Category Archives: predictions

Full-blown crash mode?

Way too early to call this one, but Whistler or Bust points out the steep crash in December prices at the National Bank home price index. This one is interesting because it only measures sales of the exact same property to get it’s numbers.

If you go to housepriceindex.ca and click Vancouver you’ll see a chart that shows the recent dip, which looks like one of the steepest declines on the index so far.

Some realtors have stated that January sales are not looking very good so far and Paul Boenisch posts daily numbers here that are showing listings bumping up in the new year, but not too much on the sales numbers so far.

Paul also has a new website up at clivestevepaul.com if you’re looking for help buying or selling particularly on the north shore.  That’s a shout out to a realtor who has consistently shared daily sales stats for years and years for your amusement and edification. Cheers Paul!

Realtors expect decline in 2017

Praising a forecast market correction in Vancouver as a return to sanity:

Vancouver’s long-awaited housing correction may be around the corner: prices are headed for a double-digit decline in 2017 as buyers drop out of the market, according to the head of Canada’s largest real estate services company.

“Home prices had gotten so out of whack with the growth in underlying wages and salaries that there had to be a correction,” said Phil Soper, chief executive officer of Royal LePage, a unit of Brookfield Real Estate Services Inc. “And it’ll happen in 2017.”

Royal LePage is preparing a formal forecast for release in early January based on data from Brookfield, which also runs the nation’s biggest property valuation company. Those appraisals are used by banks, insurance companies and mortgage underwriters.

Read the full article here.

BC teaser loans panned in media.

The new first time buyer teaser loan program announced by the BC government has met a suprisingly negative reaction in the media, but some online polls show voters approve.

This move seems designed to undo some of the federal ramp back of housing market fuel. Bearvancouverite points out this might help developers who are seeing people backing out of presales agreements.

This might be exactly why Christy did it. Developers were panicking that presales won’t close because mortgage qualifications would be so different in the next few years, they need to dangle a carrot to make sure speculators don’t just walk away and first time buyers can be convinced to take over presales from flippers.

Scoop points out why this program should be referred to as a “teaser loan” as made popular in the US housing bubble:

Definition of “teaser loan” from investopedia: An adjustable-rate mortgage loan in which the borrower pays a very low initial interest rate, which increases after a few years. Teaser loans try to entice borrowers by offering an artificially low rate and small down payments, claiming that borrowers should be able to refinance before the increases occur.

http://www.investopedia.com/terms/t/teaser-loan.asp

Let’s all call start calling this new program what it is: Christy’s Teaser Loan Program.

Can it happen here?

Ulsterman commented yesterday sharing an exchange with a local radio host.  Will the current price drops end up the start of something bigger or a rehash of 2009?


I sent an email to Lynda Steele on CKNW because she stated that she was confused by the local market. Some say prices are down, and yet others say they’re going up. Then they quoted the BC Assessment report that came out today and is warning that assessments will be up 30-50%. I explained in my email that since prices peaked in Spring 2016, they had since made a fairly significant correction.

She responded and asked if i were a realtor. I replied with:

No, i just take a keen interest in the local market but i have no “official” expertise. But neither do i make my living from encouraging people to buy or sell a house, so I have no vested interest either. It’s always a good time to buy or sell according to BC Realtors, so when i hear they are guests on radio shows I don’t put much faith in their advice.

My understanding of markets before corrections is as thus. First sales collapse (check), sellers desperately hang on, refusing to make significant discounts – price stickiness ( check), eventually some people have to sell (job losses, moves, divorces, debt loads etc) and this sets the new price – already happening in the single family home market.

By Spring there will be a tsunami of houses hitting the market as people try to beat the price drops and of course buyers figure this out and wait for lower prices, compounding the problem for buyers. This has happened in all markets that have corrected, from the US, to Ireland, to Spain. Vancouver will feel the pain too. With all the new mortgage qualification rules, foreign buyer taxes, so-to-be reduced AirBnB gravy train, rising interest rates etc, I think you’d be foolhardy not to just wait and see before buying. There’s almost no upside potential, but a massive risk of watching hundreds of thousands of equity get wiped out in months.

Imagine someone who has moved from a condo to a townhouse over the years and just recently leveraged to the maximum to buy a house this Spring. Maybe they put $500,000 down and borrowed a million. With the already-happened 20% correction they’ve watched $300,000 disappear. It won’t take much more before a decade of equity accumulation is gone. Leverage is wonderful when prices are rising, but it’s brutal when they go down.

Vancouver House Prices Plunging

Get your hankies out, the unthinkable has happened.

Sellnoworbepricedin4evah shared this article at CTV news about Vancouver house prices ‘plunging‘.

It’s apparently gotten so bad that some houses are now selling for under one million. Horrors! What will become of housing in Vancouver!

Sutton West Coast realtor David Hutchinson has been tracking plunging prices and found several detached homes listed below $1 million, some of which had been recently renovated.

“If you want to sell, you have to be priced sharply, and you see a lot of price drops,” Hutchinson told CTV.

And even with price drops, he added, he’s seen many sale prices lower than what sellers are asking for. He said he knew of one home in the west side of the city that was initially priced at $3.9 million, but when it didn’t sell, the owners reduced the price. They kept reducing it in small increments, but eventually they couldn’t wait any longer, and had to drop the price by nearly $1 million.

Another home on West 8th in Kitsilano was listed for $2.5 million, but could only fetch $1.6 million.

“There’s not this crazy deluge of offers coming in like before, when you could price it below the market value and wait for all the offers to come in. That’s not happening anymore,” Hutchinson said.

“Buyers are being a little more picky now and you didn’t see that before.”

You know what this means right? Deal Time!

Anybody looking for a tear-down in a bad neighborhood for just under a million?

Read the full article here.