Tag Archives: sales

Realtors not hungry

RFM has updated the Realtor Hunger Index over at VancouverPeak.

The VANCOUVER REALTOR HUNGER INDEX is the percent of realtors who earned no commission income for the stated month. For August 2015 the VRHI was 49%. How does this compare? The 18-year average for August is 50%. At 49%, the 2015 August VRHI was higher than 8 years and lower than 9 years since 1998.

Despite turmoil in the speculative equity markets, an ‘official’ recession in Canada, oil prices that are plumbing the bottom of the barrel, foreign money-laundering investigations by the Canada Revenue Agency, corrupt politicians, greedy realtors, rapacious real estate marketing firms and a plethora of other factors that should cause a collapse of the Vancouver housing bubble, continued lower-than-average inventory and strong demand forced already high prices higher, especially in single family homes, where the HPI increased a whopping 17.5% from August 2014 to $1,159,600. Endlessly-low interest rates (and clueless BOC leadership), a flood of foreign investment money and knee-jerk buying by uninformed and delusional buyers, the August sales rate is extraordinary! And unsustainable. My official opinion of all this is available 24/7/365 for US$0.05! Call now! Operators standing by! However, for a more detailed and scientific analysis of the market dynamics of this firestorm, consult the DSM-5! (The Diagnostic and Statistical Manual of Mental Disorders (DSM-5), published by the American Psychiatric Association, offers a common language and standard criteria for the classification of mental disorders.)

Details and comparison data for 18 years at: http://vancouverpeak.com/showthread.php?tid=64

Why worry about home ownership rates?

Some people have expressed concerns about Canadian home ownership rates hitting the highs that were last reached in the US before their market crashed, while others have said they’ll do what they can to increase home ownership rates in Canada.

So why would anyone worry about high ownership rates anyways?

ILoveCharts posted their take in the previous thread, and that comment is reproduced below:

Why do we need to worry about high home ownership rates?

1) Because when too many people own a home, it reduces the mobility of our workforce. Given the spotty/local nature of our economy, it’s important for our economy for people to be able to move within the country to follow the hot spots. When commodities are hot, people need to move to the west and our dollar is higher so manufacturing in the east suffers. When commodities are doing poorly the dollar drops and people need to move east to escape the barren mines, forests and oil fields of the west. Until we see major investment in diversification at the provincial level (likely will never happen,) this cycle will continue. With high home ownership rates, the teeter totter has tipped but people are nailed to the plank and they are stuck.

2) Because there is a practical maximum and a natural median. There will always be people who can’t practically buy (they are students, in poverty, etc.) When you go through a period of above-average buying, you expand the size of the housing industry (construction, realtors, etc.) in a way that is not sustainable in the long run. Once you hit the maximum, it only has one way to go to get back to the median. In the process, a lot of people lose their jobs. Seeing as 70% of people own homes, they start to run into problems with their mortgage. You can try to move the maximum point a little bit with new lending rules.. but you can only play that game for so long. Are we going to bring back the 40 year mortgage? Shocking to hear that we are going to allow $70k tax free out of the RRSP…

3) Because home ownership provides little to no value to society when it’s more expensive than renting. We want Canadians to be saving their money and investing in Canadian companies through Canadian stocks. We want those vast sums of money to deployed in our markets – creating and growing enterprises. Ownership of dirt doesn’t move our country forward.

The price of land is arbitrary. We have the second lowest population density in the world. It’s an incredible sign of weakness that we have allowed ourselves to get into a situation where we each pay so much for little pieces of it. We need to blame ourselves and our governments. We need to blame ourselves for feeling entitled to increases in the value of our property. Businesses with growing cashflows deserve to increase in value. Dirt does not – at least not at this rate. We need to blame the governments for being so willing to satisfy our demand for their short-term gain.

Now we’re hooped. The NDP wants to bring in massive social housing projects, the Conservatives want to use what is basically a nationalized bank (CMHC) to backstop ever-increasing mortgages for an ever increasing portion of the population and the Liberals just want to legalize weed.

I honestly can’t think of a way out of it.

Ontario cracking down on phantom bids

Most real estate professionals are honest and unless there is a signed offer in place would never use the threat of a competing offer in an effort to drive up a property sales price.

But just to make sure a few bad apples don’t spoil the bunch Ontario plans to crack down on phantom bids.

The scam involves a sales agent hinting to prospective buyers there are other bids as a way to coax them to bid higher.“You say, ‘We’re expecting another offer. I do have another offer. You may want to go back to your client and make sure this is their best offer’,” says said Joseph Richer, registrar of RECO. “You are suggesting there might be competing offers when there may or may not be.”

With the new rules, “You cannot suggest or even imply that you have an offer unless you have one in writing, signed sealed and ready to be delivered,” said Richer, while adding there have been very few formal complaints about phantom bidding over the years.

Read the full article here.

FFFA! Sales, prices, rents and resources.

It’s that time of the week again…

Friday Free-for-all time!

This is our regular end of the week news roundup and open topic discussion thread for the weekend, here are a few recent links to kick off the chat:

GV: sales up, prices slip
PTT a ‘drag’ on RE economy
What are you paying for rent?
Vacant homes target by thieves
TD forecasts dip in Calgary
but they’re already down YOY

So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!

Where Canadian house prices are up or down

The latest data from the Canadian Real Estate Association is now showing about half of the countries markets with rising and half with dropping prices.

Toronto and Vancouver are doing well so far with a year over year increase of 4.9% and 1.8% .

The big winner? That would be St. Catharines with a YOY increase of 16.1%.

The overall average house price grew 3.1 per cent in the year to January, to $401,143. That’s the smallest increase since April, 2013, but it’s largely a story of two still-hot housing markets: Toronto and Vancouver. Strip out those two cities and average house prices are down 0.3 per cent over the past year.

Home sales, meanwhile, are 2 per cent lower than they were a year ago, CREA numbers showed.

Major energy industry centres like Calgary, Edmonton, Saskatoon and Regina saw some of the sharpest declines in housing demand, TD economist Diana Petramala noted.

There is “a widening regional wedge” in Canada’s housing markets, Petramala wrote in a client note, as oil-importing cities’ housing markets benefit from lower oil prices while producer cities struggle.

Read the full article here.