Monday, April 26, 2010

What's with folks??

Inventory is moving up faster than 2008.

We have all time low affordability.

The CMHC monster is being leashed.

Mortgages rates are moving up briskly.

The list/sales are moving UP. (example- West Van- 9 new 4 changes 1 sale)

And yet when I look at the houses bought, they are at list price or a few, tiny, inconsequential % less!

What's up with some folks?? What are their Realtors advising them? Quick bid it up NOW...or else...or else......we will have lots more inventory and it will much more difficult to chose a house!

I doubt it. I am sure they are telling them that inventory is growing, and growing inventory usually brings lower prices (yes, we are different in Vancouver I know) but folks still seem panicked.

8 comments:

  1. BTW- I salute VCI and Pope for the RE Roller Coaster ride. Though I would have preferred it to just stop at the top and look down (like the original US version) so we could all see how far up we are from the ground.

    Imagination is often even more powerful than reality.

    Nevertheless, good job.

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  2. Buy now with high prices at 3.9% or buy later at 6% at lower prices. The difference? You have to rent for 2 years. Yeeech!

    I'm not so surprised at the high level of sales. Mortgage rates are low and people are obviously using monthly payments as the only gauge of affordability.

    Got cash?

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  3. Jesse- like some social diseases...the price you buy for, is for life (or close enough with these very long mortgages) whereas the interest rate is a transient event and may reset in 2 or 3 years much higher.

    To forgo the first in favour of the second would not be wise, especially since wages are pretty stagnant at present.

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  4. jeese said:
    Got cash?
    I have a lot of it but is not yielding anything at my account, less than 1%, not enough to compensate for inflation wheras real estate went up 20% just las year, I am confused, is cash just worthless paper in our days?

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  5. Anon, if you can find an investment that gives you a better return and access to capital when you want to purchase property, go for it. Please let us all know about it as well. I mean that without sarcasm.

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  6. yup- the forces that be want you to speculate to try and get more than your measly 0.5%.

    I won't, will you?

    West Van 12 new 2 changes. ZERO sales.

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  7. Inventory unto itself does not bring lower prices. It's the ratio between sales and inventory. So far, that ratio is holding up and we still have a balanced market. Things are definitely softening a little, but listings will also peak in the coming months.

    Don't hold your breath for another once in a decade Vancouver market correction. The bottom was already put in and I think we are nearing the top.

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  8. Dave- rising total inventory is usually the first sign of a market shifting.

    I agree sales are strong still (though they are just starting to show a possible drop). We will have to see if this continues into summer.

    If not, then the dynamic has definately shifted, especially if Mark Carney gets enough guts to stop talking about rate rises and Just Do It!

    However that would just put moderate pressure on prices, it will need a catalyst to get things rocking and rolling. Change of government? NEw pressure on banks? A few large countries going bankrupt? Your guess?

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