Category Archives: hype

FREE BEER!

All over BC the decline in real estate is in full swing. When you’ve got more sellers than buyers it takes a little extra to stand out.

And when that extra is FREE BEER! it does stand out.

Allen has had his three bedroom condo on the market for just over a month and says only two prospective buyers have stopped in.

“I have two houses, one in Kelowna and one in Kamloops and I just can’t afford to keep both going.”

The condo located on Springview place in Kamloops, was being rented, but after the tenants moved out and the house went on the market, Allen knew he had to be creative or he could be stuck paying two mortgages.

“I was sitting around thinking, this house is a real pain, it’s not getting nearly as many views as I would like. How am I going to attract people to this house? Well I was drinking a beer at the time and I thought why not just give away beer for a year.”

Allen hopes the free beer initiative will be the final push to get people thinking about buying.

“This place is geared towards students, and that is who I am marketing with this campaign of free beer for a year.”

Here’s the full article.

‘very clear signs’ of market slowdown

Is the Vancouver real estate market cooked?

Sales are plummeting and the lower mainland is choking on inventory.

Tsur Somerville decided it’s time to sound the warning bell in the Vancouver Sun:

“We’re getting this consistently now,” said Tsur Somerville, director, centre for urban economics and real estate, Sauder School of Business at the University of B.C., after a monthly report by the Real Estate Board of Greater Vancouver showed a continued rise in listings as sales drop.

“We’re in a market that’s much slower than what we’re used to and I think that will transfer into much more sluggish prices, at best.”

According to the board’s report, released Monday, May sales were the lowest total for the month since 2001 and 21.1-per-cent lower than the 10-year average for May sales. Local home sales in April were also the lowest total for that month since 2001.

…yeah, that’s right.  Lowest since 2001.  And the remarkable thing is that the word the real estate board has chosen to describe this market is ‘balanced’.

I guess it is very important to keep your balance while you’re sliding down hill.

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.

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.

Buyers walking away from deposits

Well, there’s a change in the air when it comes to Vancouver Real Estate.   The ‘can’t lose’ investment is starting to look like the ‘must lose’ investment with reports of buyers walking away from deposits and waiting for prices to keep dropping.

“It happened twice in the last month. One [deposit] was $75,000 and one was a $20,000 deposit, the guys just walked away from it,” said Mr. Arora, who runs Oneflatfee.ca in Surrey, B.C. “They are going to wait it out. So they lost $75,000 and $20,000, but if the market comes down $150,000 on a $1.5-million house, that’s not uncommon.”

Vancouver’s once-overheated housing market has cooled sharply, with the average price falling nearly 10 per cent in April from a year ago to $735,315, according to figures released Tuesday by the Canadian Real Estate Association. That was the largest drop since the recession and it marked the fourth decline in the past five months.

In a market once famous for being overheated, Mr. Arora said he hasn’t seen a bidding war in months. “It’s totally a buyers’ market. Buyers are determining the price,” he said. “And sellers are surprisingly accepting it. They are taking it.”

Buyers always determine the price.  If there are enough of them that want to pay more they will drive prices up.  Sellers have no control if no buyer is willing or able to pay the asking price.