Thursday, September 27, 2012

Sorry about the lack of posts....

Just back from a tour of the Gulf Islands. These places are really ground zero for the sales crunch.

The dynamic of each Island is different. The ones with limited infrastructure seem to be in the biggest trouble. Eg Galliano...lots of properties for sale, some look to have been abandoned by owners and are getting shabbier by the day...

Pender Island is loaded with listings too, some subdivisions seem to have almost every third house for sale.  Pender has some infrastructure - supermarket, doctor etc like Saltspring which is a like a small town, but even there listings have exploded and sales seem to be few and far between.

The market for these Island properties is a very interesting. These Islands used to be the hang-outs of the alternative crowd, especially Hornby and Galliano but they have long ago been pushed out by wealthy Mainlanders and US buyers driving to their week-end places in their Sequoias. The latter have been missing the last few years due to the weak USD and the US recession. Properties are much cheaper in the US Gulf Islands.

Saltsrping was always the artsy place and still is an artistic hub, with a few farms and lots of retirees. However for a number reasons the Islands have been on the wane for several years...

BC Ferries fees have been moving up..
The US buyers have disappeared and are net sellers from what I hear.
The peak for the family recreational cabin peaked with baby-bommers aging
The older baby-boomers want to be close to doctors, hospitals and services.
Pressured life styles leave little time to wait for an hour, get on a ferry for 3 hours and then return in two days.

In Summer when the tourists arrive, all the listings come out hoping to hook one of them. Buy in haste and repent at leisure.

Wednesday, September 19, 2012

Banks Flip...flop

Last year there was no bubble, then there would be a mild correction, then a bigger one and now maybe not. 

That sort of summarizes the sequences of housing reports from the big banks. 

I guess no one really has a clue, but it is not acceptable to say that!

Here is TD in June calling for a 15% drop across Canada (that would be much larger in Vancouver) and would be financially very significant.

Now they say the drop will be 10% and maybe even flat because things are getting better.

Not so says the Royal, things are getting worse!

Scotiabank's CEO just said today- 'we get a soft-landing at worst'.

So place your bets and take your picks. We are certainly seeing all the metrics eroding here and prices heading down. Hard to see what the catalyst for a renewed rise here would be?

We have Provincial debt exceeding expectations, we have a Chinese slow-down, we have a change in psychology and the Bank of Canada and Feds are on the side of caution now (not that there is much more they can do anyway having used of most of their bullets)

Saturday, September 8, 2012

Fraser valley and then some...

Fraser Numbers are out. Terrible sales numbers, and MOI of 10 and yet the HPI is still robust- no kidding!

Anyway to be fair to the Fraser Valley, the prices never got as high as Vancouver so a gentle correction would make more sense.

Here is the news release:

News Release
Fraser Valley Real Estate Board
For Immediate Release: September 5, 2012
Home prices resilient despite lower sales in the Fraser Valley
SURREY, BC – In August, sales on the Fraser Valley Real Estate Board’s Multiple Listing Service® (MLS®) ranked the third lowest for the month in the last decade – after 2008 and 2010.
Last month’s 1,073 property sales represent a 20 per cent decrease compared to the 1,341 sales during August of last year and 23 per cent fewer than in July. In 2008, the Board processed 910 sales in August, and in 2010, 997.
“It was a slower August, but nowhere near historical lows for our Board so it’s too soon to tell if it’s a sign of a longer‐term trend or if buyers and sellers in the Fraser Valley finally enjoyed a bit of summer,” explains Scott Olson, FVREB president. “We do know that our economy currently remains fundamentally strong with stable mortgage and employment rates; and, our region in particular has some of the fastest growing communities in the Lower Mainland.”
Olson says, “And we’re seeing evidence of that growth in the sales of more affordable, attached properties in the Fraser Valley. For example in August, apartment sales went up significantly in Central Surrey and Abbotsford and remained on par in North Surrey and Cloverdale compared to last year, suggesting that first‐time buyers are continuing to find opportunities.”
Similar to sales, the Board saw a decrease in new listings. We received 2,406 in August, a decrease of 8 per cent compared to August 2011 and 18 per cent less than we received in July. This caused the number of active listings to decrease month‐over‐month, however the 10,366 active listings at month end still remained 3 per cent higher than the 10,074 listings available in August 2011.

Across the Fraser Valley, the benchmark price of a single family detached house in August was $551,400, an increase of 3.5 per cent compared to $532,700 in August 2011.
For townhouses, the benchmark price in August was $303,000, a decrease of 0.7 per cent compared to $305,200 during the same month last year. The benchmark price of apartments in Fraser Valley in August was $206,600, an increase of 3.4 per cent compared to $199,800 in August 2011.

Olson adds, “Overall, we’re seeing prices stay resilient, however in almost half of our communities, the three‐ month trend is showing a decrease in prices while the other half is showing increases so for a detailed market analysis, check with your local REALTOR®.”

Here is the whole stats package, look how far into buyer's market the sales stats are (the second graph)

HAM, HAM where for are't though?

Our markets have been HAM deficient for the last few months, which explains the absolute collapse in sales in West Van, Westside and Richmond. 

The Chinese stock market has been at a 52 week low, their economy has been under strain and Canada has finally started extraditing big fraudsters who found permanent refuge here.

Maybe this will change somewhat. The Chinese leader just announced a huge infrastructure spending package and their market reversed the downturn and rocketed up 2.5% in one day. We will have to see if this reignites the easy money buyers into our markets.

Thursday, September 6, 2012

Robert Shiller hammers Vancouver home prices

In his usual rather gentle and non-dogmatic way

Worth listening to. Lets hope the link works, BNN links tend to be hit and miss.

Wednesday, September 5, 2012

No way to put lipstick on this porker

Home sales are in a slump.

REBGV news release

Home sellers continue to outnumber buyers in Greater Vancouver’s summer housing market
Home sale activity remained below long-term averages in the Greater Vancouver housing market in August
The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales of detached, attached and apartment properties reached 1,649 in August, a 30.7 per cent decline compared to the 2,378 sales in August 2011 and a 21.4 per cent decline compared to the 2,098 sales in July 2012.

August sales were the second lowest total for the month in the region since 1998 and 39.2 per cent below the 10-year August sales average of 2,711.

“Home sales this summer have been lower than we’ve seen for most of the past ten years, yet we continue to see relative stability when it comes to prices,” Eugen Klein, REBGV president said.
New listings for detached, attached and apartment properties in Greater Vancouver totalled 4,044 in August. This represents a 13.7 per cent decline compared to August 2011 when 4,685 properties were listed for sale on the MLS® and a 15.8 per cent decline compared to the 4,802 new listings in July 2012.
“For sellers it’s critical to work with your REALTOR® to understand today’s market and to develop the best strategy for selling your home,” Klein said. “On average it’s taking about two months for a home to sell on the MLS® in Greater Vancouver today.
At 17,567, the total number of residential property listings on the MLS® increased 13.8 per cent from this time last year and declined 2.8 per cent compared to July 2012.
“Today, our sales-to-active-listings ratio sits at 9 per cent, which puts us in a buyer’s market. This ratio has been declining in our market since March when it was 19 per cent,” Klein said.
The MLSLink® Housing Price Index (HPI) composite benchmark price for all residential properties in Greater Vancouver is $609,500. This represents a decline of 0.5% compared to this time last year and a decline of 1.1% compared to last month.

Sales of detached properties on the MLS® in August 2012 reached 624, a decrease of 38.8 per cent from the 1,020 detached sales recorded in August 2011, and a 30.1 per cent decrease from the 893 units sold in August 2010. The benchmark price for detached properties increased 0.2 per cent from August 2011 to $942,100.

Sales of apartment properties reached 725 in August 2012, a 24.1 per cent decrease compared to the 955 sales in August 2011, and a decrease of 22.5 per cent compared to the 935 sales in August 2010. The benchmark price of an apartment property decreased 0.9 per cent from August 2011 to $370,100.

Attached property sales in August 2012 totalled 300, a 25.6 per cent decrease compared to the 403 sales in August 2011, and a 19.8 per cent decrease from the 374 attached properties sold in August 2010. The benchmark price of an attached unit decreased 1.9 per cent between August 2011 and 2012 to $462,300.

Posted: Wednesday, September 5, 2012

9% of inventory selling translates to an MOI of 11.

Saturday, September 1, 2012

Larry has the averages out

They are up for all categories, even with MOI at 11 and with sales down a whopping 25-40% from last year. Some areas will show even higher MOIs for August 16+.

This shows us what a big effect a few big sales are having. The high end buyers are not concerned about the local economy, CMHC tightening or rising rates, they are actually getting some good deals (15% + off in some cases ) but the numbers are still big enough to skew things.

I wondered if this would happen:

What should we expect for August's numbers?

I would be very shocked if the HPI does NOT show a good tumble. If not, then I will be even more suspicious about it's validity.

The averages are more difficult to forecast. Some big sales, but the majority have come in at the low end, even in high priced neighbourhoods.

11+ MOI is where we be at.

Have an excellent long week-end.

I doubt may Realtors are happy with a market that provides such diminished commissions.

And as my last post says, the speculative money from Mainland China is drying up (for now).

Now the HPI is different. If the HPI has any validity at all in looking at the 'typical' Vancouver residence, it should show major declines in my opinion.

One reason the Chinese have backed away from our RE...

Is this 

While the US stock markets have been motoring to new highs, the Shanghai bourse has been hitting fresh 52 week lows. 

 Some of the easy money brought here came from the huge gains insiders got for cashing out their holdings in the newly public companies. The appetite for this type of speculation has been waning in recent times as the Chinese economy has been cooling (still booming though compared to us or Europe).