There are two sources for a more consistent tracking of house prices. One is the Teranet House Price Index, which tracks only properties that have at least 2 sales. This ‘sales pair’ approach tracks the effect of specific properties changing price each time they’re sold. There are two drawbacks to this index: It doesn’t track improvements to a property and it’s delayed by about 3 months.

The other approach is the REBGVs MLSlink HPI based on a hypothetical property that is averaged to specific traits: number of rooms, finished basement etc. The MLSlink HPI has been a consistent gauge of the local market since the mid 90s.

That’s changing now. Vancouver was the only market with a House Price Index, but the old index has been thrown aside for a new one from the CREA that is consistent between Vancouver, Fraser Valley Calgary, Toronto and Montreal.

For data-hounds, this means that you’ll not be able to directly link trends in the new index to earlier data. January 2012 becomes the zero month of this new system. Ladies and gentlenerds, start your graphs!

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After declining 12 per cent in 2010, residential unit sales through the Multiple Listing Service® (MLS®) in BC are forecast to rise by 3 per cent to 77,000 units in 2011 and a further 4 per cent to 80,000 units in 2012. However, BC home sales will remain relatively low by historic measures, falling short of their 10-year average of 87,600 units. While low mortgage interest rates are expected to persist through 2012 accommodating housing demand, headwinds in the global economy will act to restrain BC economic and employment growth.

BC economic growth slowed from an Olympic charged 3.8 per cent in 2010 to a forecast 2.1 per cent this year. Lackluster economic performance is largely the result of weaker than expected US economic activity, some belt tightening and deleveraging by households, and the Euro-zone debt crisis. Employment growth in the province is estimated to fall to 1.1 per cent this year. While emerging Asian markets have tilted some BC exports in an upward trajectory, domestic demand has stagnated. Retail sales in the province are estimated to increase just 1.5 per cent this year after climbing 5 to 6 per cent per annum over much of the last decade. Against this backdrop, moderate consumer demand for housing and relatively flat home prices are forecast through 2012.

Despite more moderate consumer demand, average home prices have climbed dramatically this year. The average annual BC MLS® residential price is estimated to increase 12 per cent to $564,600 in 2011. Rather than reflecting market conditions, the upward skewing of average price data was the result of a change in regional demand patterns and a shift in the mix of home types sold rather than as a result of a return to pre-recession market froth. By the winter months, most of the upward bias in average price data will have dissipated which will contribute to the average annual BC MLS® residential price decline of 2.5 per cent to $550,500 in 2012.

For flat to falling prices, that means months of inventory averaging about 6 for the entire year. That means longer times to sale and more delistings.

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Now I know that for most of you $133k is nothing, but for some of us that’s real money.

“A combination of more subdued job and household income growth, rising interest rates, the recent tightening in borrowing rules for insured mortgages and fewer first time home buyers are expected to be the chief culprits behind the slowdown,” TD says.

Vancouver’s real estate market will fare the worst in the next two years. TD predicts a 25.4-percent peak-to-trough decline in sales and a 14.8-percent pullback in prices by 2013.

Of course everyone knows that different housing sectors drop at different rates and TD is predicting the worst carnage in the Condo market. What do you think will suffer the largest price drops – west side houses or east side condos?

Hat-tip to Real Professional for the link.

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One Realtor that has consistently shared market data with Metro Vancouver residents is Paul Boenisch. Paul has been sharing daily sales and listing numbers with us for a while and is now establishing a market data section on his site along with a new partner.

At the moment their market trends section is in its beginning stages, but Paul has a well established history of reliably providing data and promises to continue posting daily numbers here as well.

For more Metro Vancouver market data you may want to also check out the Realtor sites of Agent Will and Larry. For the bigger picture there’s CUER/Sauder at UBC and for great analysis check out the Economic Analyst. Lauren and Paul will be posting local real estate market data here.

Do you have a favorite source of market data that isn’t listed here? Drop it in the comments below!

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Detached benchmark $797,868 +4% YOY
Apartment benchmark $387,115 +1.2% YOY

If you bought a Vancouver investment apartment a year ago and sold today, you almost made as much money as an ING savings account! (as long as you don’t count maintenance or transaction costs).

VHB points out that Rob Chipman has kindly made the full PDF of the report available on his website.

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There are a few odd spots though. Both Port Moody and Squamish are down around 11% in the last year. That’s a drop of around $80k. The big winner for 1 year gains? Coquitlam saw a greater than 14% increase in the benchmark price over the last year. Anything else pop out to you in that data?

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The overall REBGV benchmark price for all housing in all areas is down just over 1 percent which is a little over $10k. You’re not going to get a brand new car for that much, but you could get this sweeeet 1992 Toyota Supra replete with go-fast fin and still have enough left over for a great little road trip:

The big drop for the month was in the benchmark house price on the west side. You’re not going to want to drive that supra up to your west side bungalow, but with about $90k extra to spend you can arrive in style with this 2005 Aston Martin DB9:

The dramatic percentage drop prize goes to West Vancouver Apartments, where the one month drop saw a loss of $77,664 or 11.5%! Go pick yourself up an apartment and a 2007 Maserati:

Crashcow pointed out that there’s even more drama in the West Van Apartment benchmark if you go back another month to the April Peak.

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We’ve seen many days where price changes have exceeded 200. Even with listings for the REBGV area nearing 19,000 Mclovin points out that we’re consistently seeing about 1% of total inventory drop their price every single day. That means about 5% of all listings in Vancouver are reducing their asking price each week.

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Could we triple inventory this year?  To  do that we’d need to hit an inventory of 26,172 places for sale, which would be far higher than any year in recent memory.  Have we ever had that many units for  sale in Greater Vancouver?  The West Side has the biggest head start – they’re already close to 150% of the number of listings from January 1st.

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REBGV Inventory chart created by vibe in the VCI forum.

Wow, it was just six days ago that we had a 15k party in the forum to welcome the fifteen-thousandth property available for sale in the REBGV area, and now I see that we’re already closing in on 16,000 listings.

We’ve got two regular posters here who have been providing regular updates so data addicts can watch the listings grow through the day, let’s hear it for paulb and inventory!  As of the end of Wednesday listings sat at 15,789.

At this rate there’s a possibility that we’ll add more than 2000 listings in the month of April, despite a healthy number of sales.  We’ve already surpassed the supply available at this point in the last five years.  The only year that listings growth looked anything like this was during the micro-crash of 2008 where prices bottomed out at a 10-15% loss and have since recovered.

It looks like many people think that right now is a good time to cash in that million-dollar property.  Please no pushing or shoving, we are civilized people.  Head to the exits in an orderly manner, there are plenty of lifeboats for everyone.

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Based on $58,000 median household income in Vancouver using ING’s “how much can I borrow?” for 35 years (yes, 35 years – it’s what all the cool kids are doing nowadays).  Also assuming no other debts (ha ha) and a conservative $250 a month for property taxes or condo fees or both.

Prior to April 19, qualifying at 1.95% variable rate:

YOU QUALIFY FOR A MORTGAGE OF $415,270 WITH 5% DOWN!

After April 19, now having to qualify at 3.89% fixed rate:

YOU QUALIFY FOR A MORTGAGE OF $313,880 WITH 5% DOWN!

Holy foreclosure, Batman! That’s a 25% haircut off current prices!

Now let’s fast forward to the end of 2010, 4 successive 1/2 point interest rate hikes and you now need to qualify at a rate of 5.89%.

YOU QUALIFY FOR A MORTGAGE OF $244,287 WITH 5% DOWN!

That’s 41% less than 10 months ago, and we’re just getting started.

See, I told you math was fun.

Now, who wants to go out and get into a bidding war?

UPDATE: It’s been pointed out that CMHC currently requires the 3 year rate to be used, so the difference is not as extreme as the above example. DoDo1975 clarifies with this math:

A quick calculation shows that a family with absolutely zero debt making $90k a year could borrow $533,721.32 over 35 years today. All else being equal, after April that number will be $456,311.49 or approximately 14.5% less. This 14.5% is constant across all income levels.

If interest rates on the 5 year prevailing rate also go up 1.5% in the future, this translates into a 28% decrease in the amount someone can borrow compared to today.

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The REBGV December 2009 stats are out and the average Vancouver House price has reached a mind-boggling $952,927 despite less than peak population growth rates.

Don sent in the information above – this chart shows Vancouver average house prices from 1977 to 2009 superimposed on a graph of the BC population growth in percent from BC Stats.  The $300k price point correlates to 3% population growth.

One thing to keep in mind is that some divergence is only natural: one percent population growth in 2009 represents more people than 1% in 1977 because we’re starting with a larger base population.  It’s still interesting to see the correlation between population growth and house prices.  There was actually very high population growth in the late 70s and early 90s that relates to those housing booms.  By the middle of the 90s this growth had real house prices nearly back up to what they were in 1981,

You can see the correlation between the housing market decline in the mid nineties and the drop in population growth.  We’ve never recovered that high rate of population growth (as high as 3% in the mid nineties).  We seem to have peaked at 1.7% in 2008.  It will be interesting to see what BC and Vancouver population growth does going forward – will ‘everyone want to live here’ or will we see a a decline in population growth with fewer infrastructure project jobs and less construction?

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Lured by the correction in home prices and low mortgage rates, first-timers are jumping into buy in numbers that are now rippling across the market as evidenced in July with record numbers of sales for the month in both Metro Vancouver and the Fraser Valley.

Proof that it’s different here?  Or are these people looking forward to the same disappointment many in the US are experiencing?

Tsur Somerville, a real estate expert in the Sauder School of Business at the University of B.C. said there are signs of more stability in the overall economy, but it is difficult to see the pace of sales continuing at such peak levels.

“This is a very, very high level, and [long-term mortgage] interest rates have already started creeping up,” Somerville, director of the centre for urban economics and real estate at the Sauder School of Business said.

“It’s a wonderful, positive statement about people’s outlook for where things are going,” he added, “but it’s hard to put together the set of circumstances where sales of this level are sustainable and persistent.”

Tsur also says he doesn’t expect prices to turn around and plunge without a substantial change in rates.

Full article in The Sun.

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The decline of Lower Mainland real estate markets, which started with falling sales more than a year and saw prices drop as the global recession developed, levelled out in May.

Metro Vancouver recorded its best year-over-year sales increase in May since February 2008 with 3,524 sales reported through the Multiple Listing Service, 17 per cent higher than the 3,002 sales recorded in the same month a year ago.

The so-called benchmark price in Metro Vancouver, averaged across property types, hit $506,201 in May, which is still 11 per cent below the same month in 2008, but higher than the $484,211 recorded in January.

Metro Vancouver’s inventory of unsold homes in May stood at 13,641, a 16-per-cent decrease from a year ago.

At the risk of repetition, I’m just going to post one of our favorite charts from Sacramento Land(ing) showing their market going through the seasons over the last three years:

And here’s the up to date version they just posted:

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First let’s define affordability.  It is simply the percent of household income taken up by ownership costs.   For this exercise, I followed the methodology used by RBC (http://www.rbc.com/economics/market/pdf/house.pdf) because past information was readily available.  Household income is based on published numbers for Greater Vancouver (median) and mortgage costs are based on a five year fixed rate mortgage amortized over 25 years. You may argue that this is not representative of buyers for whatever reason, but to do so would be to miss the larger point, which is to simply compare where we are now relative to the past.

Second, let’s look at historic data.  I referenced the RBC to obtain affordability percentages (rounded to 5% increments) for various years, as follows (see page 5):

Condo       TH        SFH

1986      20%      25%      35%
1990      40%      50%      70% (Peak)
1992      30%      40%      50%
1995      35%      45%      65% (Peak)
2000      25%      35%      45%
2004      25%      35%      50%
2008      40%      50%      75% (Peak)

To define the norm, I looked to where affordability ranged for most of the time (say 80%) going back to the early 80’s. The historic norms for condominiums, townhomes and single family homes have roughly fallen between 20-30%, 30-40% and 45-55%, respectively.  These ranges ignore the ‘spikes’ of low affordability at peak years (e.g. spring 2008), but also the ‘trough’ of high affordability in the early 80’s.

And finally, where are we now?  Using $60k as the median household GVRD income (used by RBC), the latest MLS GVRD benchmark prices (Mar 2009) and the current five-year fixed rate mortgage (using the ING calculator), I come up with 27% for condominiums, 33% for townhomes and 51% for single family homes.

All of those values fall near the mid-range of historic affordability.

- Dave

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VANCOUVER, B.C. – March 3, 2008 – Residential housing sales in Greater Vancouver rose 94 per cent in February compared to the month before, with 1,480 sales registered in February compared to 762 sales in January, which was the slowest month for housing sales in 25 years. Over the past 10 years, February sales have typically surpassed January by an average increase of 53 per cent.

At the same time, new MLS® listings for residential properties continued to decrease for the fourth month in a row. New listings decreased 25.6 per cent in February compared to the previous year; 20 per cent in January; 8.6 per cent in December; and 10 per cent in November.

“There are terrific opportunities out there right now, but with property listings continuing to decrease, those opportunities may be available only for a brief window of time,” said Dave Watt, president of the Real Estate Board of Greater Vancouver (REBGV).

REBGV reports that year-over-year property sales in Greater Vancouver declined 44.7 per cent in February 2009 from the 2,676 sales recorded in February 2008. Year-over-year, those are the lowest sales figures for February since the mid-1980s.

Read the whole press release and view the stats in the PDF.

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We initially were interested in Charlottetown because we have some family there, and after researching it and visiting PEI, the vastly improved quality of life is what convinced us. Sandra and I want to have the time to be very involved in the lives of our children, and PEI is affordable as well as being beautiful.

I will miss the opportunity to work with many of you. I always got a kick out of meeting the person behind the avatar. However, I look forward to selling real estate in a market where I can more easily see value for the dollar. Selling first-time home buyers into a 200k house will feel good compared to the recent speculative mania that has infested BC real estate. And when you toss in beautiful beaches and the best golf in Canada it all made a tough decision a little easier.

You can read the rest of his farewell message on his blog.

I skipped town during the ‘Best of Vancouver’ awards party, so I never got to meet you Paul.  Best of luck with your move, I hope that you will keep us updated on how you and your family are enjoying your new home.

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The drop was slightly less than November ’08, falling $18,104 to a benchmark price of $648,421.  So far the benchmark has dropped $122,900 from the market peak last spring.

UPDATE: Bubble lad just posted a link to this story in today’s Sun: Metro Vancouver to see deepest property price dip.

Metro Vancouver’s home prices rose the highest in Canada’s property boom and will fall the furthest in its correction, real estate firm Royal LePage has forecast.  Royal LePage Real Estate Services, in its 2009 market survey forecast released Tuesday, predicted that Metro’s average home price will decline nine per cent in 2009 to $540,100 from a 2008 forecast of $593,500.

That will be almost three times deeper than the national average decline for 2009 of three per cent, which should bring the average home price down to $295,000 nationally.

Royal LePage CEO Phil Soper said that over the long term, home-price appreciation should rise in line with the rate that a city’s incomes rise.  “Over the last seven years, Vancouver prices increased at a rate significantly above the underlying appreciation of people’s incomes,” Soper said in an interview.

Don’t listen to the negativity.  Local incomes are irrelevant.  OUR market is different,it’s fueled by a special blend of upbeat naivety and magic pony-power.

Besides, it’s only money.

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There! That’s not quite so bad now is it?

(Yes, we used this same trick when comparing the Vancouver BC / Syndey Australia markets.)

Happy New Year Everyone!

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The Real Estate Board of Greater Vancouver (REBGV) held a version of the conference in the spring, but in a letter to prospective attendees and exhibitors, board president Dave Watt said a careful review of its sponsorship model led the executive to postpone the next edition until 2010.

“With REBGV members and prospective sponsors/exhi-bitors currently facing economic challenges, we believe forgoing the 2009 edition of our event is a prudent and responsible measure at this time,” Watt said in the e-mail.

When contacted, Watt declined to offer further comment on the cancellation.

Lower Mainland real estate markets hit the down stroke of their cycle this year, which has meant declining sales and falling prices.

Also in the news today, Richmond is the latest area of the lower mainland to see real estate prices drop lower than they were this time last year:

But it could be worse. You could be trying to sell a house on Vancouver’s west side where detached, attached and apartment properties are being sold respectively for 18.5, 19 and 19.6 per cent less than 2007.

Coun. Derek Dang, a Richmond realtor of 23 years, said it was only a matter of time before the city’s real estate bubble burst.

“It’s not that surprising as we were always going to get caught up like the rest of the world,” Dang said.

“Ultimately, we’re all part of the one big worldwide crisis. We’re good, but we’re not immune.

“It’s an international market we’re dealing in these days and when the global financial market gets into trouble it’s bound to affect us.”

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The benchmark price for a Single Family Home in greater Vancouver is now $666,525. Vancouver West is seeing the biggest drops in detached house and town homes.  Both of those benchmark prices are now down at least 18.5% year over year.  Overall the benchmark house price for Greater Vancouver has dropped $104,725 since May of 2008.  That’s a few free cars worth for those keeping track.  Thanks to cashisking and gadwin for pointing out these numbers.

Post any other interesting things you find in the stats package in the comments section below and I’ll update this post when I get a chance.

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Prices are falling sharply. Believe it or not the average SFH price fell 10% this month. Yes in 1 month. $745,778 for November v. $825,206 for October. The average has dipped 19% since March. It will be interesting to see if the benchmarks also make a dramatic drop.

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2008 - Vancouver House Prices Down almost 10% from the peak.

According to statistics released by the Real Estate Board of Greater Vancouver, the benchmark price for a single family home in Metro Vancouver is down 9.8% from the May 2008 price peak and down 4.7% from the October 2007 price so far.  From an article in the Vancouver Sun.

Greater Vancouver saw MLS sales of 1,364 units in October compared with 3,028 in the same month a year ago.

Single-family home sales across the region dropped to 493 units in October from 1,368 in October, 2007. Condominium sales were also down substantially to 493 units from 1,133 in the same month a year ago.

Dave Watt, the Greater Vancouver board’s president, said sales are not keeping pace with B.C.’s current economic conditions with low unemployment and stable interest rates.

“That’s a direct result of a loss of consumer confidence in the overall market,” Watt said.

In the Fraser Valley, the detached house price hit $513,892 in October, down 6.5 per cent from May and 0.6 per cent below the average price of October, 2007.

MLS sales of 768 in the valley were 48 per cent below sales levels of the same month a year ago.

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Last month we saw year-over-year price loss in many areas of the lower mainland.  These drops were seen across all types of housing: condos, townhouses and detached homes, but the most dramatic price drop was seen in Port Moody which saw an astounding year over year price decline of 20.4% for the benchmark price of a detached house.  That number is so large, I initially thought this may be a typo or error, but it has remained in place throughout numerous news stories and the original REBGV housing price index table.

So lets do a little experiment.  Lets see if the readers of this site, as a group, can accurately predict which area of the REBGV will see the largest percentage decline in the benchmark price of a detached home.  To clarify: Which area of the lower mainland will show the largest monthly house price decline during the month of October 2008?  Vote below and when October REBGV benchmark stats are release we’ll see how accurate we’ve been:

[poll id="30"]

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