Monday, July 1, 2013

Parsing Larry's numbers

Kudos for the hundredth time to Larry for getting the numbers out so soon.

What do we find for June.

1) The ramp up in sales we noted here and elsewhere is reflected in the numbers. Sales are up quite a bit from June 2012. Inventory is pretty flat YOY except for apartments.

2) Average price (which always shows a lot of noise) showed SFH taking a big 4% drop. However apartments have gone the other way showing a big jump from last month.

What can we deduce from these numbers.

With a lower average and yet sales were up. This would suggest that the lower end of the market was more active this month, maybe on interest rate fears. The higher end is unlikely to be much concerned whether the interest rate is 2.6 or 3.2 % , you can either afford a $4 Million house or you can't.

Last June was a very weak month, this June was more resilient. As I said in the last post, this is crunch time. Is this yet another rebound or was this just an interest rate panic.

MOI SFH 7.1
MOI Attached 5.6
MOI Apartment 6.3

12 comments:

  1. Bulls like to keep asking bears to explain why there haven't been any massive price reductions. However, I think it is more appropriate for the bears to ask the bulls why hasn't there been any price increases over the last four years.

    If you bought six years ago, good for you, but why would anyone want to buy now? Because prices aren't going down? Ok, but when are they going to rise?

    The market looks exhausted to me, lower listings included. In other words, the market has no momentum. That said, there is no high pressure selling yet, people are still willing to wait in hopes of getting their price. I know someone who is about to take their listing off and wait for next year.

    But, while the bulls continue to sit in flat market purgatory, I suggest the bears look at other markets that are currently rising. After all, the idea is to make money, and money is not being made in Vancouver real estate. So why pay a premium to invest in a speculative market with absolutely no earnings protection? Particularly, when there are other options.

    The greater fool strategy only works if price appreciations exceed transaction costs. And, it's not working. Sorry bulls, flat's not good enough, show me the money, after your commission that is.

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  2. Clearly a few expensive condos sold that skewed the average price. Also I'm betting lower priced houses sold, which shows the 19% increase in detached sales. I'm sure this rebound is just a few fools reacting to the rise in fixed interest rates. All and all these numbers don't look much better than last year and last year was terrible for r/e. In my area of South Delta, prices for condos are way down, anyone who bought in the last four years is probably down 20% at least. Detached properties are down at least 10 to 15% over the last two years. Theres a reason we don't see median prices. All you have to do is keep track of places in various areas over the four years to see prices have been dropping. The bulls will tell you when they see the odd house sell for alot, but thats one in a hundred houses, the local r/e market doesn't seem to avertise houses and condos that are selling alot below assessed value. My brother bought in 09 for 550. As of right now, he would be lucky to get that back, but if he would of sold in 2010 or 2011 he might of sold for the mid 6's. Alot of people are living in the past and are unwilling to accept the fact prices are dropping and unless you are willling to take off 15% than what you thought the value was a couple years ago, you will never sell.

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  3. Didn't a $25 million condo sell this month?

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    Replies
    1. True indeed.Thanks for pointing that out. Both Larry and I missed that. I don't know the date it closed. it was first reported June 4th, so it is likely that it sold in June.

      That one transaction adds almost $25K to the average price.

      However there was still a bump up in apartments as the difference between inventory 2012 to 2013 is -13%

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    2. I could understand Larry's omission, figured that you would have picked that one up. If I am not mistaken there was a coinciding sale for the staff in the same building at the same time.

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    3. @PS Dave
      Don't want you thinking Fish isn't on his game. :")

      According to MLXchange Attached/Apartment accounts - June recorded these top 10 sales which ranged from $3.9m to $1.5m.
      However, that does not preclude an Exclusive sale which would not be recorded on MLS.

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    4. Thanks for the clarification Larry. If the $25 M sale went through off the MLS then the apartment average is more reliable. It still boggles my mind who can throw down $3.9 million for an apartment let alone $25 million. I suspect not all of them are just laundering off-shore money, I suspect there are some very wealthy locals, more than most of us would have thought.

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    5. I was at a BBQ on Sat. there certainly was chatter about downsizing from the SFH to a condo and banking the difference for cash flow.

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    6. @PS Dave

      Curious question. Could you guesstimate the age group at the BBQ?

      I'm wondering if these are 'boomers' talking who might be downsizing because
      1) they want to help the kids or
      2) realize it is time to cash in for their pension or
      3) non boomers about to lose job or find themselves over extended

      Thanks

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  4. CHECK CRAIGSLIST RENTALS YOU WILL SEE 100'S OF LISTINGS TAKEN OFF TO RENT AND THEY R WAITING FOR THE MARKET TO GET BETTER
    I DON'T THINK SO. WE R CRASHING. EVERYTHING HAS A LIMIT

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  5. Better day for us bears
    448
    247
    221

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