Yesterday we heard from a Vancouver Realtor about why condos aren’t selling.
And now there’s this article in the Vancouver Sun Buyers on the Sidelines as Market Slows.
Its all about the market slowdown – we’re now seeing the lowest number of sales since 2000 in Vancouver.
Nice houses that are priced right are selling within days, some in bidding wars. But anything priced too high or considered undesirable is apt to sit idle in this market, which is, according to the Real Estate Board of Greater Vancouver, witnessing the lowest total sales for the region since July, 2000. The Board reported 2,098 property sales in July, a drop of 11.2 per cent compared to June. It’s a drop of 18.4 per cent compared to July, 2011.
There are many anecdotal stories around the Lower Mainland about houses that have sat on the market for months, priced too high for the more price-conscious market. A six-year-old West Vancouver home on a 21,000-square-foot lot overlooking Capilano Golf & Country Club was originally listed at $3.695-million three months ago. The owners have reduced the price by $400,000 and it still hasn’t sold.
“There is a lot of product but it’s not selling for the price that people expected or hoped for,” says real estate finance expert Tsur Somerville, who is director of the University of B.C.’s Centre for Urban Economics and Real Estate. “People aren’t buying at the prices that are being set.”
Well here’s a funny thing about ‘the right price’ in a correcting market: it keeps changing.
I live in a BC market that is several years into it’s correction and I can tell you that the places that are selling are moving only at prices that are lower than the ‘right price’ a year ago and far lower than the ‘right price’ several years ago.
Ring the bell! July 2012 has come to a close.
Soon we’ll see the press releases from the REBGV (and more entertaining from the GVREB) but it’s starting to look a lot like 2008 again.
Sales have dropped off dramatically, we’re down about 16% from last July and about 9% from last month.
Listings are growing slower than they did in the spring, but MOI is close to what it was in July 2008 according to VMD:
July 2012 Sales:
According to madashell we needed to see less than 115 listings on the last day of the month to have lower sales volume than 2008.
It looks like we just squeaked under that, Paulb says we saw 106 sales for the day. Here are the rest of the stats for July 31st:
New Listings 186
Price Changes 137
Sold Listings 106
Inventory posted this update to detached sales in Richmond and it’s astounding.
We’re not at the end of the month quite yet, so this number will rise, but we would have to have an incredible amount of sales to not have July 2012 register as an all time record low number of sales.
Here’s the comparison for July detached sales all the way back to 1995, we’re currently sitting at about half of the low normal level:
Richmond Detached July
1995 = 108
1996 = 117
1997 = 122
1998 = 86
1999 = 113
2000 = 96
2001 = 183
2002 = 154
2003 = 209
2004 = 129
2005 = 170
2006 = 97
2007 = 175
2008 = 92
2009 = 221
2010 = 107
2011 = 123
2012 = 54 (-56%) ***July 29
Just what is happening there to the south of Vancouver? Have houses in Richmond fallen out of favour with buyers for some reason?
They aren’t making any more land, but they are making more condos. Lots more condos.
Real estate market team MPC Intelligence started tracking new condo projects in Vancouver in 2005.
They just recorded the busiest six months on record for announced new concrete condo projects.
This despite a recent slow down in the presales market.
A new wave of projects is expected in the fall.
Hancock said the pace of pre-sales has slowed in the last two months, but he expects a “large wave” of new launches in the fall.
Hancock attributes the slowdown to developers postponing projects because of market conditions, and some projects being delayed in the approvals process.
He said projects priced right and in the right location — near rapid transit — are doing well, citing strong sales at the Solo District condo project in Burnaby that started pre-sales this past weekend.
Hancock noted that 55 per cent of the concrete condos introduced to the market this year have been sold, with most sales in the first quarter and “the second quarter showing slower uptake.”
He also said it’s “too early to tell” if the slowing resale market is a factor in developers delaying projects.
The presales market can’t be doing too bad when we have big projects like Marine Gateway selling out in 4 hours. The odd thing is some people are reporting seeing bus ads for this development.
Why spend money advertising something that isn’t for sale anymore? Can anyone confirm these ads?
The good news is they have a plan to deal with the smell.
What does ‘Buyers market’ mean to you?
Is it a market in which the buyer has lots of choice or gets a reasonable price?
..because they aren’t the same thing.
Now that prices are dropping from their record highs on Vancouver real estate, we’re seeing the term ‘buyers market’ bandied about in the media a lot. And with a huge number of places for sale and actual transactions falling to a 10 year low there’s lots of choice.
But prices are still near record highs!
Real estate is a slow illiquid market, it takes LOTS of time for trends to move through. Just take a look at the USA, there are some people thinking they’ve hit bottom in some markets after SIX YEARS of falling prices. Don’t expect deals within a few months, or even a few years.
Real estate marketers will use the term ‘buyers market’ a lot in the coming years, because they make money off transactions. If it’s not a good time to sell it must be a good time to buy right?
There is one nice thing happening with the shift in the local market though: the Vancouver Sun is starting to publish a bit more variety when it comes to RE market opinion:
Investors in stocks wouldn’t consider a drop in volume to be a buyer’s market in the absence of price changes. The adage that volume precedes price instructs investors to be patient. There’s no compelling reason for real estate buyers to act differently.
Bravo Vancouver Sun, Bravo.