Lots of stats for the numbers nerds to play around with.
HPI down 2.8% from peak. (Hey the peak is behind us)
Sales down almost 50% from 2009- we already knew that.
MOI for JULY was 7.2
Some HPI comparisons Between June 2010 and July 2010.
Detached July: $793,193 June: $795,025
Condo: July: $387,879 June: $391,528
Attached: July $490,995 June: $492,861.
All DOWN
The importance of timing in the housing market is demonstrated in the line below:
Residential Greater Vancouver $577,074
1 year change = 9.1% 3 YEAR CHANGE =9.1% 5 Year change = 46.0%Buying a year ago gave you as much appreciation as buying three years ago. that's what a steep drop does for you.
And several areas like West Vancouver which saw nutty pricing a few years ago are still down in price from 3 years ago (with lots of price recent price reductions to still factor in)
We are down anything from 3-6% from the peak a few months ago depending on whether you follow average or HPI.
Neither are ground breaking. However a few points here:
1) It shows that hosuing falls , DESPITE all the pundits and experts.
2) This is exactly what we want...a slow decline.We want a market which allows buyers and sellers to transact based on supply and demand.
NOT for the Government to change the rules and pull the carpet from under the buyers, as soon as they have an upper hand (after years of being in the loser camp).
That is EXACTLY what they did in 2008.
If we had a falling-off-the-cliff event in housing - you can bet that Flaherty and Campbell and their gnomes would be hard at work trying to throw our money at sellers.
SLOW AND STEADY WINS THE RACE...
BTW- anyone looking in the market- don't think the listing price is written in stone or based on soem sound scientific formula!
ReplyDeleteA house listed in West Van for just over two months, just cut it's price for the first time...by wait for it...20%!!!
It doesn't matter what we want, the market is going to crash fast and hard.
ReplyDeleteI gotta agree with anon. If drops continue, I dont see them being slow. Panic will set in for investors once they realize that price appreciation probably wont happen in the way it has been happening and will sell their properties that bleed cash every month. Then regular sellers will have to compete with the investors and the race to the bottom begins.
ReplyDeleteOf course, this is IF prices declines continue. If prices find some sort of support through the government or harry potters magic wand then there may not be a US style crash.
Either way, what we want has nothing to do with what actually happens.
True enough Davers and anon.
ReplyDeleteIf the inventory that has been pulled off/with-held comes back on we will see some major prices drops.
Especially since we now have 3 head-winds:
1) rates are as low as they can go.
2) The CMHC Monster has been reigned in somewhat
3) HST is upon us.
However my words are meant to calm the nerves of bears who have been whipped up into a lather hoping for a crash. A crash will only happen if there is widespread crisis like in 2008. Such a scenario would beget instant government intervention and many bears may actually lose their employment.
So I am happy and with slow and steady and hope it continues that way. However I will take whatever the market gives us.
Personally I am expecting the declines in prices and sales volumes to accelerate as it did in the fall/winter of 2008.
ReplyDelete"many bears may actually lose their employment."
ReplyDeleteHere's the thing: if you need to rent money, you need a source of income to do it. If you are 100% cash, you can buy regardless of your income.
Got cash?
ckung, I think if sales remain slow and inventory relatively bloated, price drops will accelerate in the coming months, though probably they won't exceed 2.5% max, month-over-month, unless there is markedly worse months-of-inventory
ReplyDelete