The Lay of the Land

So where are we now?

We are at decade high inventory.
We are at a MOI of about 6 +/-
We have 3% +/- rates
We have the CMHC with new executives and new restrictions, thank Goodness.
We have a Government who talks the talk, but is still slow and short on action.
Lets see whether they will cut back on amortizations to under 30 years as Garth has promised us.

Recently I have seen some increased Chinese Mainland buying of higher end properties. It always baffles me how a resident of a country that only allows outflows $50K a year per person, can throw down $5 Million on one transaction AND Presumably that is just part of the money they brought here.

Of course the effect of this money is very local, though there will be a trickle down effect into other areas. We will have to see whether this is the start of a new buying spree or just a blip

It is no where near the buying of 2011 which was a frenzy, but there is a little trickle so far.

There are also some well heeled local buyers coming into the market. A few sporadic buys, especially if sellers drop below asking. A recent sale in West Van that sat unsold for many months at Assessed, went quickly once the sellers dropped to $200K under assessed. The MOI is still very high in West Van and Van West.

There are also middle buyers coming into the market. It seems like a 5% drop and lo rates is enough for some people to think they are getting a bargain, or maybe they have other incentives for buying (inheritance etc). rates are low. 3% across the board or less.

As to our local economy, we have seen some significant commodity weakness. Base metals, Gold and Silver have all taken a hit and that will take some of air out of our local promoter crowd. However if the commodity weakness persists, then we are looking at some serious economic weakness in BC which will dampen demand further. Our jobs numbers have been all over the place with a big loss last month and a big gain this...

Sales should start to taper off over the summer months and once again the MOI will start to rise. Now we will see how firm prices are. The trend is still down, but needs confirmation.

The Kracken...

Below the thunders of the upper deep;

  Far, far beneath in the abysmal sea,

  His antient, dreamless, uninvaded sleep
  The Kraken sleepeth: faintest sunlights flee
  About his shadowy sides: above him swell
  Huge sponges of millennial growth and height;
  And far away into the sickly light,
  From many a wondrous grot and secret cell
  Unnumber'd and enormous polypi
  Winnow with giant arms the slumbering green.
  There hath he lain for ages and will lie
  Battening upon huge seaworms in his sleep,
  Until the latter fire shall heat the deep;
  Then once by man and angels to be seen,
  In roaring he shall rise and on the surface die.

By Alfred Tennyson

Our own Kraken is near the surface too. Having brought our country untold Hundreds of Billions of liabilities and debt it is nearing the end of it's destructive life. The CMHC is very near it's limit. 

 Also we have a new Chairman, a banker who ran the only major New York bank that was not part of the we-will-gamble-with-your-money-now-bail-us-out. Let us hope he pulls tight on the reins of this monster. 

The CEO is also leaving. 

Things are a-changing for the Kracken Monster.

REBGV Stats April highlights- Eye opening!

 A refreshingly honest appraisal of the situation IMO.

"The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Greater Vancouver reached 2,627 on the Multiple Listing Service® (MLS®) in April 2013. This represents a 6.1 per cent decrease compared to the 2,799 sales recorded in April 2012"

"Last month’s sales equate to the lowest April total in the region since 2001 and 20.9 per cent below the 10-year sales average for the month."

"The total number of properties listed for sale on the MLS® in Greater Vancouver is 16,730, a 1.2 per cent increase compared to April 2012"

"The sales-to-active-listings ratio currently sits at 15.7 per cent in Greater Vancouver. This is the second consecutive month that this ratio has been above 15 per cent. Previous to this, May 2012 was the last time this ratio was above 15 per cent"

I had posted that from what I had seen the median (hence benchmark with which it should approximate) was down. REBGV has noted this. Kudos to them for not fudging. Some RE boards which shall go un-named have average and median down and yet the benchmark UP! That would seem mathematically impossible.

"The MLS® Home Price Index composite benchmark price for all residential properties in Greater Vancouver is currently $597,300. This represents a decline of 3.9 per cent compared to this time last year "

"The benchmark price for detached properties decreased 5.2 per cent from April 2012 to $914,000."

"The benchmark price of an apartment property decreased 2.6 per cent from April 2012 to $365,900"

"The benchmark price of an attached unit decreased 3.5 per cent between April 2012 and 2013 to $455,200"

Have a look at the areas for 5 year return. You will be shocked. Some are in a world of pain with -10% or lower returns. No surprises...Whistler (look at apartments down 40%!), Maple Ridge, Bowen (which was being priced as West Van alternative), West Van apartments, Squamish. 

Only Van Est and Van West are (barely) positive for apartment benchmark over 5 years. The meme of rising prices can no longer be maintained. Absent some lunacy from the policy-makers or a resurgence of Chinese buying (which will only effect certain areas) we are on a clear downward path. The weakness is coming in from the periphery and we have lower jobs and lower commodities to add into the mix. Do we want a crash...no! Do we want an end to the insane prices..yes!

The whole package is here

Numbers out

Thanks as always to Larry.

Bit of a mixed bag for us bears as you can see.

MOI is 7 for SFH, 5 for attached and 6.3 for apartments.

These are not crash numbers but should bring more downward pressure. I expect the Median to be lower and the HPI, if not too manipulated, to be lower too.

Had lunch with a realtor today who specializes in the higher end, (everything is higher-end at these prices!) who said the market was definitely much weaker. Psychology of sellers was shifting to 'what can I get', rather than 'what do I want'.

Big piece on CBC radio about the drop in sales and weakening home prices across Canada. Ground zero was reported as Vancouver. Calgary was bucking the trend. They had Le Poidevin saying banks have been pulling back from the more expensive, higher leveraged deals.

Here is why parties should not stay in power too long...

They think that a mail-out a smear campaign should be paid for by tax-payers.

The whole point of tax-payer funded mail-outs is to allow MPs to communicate with their constituents about important matters, and smearing a new opposition leader  for his youth or apparent lack of experience, doesn't seem to be to be one of them.

It is interesting that the main point of attack seems to be that he is a teacher. Mislabelled as a drama teacher- though he mostly taught math and french and it is doubtful there was a family more steeped in politics than Trudeau's from both his father and mother's side.

Anyway would it be so bad to have a PM who was a teacher?

I thought I would look at the professions of our previous PM's from Sir John A. MacDonald onwards:

Lawyer
Contractor and Editor
Lawyer
Lawyer and Educator
Lawyer
Editor
Doctor
Lawyer
Lawyer
Lawyer
Lawyer
Lawyer and Editor and Civil Servant
Lawyer
Lawyer and Educator
Lawyer
Lawyer
Diplomat and Professor
Lawyer and Professor
Lawyer
Lawyer and Corporate Executive
Lawyer
Lawyer
Businessman and Lawyer
Economist and Lecturer

Seems like one profession may be a bit over-represented and others need to get a foothold.


PS- away for the week-end, though I will put up the numbers this evening.  We will be back to RE next week.

Another interruption...

As you know what real gets my gall is the Government trying to cut sweat deals out of our pocket for their media cronies.

The Harper Government are masters of this ruse. They keep trying it...and we fought back. Remember when they tried to bank-roll the Canwest/ Global network of the Aspers which was floundering as they were sooo biased. We stood strong and they backed down.

Well now here goes another attempt. I wont go into details but just paste the e-mail I got from Avaaz which is a progressive organization well worth joining IMHO. If you do not want to subsidize a right-wing corporate elitist outfit, now is the time to say so.

For those of you who will point at the CBC and Knowledge Network as examples of our subsidies at work. Thank goodness for them- is all I can say... or we would be fed a constant diet of US sit-coms and reality shows...no proper news, no analysis of Canadian events, no Nature of Things, no programs which the advertisers will take offence to.

Our great media which was so biased and right wing they called one of the greatest Canadian ever, taliban Jack, funny how they pulled the article off line now.

Anyway here it is:

Dear friends, 

On Monday, a CRTC hearing will consider whether Canadians want to subsidize Sun News or "Fox News North"- a media outlet set up with the help of a top Harper crony. Both Sun News and Avaaz will appear before the hearing. We won this battle last time, but now Sun News has worked nonstop building a petition of 53,000 people over the course of months. Let's blow that out of the water in just days, with double that number saying no to paying for crony-media that corrupts our news and poisons our democracy:

In days, the CRTC could decide whether Canadians should be forced to pay for Sun News or 'Fox News North'. Both Avaaz and Sun News have been asked to appear at the hearing, and Sun News has built a petition of 53,000 over months. We have just a few days to blow it out of the water.

After Harper and his top spin doctor Kory Teneycke met secretly with Rupert Murdoch, Teneycke was involved in modelling Sun News after Murdoch's Fox News, the political propaganda network that has poisoned U.S. politics. It's Canadian crony-media -- run by a political crony, pushing a political agenda, and now seeking to be funded by a government handout, asking the CRTC to force it onto our basic cable packages.

Sun News have been pushing their petition non-stop for months. If we can double it in a few days, it will send a powerful signal to the CRTC about where Canadians stand -- click below to sign and share this email with everyone who cares about Canadian democracy:

http://www.avaaz.org/en/stop_fox_news_north_2013_crtc_2/?bCRrJab&v=24555

The CRTC is the government agency that implements and enforces Canada's broadcasting laws. Among other things, it has the power to require all Canadian cable providers to carry certain channels. But it rarely does this because it would prefer to let consumers choose what channels they want. Canadians aren't choosing to pay for Sun News, and it's losing millions of dollars. So Sun is asking the CRTC to order all cable providers to carry Sun News and pass the cost on to us -- even if we don't want it!

In 2010, tens of thousands of us banded together and helped stop "Fox News North" from getting a similar deal -- even contributing to Harper's aide, Kory Teneycke, resigning as head of the network! But then, the network sneakily hired him back and now they are launching a similar application, hoping we won't speak up while they try and recoup their $17 million in losses from our pockets!

Fox News fuels hate. While constantly claiming to be “fair and balanced,” it has allowed hysterical anchors like Glenn Beck to compare President Obama to "Hitler." Bill O’Reilly, another anchor, has threatened to boycott Canada, and Anne Coulter has said on its network that Canada is lucky the US allows it to "exist on the same continent.” The network has cunningly fuelled the tea party movement in the US, a mobilisation of the fringe right with members who threaten violence upon its opponents and wear guns to political rallies.

This is a fight for the soul of Canadian democracy. Our media is not perfect, but a ‘news’ network that slavishly serves a political agenda through mass manipulation and fear threatens the fabric of our democratic society.  And while such a network has the right to offer its views, it doesn't have a right to demand we subsidize it.

Canadians don't like watching "Fox News North", which is why they are losing millions and need a sweet government deal to survive. But we can stop the CRTC from taking money from our pockets to pay for right-wing news. Click below to stand with Avaaz's representative at the live hearing and help us build a big enough call to hammer home our best legal arguments:

http://www.avaaz.org/en/stop_fox_news_north_2013_crtc_2/?bCRrJab&v=24555

"Fox News North" threatens to make the country we love look more like the U.S. Thankfully, the CRTC and their public process stands in the way -- let's use this chance to be heard and stop Sun News's grab for our dollars for good.

With hope,

Jeremy, Ari, Emma, Ricken, Mélanie, Laryn and the entire Avaaz team

SOURCES

Sun News Must-Carry Application: CRTC Sounds Skeptical About News Network's Bid (Huffington Post)
http://www.huffingtonpost.ca/2013/04/23/sun-news-crtc-hearings_n_3141932.html

Sun News On Basic Cable? CRTC Opens Hearings As Channel's Losses Widen (Huffington Post)
http://www.huffingtonpost.ca/2013/04/23/sun-news-basic-cable-crtc_n_3133898.html

Hating the Jew, hating the ‘gypsy’ (National Post)
http://fullcomment.nationalpost.com/2012/09/25/bernie-m-farber-et-al-hating-the-jew-hating-the-gypsy/

Sun News Network viewership lags on first anniversary, controversies continue (Canadian Press)
http://www.huffingtonpost.ca/2012/04/18/sun-news-network-turns-first-anniversary_n_1433521.html

Sun Media breaches Code of Ethics (Canadian Broadcast Standards Council - CBSC)
http://www.cbsc.ca/english/decisions/2012/120613.php

Investigation into alleged racist comments against blacks (CBSC)
http://www.cbsc.ca/english/decisions/2012/120620.php

Warning: This column contains scary Sun News scenes unsuitable for some readers (Globe and Mail)
http://www.theglobeandmail.com/arts/television/warning-this-column-contains-scary-sun-news-scenes-unsuitable-for-some-readers/article5215962/

What's up in the Okanagan?

Not a lot...except for MOI.

High MOIs based on the latest March numbers.

Central Okanagan has a sales inventory ratio of 10.02%. ie 10.02% of the houses listed got sold...or a MOI of 10

Shushwap/Revelstoke has a sales/inventory ratio of 4%. MOI is 25

North Okanagan 7%. MOI is  14.

Now for the Ok sales grind to a halt in late fall and winter. We are however coming into peak buying season, so if the MOIs do not drop down soon, I would expect even more pressure on their market.

The sales are well down from last March as you can read from the rather sombre President's comments. The only thing that saved them from critically high MOIs was the fact that inventory declined 5% from last March.