One sale for every two realtors?

Sales, like a tramp steamer running of gas is sputtering, and slowing down..


In March we had .."a decline of 29.6 per cent compared to the 4,080 sales in March 2011 and an 8.4 per cent decline compared to the 3,137 home sales in March 2010." REBGV


We are on course to have 2900 sales for the REBGV for April.


That would be 10% less than last year and 20% less than April 2010.


That cannot be a pleasant situation for the 10,000 Realtors in the  region (give or take a few hundred as these are 2010 numbers)


Now of course every sales has two parts a listing Realtor and a selling Realtor, so 2900 sales become 5800 transactions.


Rounding the numbers that comes to one transaction for every two Realtors in April. Even with our sky-high prices, that leaves a lot of agents with little or no income in April and on-going expenses.


Of course like many other fields, the top 10-20% are probably accounting for the lion's share of the transactions.

What do you think?

Are these two guys....

Geniuses?

Or........................Fools?

Here is your answer...

Kudos to the Economic Analyst for the first two charts.

Interesting BNN spot

The Media has been in a frenzy (finally) about Mainland Chinese buyers. We are reading that 13/15 high priced British property homes recently sold went to them, and about the megahomes on the westside- fixed, flipped and left empty.

Well Andrew Bell of BNN interviewed David Choi a well-known realtor who deals in the Mainland Chinese market.

What was interesting was the absolute lack of any remarks from the interviewer or interviewee about the ethics of allowing people, on occasion wealthy fugitives from China, to buy these properties with untaxed (maybe illegal) money and then leave them empty. Even while saying that China itself had restricted people to buying ONE home only.

It was like they had a right to do it, and 'Oh no' What would happen it they quit.

Andrew Bell did try and (gently) ask at the end about locals who maybe getting resentful about the huge prices being paid for homes which are then left empty and what did his guest think about that. It didn't even seem to register with him! He went on about how the Chinese investors were running out of good properties to buy and may have to buy homes to renovate.

Clearly no one is in the least concerned about home prices shooting out of the reach of those working and living here and EVEN WORSE that homes are being left empty in an area of tight housing and high homelessness. Not the Federal Government, and definitely not our good-as-useless Premier who has no real platform of ideas as far as I can see.

This is the free-market taken to the level of lunacy. Even Singapore has property restrictions. Why not just sell of the whole city to these 'investors' and the rest of us can be bused in from Abbotsford to clean the streets, protect their property, treat their illnesses if they visit and mow the lawn.

Yes, offshore buyers are just a part of the problem, however this is a curse no city wants, especially one that needs tax-paying, consuming people to stay vibrant (forget the arts which have died in this town) and which has pressure to house those who have chosen to make their lives here (from all back-grounds).

Start with below-inflation-interest rates, mix in the CMHC insurance, lengthen mortgages, have banks with no skin-in-the-game and finally top off with endless off-shore tax-unpaid, hot dough and voila....you have an almighty bubble.

The myth of Canada's strong financial sector.

Carney and Flaherty have made a lot of hay boasting about how strong our banks are. They have been lecturing the poor Europeans and Americans. Of course the truth is very far from this fantasyland. The only reason we have 'strong banks' is because the risk of high leverage mortgages has already been pre-transferred to the tax-payer, via the CMHC.

These three graphs will show you how different things are in reality and how potentially dire:

Kudos to the Economic Analyst for the first two charts.

We should be cheering

Shouldn't we...?

Maybe things are moving quicker than we thought.

UPDATE 1-Canada home prices fall in March, sales up-CREA

Reuters

Mon Apr 16, 2012 11:18am EDT

* Home prices fall 0.5 pct in March from year earlier     * Vancouver-area price declines impact national avg     * Prices in Toronto rise 10.5 pct     * Home sales up 2.5 pct in March from Feb       By Jon Cook      TORONTO, April 16 (Reuters) - Canadian home prices fell in March from year-ago levels even as existing home sales activity picked up, with a cooling of the once-hot Vancouver market offsetting big price gains in Toronto and steady increases elsewhere. 

    A report on Monday from the Canadian Real Estate Association showed the average residential home price in March was C$369,677 ($370,600), down 0.5 percent from the same period last year. The figures are not seasonally adjusted.      But the broad number masked big differences between cities and regions. 

    The average selling price in Vancouver, Canada's most expensive major market, fell 3.1 percent from a year earlier to C$761,742. Prices in the nearby Fraser Valley area tumbled nearly 10 percent. 

    But prices in Toronto, which has seen a boom in condominium construction, jumped 10.5 percent in March from a year earlier.      "The slight decline in the national average price points to a tug of war between Toronto and Vancouver," Gregory Klump, the industry group's chief economist, said in a statement.      Klump added that national prices in 2011 had been pushed higher by "record level high-end home sales in some of Vancouver's priciest neighborhoods."

      The report also showed existing home sales climbed 2.5 percent in March from February on a seasonally adjusted basis. But the increase, unadjusted, was up just 1.6 percent from year-earlier levels. This represented the lowest yearly growth rate since April 2011. 

    "While it is difficult to see in the monthly data, there is a sense that the housing market is gradually slowing," David Tulk, chief Canada macro strategist at TD Securities wrote in a research note. 

    "The dynamics of this report show a maturation of the housing market cycle in Vancouver which is likely to be repeated in Toronto over the coming year. Outside of these two markets, the rest of the national market is still holding in reasonably well." 

    Tulk added that gradually rising Canadian interest rates over the next two years should help slow the market further.      The news should provide some relief to the Bank of Canada, which has warned that rising household debt levels, in many cases the result of large mortgages, are the biggest domestic threat to the economy. 

    Canada's housing sector never experienced the subprime mortgage boom and bust that drove the United States into recession. And a post-crisis housing market rally, triggered by record low borrowing costs, played a key role in driving the recovery. 

    But Bank of Canada Governor Mark Carney and Finance Minister Jim Flaherty have both expressed concern about the housing boom, with Flaherty tightening mortgage rules several times to try to cool the market.

The Bank of Canada fumbles again

Carney and Co came out today with much fanfare, saying that higher interest rates may needed.

They up-graded their growth forecasts and are of course fearful of the huge amount of debt Canadian have taken on and the Real Estate bubble - so they are moving into rate hiking mode.

The only thing holding them back is the high Canadian Dollar which is damaging Ontario's manufacturing sector.

So when will they do this?

Probably not until late 2012 or 2013 and even then it will be a tiny move up from the current 1%. (with inflation running at 2-3x that)

Huh? So why all the hullabaloo now. Just do it! The result of these words is that the CAD has soared again, but rates for borrowers have remained rock solid.

This is the exact opposite of what they say they want. Now manufacturing gets hit but debtors have a free pass.

Why do we keep doing things that are the opposite of our intentions? The CMHC of course being the prime example. Say one thing but do the opposite.

Just shut down the CMHC

The clamour to clip the horns of the CMHC are getting louder.

The IMF, Bloomberg, Nomura, OFSI, even the Canadian Banks (the recipients of CMHC largesse) and the media have jumped aboard too, never mind those foolish bloggers who have been sounding the alarm for several years now.

I am sorry to have to link the National Post, which IMVHO is only one small step above Macleans but there is an article worth perusing, though it would have been better written...say two years ago than now. It talks about foreign speculative buying (which occurs alongside Canadian speculative buying) but also about the CMHC which seems to insure just about everything and anything.

Why exactly? And why do they insure rental or investment property? Isn't it obvious to even the most feeble brained, that if your mandate is to encourage Canadians to own their own home, by facilitating others to buy more for investment- you are taking homes out of the pool for sale and making it more expensive for first time buyers...no?

It used to be this bad:

They have tightened up the rules but it still exists.

From the CMHC site:

5. Does CMHC Mortgage Loan Insurance only apply to traditional single-family residential properties?

No, CMHC offers mortgage loan insurance products on various property types including duplexes, condominiums, owner-occupied properties, manufactured or mobile homes, properties requiring renovations and much more, including rental and nursing homes. Please check with your lender for more details.

I would have no problem for those building NEW rental stock to get insurance, but not for those just buying what's already built. It would be dumb beyond words.

The article says that a housing bust could hurt us a lot via the CMHC. Duh....We have been saying that in the bear blogs for several years now, ever since this Government doubled their capacity.