Tag Archives: sauder

BC, opinion, predictions, prices, rates

Can’t burst a bubble that isn’t there

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Some people are freaking out about a housing bubble in Vancouver.

Relax.

Tsur Sommerville of the UBC CUER Sauder school of business says there is no bubble and I bet the developers who sponsor the school would agree.

So it’s unanimous, no bubble.

But if you want a giggle check the spelling on the URL.. Sponsers? well I guess they study economics, not spellonomics.

Anyways, Tsur says no bubble in Vancouver.

“You can’t burst a bubble that wasn’t there,” said Somerville. “But you can have prices above where they should be and it not be a ­bubble.

“A bubble isn’t just defined by high prices,” he said.

Somerville identified a housing “bubble” as conditions akin to what was happening in 2007.

“It didn’t matter what the condo looked like or what it’s going to look like or who was building it, people were lined up around the block and snapping it up,” he said. “They were saying, ‘I’ll take 12, please.’ That’s more of a bubble environment.”

So there you have it.  We had a ‘bubble environment’ in 2007, but right now there is no bubble because very little is selling so we’re safe from a bubble that could burst.  We have prices that are above what they should be, but no bubble.

Read the full article in The Province.

BC, economy, hype, prices, supply

‘very clear signs’ of market slowdown

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Is the Vancouver real estate market cooked?

Sales are plummeting and the lower mainland is choking on inventory.

Tsur Somerville decided it’s time to sound the warning bell in the Vancouver Sun:

“We’re getting this consistently now,” said Tsur Somerville, director, centre for urban economics and real estate, Sauder School of Business at the University of B.C., after a monthly report by the Real Estate Board of Greater Vancouver showed a continued rise in listings as sales drop.

“We’re in a market that’s much slower than what we’re used to and I think that will transfer into much more sluggish prices, at best.”

According to the board’s report, released Monday, May sales were the lowest total for the month since 2001 and 21.1-per-cent lower than the 10-year average for May sales. Local home sales in April were also the lowest total for that month since 2001.

…yeah, that’s right.  Lowest since 2001.  And the remarkable thing is that the word the real estate board has chosen to describe this market is ‘balanced’.

I guess it is very important to keep your balance while you’re sliding down hill.