Tag Archives: west side

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A Question about Averages

119
119 Comments

Can somebody please elaborate on the anticipated average price increases from Friday’s Free for All comments section, with some areas, such as Vancouver West, projected to a 25% increase for SFH MOM?

I rent on the West Side and can assure you that very few of the properties that I drive by on a daily basis are selling.

Most sit stagnant for many months. Furthermore, anything that does actually sell, seems to sell only after significant price reductions.

My limited understanding is that prices typically start to trend downward at a MOI of 6, and at a MOI of 8, price reductions are more pronounced. So with a current MOI of approximately 12 for the West Side (depending upon source), close to record low sales, and a very high inventory level, I find it very hard to believe that average prices will be up 25% this month.

Would that not bring the West Side to an all time record high price?

If this is just a reflection of more expensive homes selling, while the ‘cheaper’ West Side homes sit idle, then is the average price really a good indicator or measure of anything?

Either way, seems discouraging that with record low sales, record high inventory, record debt levels, the new mortgage rules, and all the global uncertainty and doom and gloom, prices could go up at all, let alone 25% in a single month.

Should I just give up on a correction, which in my mind, is long, long, overdue?

advice, BC, prices

Sales plunge to 10 year low

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153 Comments

The June news release from the REBGV has been released and it looks like the market has turned a corner.

As all of you regular readers here know, sales have plunged to a 10 year low.

The HPI benchmark price has also dropped from the previous month in some areas.  Oddly enough it’s houses in the desirable west side and Richmond which have both dropped about 2% from May.

Best Place on Meth summarizes the total changes for all areas:

Summary of June HPI:

All -0.7%
SFH -0.6%
Apt -0.9%
T/H -0.3%

I was expecting no change for June and declines to start next month so this is a bit of a bonus.

Yes the hot summer market has turned out to be anything but.  As prices drop a few percentage points from their all time highs some are calling this a ‘buyers market‘.

Meanwhile at least one local realtor has sold his own house and says it’s time to cash out.

 

BC, opinion

More racism debate in the Courier

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101 Comments

The courier is getting lots of linkage from us as of late, but they’re playing both sides of this issue pretty well.  Is it racist to say that we should have foreign buyer restrictions or that absentee owners can kill a neighborhood?  Mark Hasiuk says NO.

Christy “Families First” Clark, a committed globalist, won’t restrict foreign ownership in B.C. Mayor Gregor Robertson, who slobbered over Beijing during a 2010 “trade mission” to China, won’t reform the tax code to accommodate the new normal. Which means foreign real estate investors pay the same rate (4.2 per cent) as local homeowners, not the business rate (18 per cent) they should.

Read the full article here.

BC, data, predictions, supply, west side

West side a fragmented market

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98 Comments

I think this comment from zrh2yvr is worth highlighting, so I’m pasting it into the submission page!

OK – Some more interesting data – Again just the facts.

Van-West Detached, a market which seems to be suffering, can be described as three markets. One where there are over 350 units for sale in excess of 3.2 million with MOI of over 18 months, 185 units for sale at 1.9M or less with a MOI of 3.8 months and approx 340 units for sale between 1.9M and 3.2M with MOI at 6.7 months.

For units priced at under 1.9M, there is a severe lack of inventory which could be a reason for lower sales volumes. One has to wonder however, what will become of this high-end with properties for sale over $3.2 million? They are selling only at a slow pace but at 18 months, I would say many sellers would be happy to just wait for thay buyer.

Meanwhile, inventory is creeping up. Just like Richmond however, it is creeping up only in the low-mid range of the properties. The number of properties for sale with an age of up to 10 years has not changed since January (approx 230 units). However, in the range of 10-115 years old, overall, inventory is up by 80 units or 17%. In the tear-down category (those with age of 999), there are 9 more units or 11% so this could also be seen to have increased.

What is this saying? I would say that until the top starts to fall, there is not much down side in the Van-West market. Not much upside either as on the higher-prices, there are many many choices.

When looking at MOI, Given that sales of the higher-end properties have been picking up, we are seeing MOI for the new inventory decrease where now there is only 13 months for homes up to 5 years compared to approx 17 months in January. This is not a great level and is truly one to put downward pressure on prices. One has to wonder how many of these properties are held by speculators or builders who need to sell.

Finally, what areas are we seeing with deterioration in MOI?

Oak – Now at 10 compared to 5
Kerrisdale – Now at 10 compared to 7
South Granville – Now at 14 compared to 12
Cambie – Now at 9 compared to 6
McKenzie Heights – 8 compared to 6

Shaugnessy has highest MOI still but has improved to 16 from 18.

The most important ares with low inventory and tight MOI are:
Kits – 3.7 months now compared with 3.4 previous
Dunbar – 4.4 months now compared with 6.2 previous
Point Grey – 5 months of inventory same as previous

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So overall, we are seeing the market change. The foreign buyer and the top-end buyer are not in the marketplace in sufficient numbers to acquire the high-priced inventory that is for sale. Limited numbers of units for sale under 1.9M are creating tight supply, but also low sales volume. However, ALL inventory increases have occurred in the lower priced ranges and are not evenly distributed throughout the entire market. It is not clear what we will see next. Perhaps it will be recent low-priced land plays coming back on the market as they realize there is too much competition on the new-build market. Perhaps we will see some high-end builders having to reduce to clear their inventory.

Either way – it is going to play out slowly until there is a change in the credit markets that changes the access to credit for all buyers.