buyers has increased MOI to even higher levels with Richmond detached properties only having only a single buyer for every 52 properties listed.

The Residential Reference Price for all residential properties in Greater Vancouver over the last 12 months decreased by 0.6 per cent to $605,000 in September 2012 from $611,000 in September 2011.

Sales of detached properties in September slowed to 602 units, a decrease of 37 per cent from the 957 detached sales recorded in September 2011, and a 30 per cent decrease from the 866 units sold in September 2010. September 2012 was the second lowest sales volume of detached in the past 12 years. The reference price for detached properties fell marginally to $938,000 compared to $939,500 in September 2011.

Sales of apartment properties fell to the lowest level for the month of September in the past 2 decades to 675 units in September 2012, a 27 per cent decrease compared to the 922 sales in September 2011, and a decrease of 30 per cent compared to the 971 sales in September 2010. The reference price of an apartment property decreased marginally to $368,700 from $371,100 in September 2011.

Attached property sales in September 2012 totalled 245, a 33 per cent decrease compared to the 367 sales in September 2011, and a 36 per cent decrease from the 383 attached properties sold in September 2011. The reference price of an attached unit decreased 2.7 per cent from September 2011 to $459,000.

Lowest September sales in 15 years

The official numbers aren’t in yet, but unless we had a gigantic number of sales that still need to be entered for the last day of the month it’s starting to look a lot like 2008.

..Actually worse than that.  According to Inventory we’re on track to have the lowest number of September sales in the last 15 years:

Sept unit sales Greater Vancouver (does not include Fraser Valley)
1994 = 2241
1995 = 1951
1996 = 2217
1997 = 2050
1998 = 1755
1999 = 1955
2000 = 1761
2001 = 2241
2002 = 2555
2003 = 3468
2004 = 3006
2005 = 3505
2006 = 2583
2007 = 2852
2008 = 1620
2009 = 3632
2010 = 2254
2011 = 2299
2012 = 1472 ***Sept 27

A few more hours to go, looks like Sept will make a record month for the lowest sales since 1995.

If Inventory is reading this, maybe they could update us on the final number in the comments.

 

Less than a hundred reasons RE is collapsing

There are 3 sales day left in September 2012.

That’s 3 more chances to have a day when we see sales over 100.

Do you know how many days we’ve seen sales go over 100 so far this month?

ONE.

There has only been one day this month where sales went over 100.

Here’s the last couple of Septembers for historical comparison:

2010: 11 days with triple digit sales

2011: 14 days with triple digit sales

2012: 1 day of triple digit sales (max possible 4)

Thanks to VHB for the stats and PaulB for the numbers.