TTUL shared this graph of whats happening lately in the listing vs sales ratio. This is a sharp difference from the last few years, but it’s only been a short trend:
Hooray! It’s time for another Friday Free-for-all!
This is 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:
–Poor people make poor customers
–Is a condo a debt or an asset?
–Feel good now, pay later
–Blame busy August for slow September
–Phantom listing distort stats?
–Gregory Klump: no no no
–Vancouver Island Foreclosures
–Low rates create false sense of security
–Smiling with record debt levels
So what are you seeing out there? Post your news links, thoughts and anecdotes here and have and excellent weekend!
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%.
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?
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