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.
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?
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.
..At least that’s what Mark Carney and other Bank of Canada officials have said according to this article, yet they’re refraining from being more specific.
Meanwhile the Organization for Economic and Co-operative Development (OECD) is urging Canada to start raising interest rates in the fall and keep on raising them to stop an inflating housing bubble and reign in inflation.
The OECD, a high-powered economic research group backed by contributions from its 34 rich country members, offers a scenario: An increase in the benchmark rate of a quarter of a percentage point in the autumn, and similar increases each quarter through to the end of next year, leaving the benchmark overnight target at 2.25 per cent.
That still would be low by historical standards, yet, according to the OECD, likely a big enough increase to cause prospective homeowners to think twice before buying at current inflated prices. However, the OECD’s recommendation comes with a risk.
The Federal Reserve Board has made a conditional pledge to leave U.S. rates extremely low until the end of 2014. Following the OECD’s path could create an unprecedented spread between Canadian and U.S. interest rates, which would put upward pressure on a Canadian dollar that many say already is too strong.
Oh, and the OECD made this same recommendation a year ago and was ignored. So I wonder how Carney intends to bring the days of ultra-cheap money to an end?
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!
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:
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?