Let’s carry on with our look back at September.
The official stats are now out from the REBGV and there’s some headscratching stuff in there.
Take this article in the Vancouver Sun for example:
Metro Vancouver home prices continue to drop as sales activity falls sharply below historical levels, according to the Real Estate Board of Greater Vancouver.
“We thought we’d see a slight increase in activity in September, but we didn’t,” said REBGV president Eugen Klein. “There doesn’t seem to be any urgency between either the buyer or the seller.”
I guess we’ve gotten so used to ‘increase’ (whether it’s prices or sales) that it’s confusing when the opposite happens.
And you’ve got to love that little bit of justification you see in every housing bubble, it goes a little something like this: “Well, prices might fall a bit in the poorer areas, but not in the hot areas!”
..but of course the hot areas are always the ones that fall:
Prices fell more sharply in expensive areas including Richmond, West Vancouver and Vancouver West, which saw a sharp run-up in prices in 2010 and 2011.
Vancouver West, for example, saw a 6.5-per-cent, year-over-year decline in the benchmark price of single detached homes to $2.09 million.
Tsur Sommerville has some theories about why the market is stumbling right now:
“This is the first time since 2007, 2008, when prices have come down by this degree,” added Somerville. “When you have nine months of continuous months of weak sales, it will show up on the price side.”
Somerville believes high prices, and reduced economic optimism, are behind the sales drop. “And cycles happen.”
The winning quote goes to Eugen Klein, who blames this market change on the federal government ramping back some of their market interference in the form of short amorts:
Klein said some of the fall-off in sales could be attributed to the federal government’s decision to eliminate 30-year amortization on government-insured mortgages.
“This makes homes less affordable for the people of the region,” said Klein.
Yes, as soon as house prices start to fall it puts buyers in a real pickle. If they fall too far no one will be able to afford a home.
…oh, wait. He meant ‘affordability’ as in huge long amortizations based on current low interest rates, not on overall price.
Some commenters here posted highlights from the data package. Not much of a name posted this breakdown:
Overall – benchmark down 0.8% YOY – Down 0.6% MOM
Detached – down 0.5% YOY – Down 0.7% MOM
Apt – down 0.7% YOY – Down 0.4% MOM
Attached – Down 2.7% YOY – Down 0.8% MOM
..and VMD posted this historical comparison of Months of Inventory (MOI):
MOI 2012 2011 2008
Oct 6.6 14.1
Sep 12.1 7.2 12.5
Aug 10.7 6.5 11.4
Jul 8.6 5.9 8.8
Jun 7.8 4.6 7.5
May 6.3 4.3 5.4
Apr 5.9 4.4 4.7
Mar 5.3 3.2 4.8
Feb 5.5 3.9 4.3
Jan 8.0 5.7 5.5
VMD also posted this list of areas with the biggest sales declines:
SFH Stats Sept 2012: (ranked by worst sales decline)
Sales:-50% YoY, -10% MoM
Ratio: 22% vs 32%
HPI: -4.2% YoY, -1.3% MoM
Median: -9.8% YoY, -1.4% MoM
Sales -49% YoY, -10% MoM
Ratio: 18% vs 35%
HPI: +4.2% YoY, -0% MoM
Median: -13% YoY, -6.3% MoM
Sales:-48% YoY, -6% MoM
Ratio: 30% vs 51%
HPI: +3.2% YoY, -1.1% MoM
Median: -2.5% YoY, -0.6% MoM
Sales:-37% YoY, +16% MoM
Ratio: 30% vs 51%
HPI: +3.6% YoY, -0.2% MoM
Median: +0.4% YoY, -3.7% MoM
Sales:-17% YoY, +15% MoM
Ratio: 27% vs 27%
HPI: -6.5% YoY, -1.3% MoM
Median: +1% YoY, +0% MoM