Category Archives: prices

Whistlers nasty collapse

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.

Brand new house $130k

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?

Ridiculous.

Mortgage brokers warn about new rules

Canadian mortgage brokers are freaking out about new refinancing rules proposed by the OSFI which has taken over responsibility for the CMHC. Reasonably enough, they’re asking for clarification about proposals to require banks to check income and current house value before refinancing.

Currently, when mortgages come up for renewal, banks tend to focus on the borrower’s payment history. They rarely appraise the property again and not all banks will check the borrower’s updated income level, Mr. Murphy said.

“CAAMP strongly recommends that this concept be clarified so that mortgages continue to be renewed at maturity without requalification,” the industry association said in a submission to the Office of the Superintendent of Financial Institutions (OSFI).

“If not, homeowners who have been in compliance may no longer qualify. This would result in a number of properties hitting the market at the same time and thereby driving down prices.”

Such a phenomenon could add further fuel to a real estate downturn if lower house prices and higher unemployment caused more people to lose their homes upon renewal, Mr. Murphy suggested.

Read the full article in the Globe and Mail.

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.

Average Vancouver selling price down 9.8%

The problem with using averages is they can look terrific on the way up and horrible on the way down.  Remember all that talk about the ‘average’ Vancouver house now being worth $1 million?  One year later it’s apparently worth $735,315.  What will it be worth next year?

The average home price in Canada in April was up 0.9 per cent from a year ago at $375,810.

“It bears repeating that the national average price was skewed higher last spring by record level high-end home sales in Vancouver’s priciest neighbourhoods, and that a replay of this phenomenon was not expected this year,” said Gregory Klump, CREA’s chief economist.

Sales in Canada’s largest markets are having opposite effects on the national average, with slowing sales in Vancouver dragging, and soaring sales and prices in Toronto exerting upward pressure.

The average selling price in Vancouver was down 9.8 per cent compared with a year ago at $735,315, while the average price in Toronto was up 8.4 per cent at $517,556.

Read the full article is in the Vancouver Sun.