Whatever your religion happens to be.
Be you a bear, bull or agnostic.
Whether you’re an internet millionaire or a carrying a debt load of 165%.
You might be a real estate salesperson, a bearish economist or a somebody just trying to get by.
The most important things in life don’t tend to end up on a financial statement or notice of assessment.
Whatever your situation is, thanks for visiting VCI and taking part in the conversation.
You deserve a holiday, and we hope you have a good one!
Previously we highlighted b5baxters comment on the 19 months that have elapsed since Vancouver home prices have peaked (according to the REBGV home price index)
Of course there are a lot of variables in the housing market, so lets look just at condos, which Crabman has ever so helpfully run the numbers on:
I calculated the bottom line if someone bought a benchmark condo 4 years ago with a 10% DP and a 4% 30-yr mortgage. I took into account all carrying costs, rent savings and principal pay down. I also assumed rent, prop tax and condo fees increased 4%/year.
Oct 2009:
Benchmark price: $380,975
Mortgage balance: $342,878
Equity: $38,098 (10%)
Est. Rent: $1,100
Mortgage: $1,637
Condo Fees: $200
Prop tax: $89
Monthly loss: $826 (extra costs of owning vs. renting)Oct 2013:
Benchmark price: $365,600
Mortgage balance: $317,253
Equity: $48,347 (13.2%)
Est. Rent: $1,287
Mortgage: $1,637
Condo Fees: $234
Prop tax: $104
Monthly loss: $688Over those 4 years, equity only increased $10,249. But the extra monthly costs of ownership over that same period were $45,498, so the owner would have saved $35,249 by renting.
So it looks like the current ‘ownership premium’ for someone who bought a Vancouver condo in 2009 is just over $35k. Anybody see any problems with those numbers?
According to Paulb the listings odometer just rolled over the 13,000 mark.
As of last night the inventory count hit 13,035.
Of course that means it’s time for a party.
Any one think it’s possible that we might hit 14k before the month end expiries kick in?
Crashcow points out that it could happen:
Avg daily inventory growth this month: 125
Projected month-end inventory: 14,406
Although possible doesn’t mean probably. Historically sales pick up past the halfway point in January according to VHB:
For the quant-minded, some numbers!
period sell list percent 2011Jan1sthalf 70 216 33% 2011Jan2ndhalf 110 260 42% 2012Jan1sthalf 57 271 21% 2012Jan2ndhalf 90 277 32% 2013Jan1sthalf 54 227 24%So, if this January follows the pattern we can expect about a 50% increase in sales in the 2nd half of the month. This would mean we should average around 80 sales/day in the 2nd half of Jan2013. Listings might tick up a bit, but not by 50%.
It’s that time of the week again, time to our regular end of the week news round up and open topic discussion thread for the weekend. Here are a few recent links to kick off the chat:
–Great Canadian crash of 2013
–Permits plunge into basement
–BC condo market on fire
–Prices falling faster than USA
–Sales people say soft landing
–Fence-sitters will be sorry
–Price reductions by area
–Inventory Graphs
–Construction quality issue
–Ending debt binge leaves $50bn hole
–Ping Pong Pricing Principle
–
So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!
Dropping prices on condos are being blamed for pulling down home costs in Vancouver.
..because what could be worse than more affordable housing?
Prices on all housing types are falling with forecast for more price drops, Royal LePage is forecasting a 3% drop overall in 2013 but the largest drops so far are being seen in the condo market, which have fallen 3.6%.
“Buyers are waiting for that big decrease to happen but I think if they’re going to keep waiting for that, chances are they aren’t going to see it,” said Todd Talbot, realtor and host of W Network’s Love It or List It Vancouver.
That’s because industry experts say some sellers aren’t interested in making significant price reductions, and are taking their homes off the market.
“They don’t have to sell,” said Brendon Ogmundson, an economist with the BC Real Estate Association.
“You don’t find a lot of extra listings unless people need to sell quickly because of some financial catastrophe, and that simply isn’t in the cards, so what we’re going to see is normal demand and supply dynamics.”
Now I’m curious – what’s you best guess. Does the BCREA economist really believe that prices are set by people taking their property off the market, or by the properties that are sold?