I did not expect that. I know we had a few very large sales and expected that to skew things, however volume was so anemic and HAM buying so sporadic that I really did expect a flat to down reading.
Perhaps the benchmark will filter out the upper end buys.
HOWEVER....
...... if we do not have some good downward movement in the averages in Feb, I am going to quit posting, since the market seems to be defying all logic. The only thing I can say vaguely positive in this lunacy is that this will increase the ammunition for those who want tightening of mortgage rules.
We should be sitting around the 8 MOI range and eventually this must hit prices.
However I thought I would really have better news for you this morning.
I am sorry but you are looking at the wrong measure. Look at YOY. The market looks soft. Sales down, inventory up, prices flat for now. If this continues prices will definitely tumble on a YOY basis.
ReplyDeleteDon't forget all the recent news about the bubble on the MSM, plus the news about CMHC reaching its ceiling and insuring mortgages that shouldn't be, and you have the needle right here to pop that "balloon". Don't worry, by May we'll have a clearer idea and by September, we'll have a definite trend. It's all about patience... we've been waiting for that moment for so many years that a few months more to wait is really nothing.
ReplyDeleteMunmun has a point: I would not interpret the increase in the SFH average as an indication that the price of homes are increasing.
ReplyDeleteOf course the spin of the month will suggest otherwise--- but it is just that.
There are still some areas that seem to be functioning normally, in particular East Van and North Van. However,after that, the rest of B.C. appears to be in various stages of decline, and that includes Van West and Richmond.
I know that it is difficult to ask bears to continue to be patience. Particularity, since you are going to have to continue listening to those whose world view is derived from Bill Good.
That said, it would probably eleviate some anxiety if we examine Vancouver Real Estate within the context of other investment opportunities. Regardless of any potential upside, the RISK associated with purchasing a property in the lower mainland is just too great. Ask yourselves this: How well would you sleep at night if you were to purchase a home right now? Think of all the variables that could possibly go against you, or what if you got a job offer somewhere else, or your family expands, better hope that place is still liquid because yields suck. Once you buy not only have you locked in price, but more signifacantly, you have also locked in your lifestyle.
Remember, entry level properties are not increasing in value, this makes it difficult for move-ups, try living with two kids in a one bedroom condo--- many do in this town. If you bought a condo three years ago with the usual miniscule down payment it is unlikely that you would have made enough profit to cover your transaction fees, or paided down enough of your mortgage to give you a sufficient down for your next property--- even with these negetive interest rates.
Everyone who reads this knows someone that owns property and has a hugh mortgage. Want to trade place with them? And, even though they would never admit it, I would think that many of them would trade place with you, especially when they check their bank statements.
The point is, even though no one can predict prices there are many other options in life than purchasing GVRD dirt, doesn't mean you can't live here or buy property somewhere else if you must. Whatever you do, don't become the bear that capitulates, because we all know what happens next.
Next up... Cam Good. Egads! I'm holding my breath.
ReplyDeleteFish, I don't blame you for wanting to quit. Then again, can you really? It's so irritating you have to express it somewhere.
Although I am not anticipating prices to go parabolic or anything like that, I do think the spring/summer numbers will be more robust than most expect. With recurring visions of fall 2008 still fresh in everyone's minds, many have been far too bearish in recent months, however, that appears to be changing. Equity markets all over have rebounded sharply in recent weeks as global central banks continue to paper over all of their problems (what else is new?) while low interest rates are apparently going to be here for longer than expected. This improvement in overall sentiment will surely carry over to the RE markets as some look to capitalize on the small downturn in RE prices we saw in second half of 2011 while others contemplate taking on more risk and/or hedging themselves in the event inflation finally rears its ugly head in a big way over the next few years.
ReplyDeleteSorry guys, the world ain't comin' to an end...well at least not yet.
There are a couple of sales around $20 mills which will distort the averages for this month. However there is a perfect storm coming. I think I heard a pop in the housing bubble. Please continue with this blog
ReplyDeleteWell at least Victoria is down a good chunk on both Average and Median YOY
ReplyDeletehttp://www.vreb.org/mls_statistics/current_statistics.html
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CMHC is hitting its regulated limit. I'm expecting government will try to gently release some air from the bubble. Doubtful they can succeed especially in Vancouver which has it own specialized dynamic. Interesting times coming!
ReplyDeleteLovely numbers today.
ReplyDeleteI think we should all be cheering for it to go higher, like $10 million dollars average price. The bubblicious returns make an utter mockery of everything. Young people should get an education? Why? It can't increase their earnings enough to afford a house. Really, they should just pool their money and buy now. Forget about school, jobs, etc, because by the time you are educated and establish yourself you will be able to afford much less and maybe you will just have to leave. That's what 10-15% per year means!
ReplyDeleteVan proper is always the last one to fall.
ReplyDeleteYou can't make assumptions unless you see what the sales breakdown looks like for Van West and Van East. We could have had several sales in the $2MM range in VW and that'll skew everything. Not to mention the 2-3 really big ones.
Take heart - do not capitulate.
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