Mid-Week Update
There were 337 new listings today, and 120 sales, for a sell/list of 35.6%. From Monday until today there were 1,121 new listings and 306 sales for a sell/list of 27.3%. Inventory in my target are is 16,308, of which 2,609, or 15,99% were over 90s.
105 comments
It’s steepening, isn’t it? If inventory growth continues at this rate we’ll be up 100% YOY before summer is over. If it continues to steepen, it will be even more dramatic.
i hope people don’t panic.
This is even faster than I thought. And this is prime buying season.
Not impossible to hot 25,000 this year.
WOW.
But I do not yet see any price break down yet. I guess it depends on how many straws the camel can carry.
hit
The worst hit areas in the U.S. are probably Californias, Nevada and Florida. Now these are prime areas that people would love to retire in. Beautiful, hot weather.
Now you tell me in Canada where do people want to retire?
We sold our house in Victoria last year and have been sitting on a decent downpayment waiting for this to unfold. It can’t come too soon either. We just spent the last month with a crowd of other sad-sacks in a nightmare rental hunt looking at depressing, over-priced basement suites and condos with carpet stains or back-alley views. All to shave a few hundred bucks a month off our rent to save for what we had been hoping would be a market drop sometime this year. Hope like hell this is it cause I really can’t take another year in somebody elses over-priced stink hole.
Good Luck. I was a realtor in ‘82. I bought a forclosure in ‘87. Rates were different, but the psychology is the same. Greed then fear.
REBGV – 17000 by the end of the week at least.
Real estate is to BC what oil is to Alberta.
RE is a much bigger part of our economy than probably any other place in Canada. It has been that way for a long time. A significant slowing of the residential RE market is a huge “negative event” for many aspect of our economy. I agree with VHB on that point.
That said, I agree with Rob that the market is changing but there have not been any real price drops yet. So, while it may not be a very good time to buy, it is not a bad time to sell. Prices are still firm and there are still buyers, although they appear to be dwindling in number.
“but the psychology is the same. Greed then fear.”
We’re at the point where both are in play: greed for the want of a miximum payout and fear that the haircut they thought wouldn’t happen is coming.
One thing for sure, it’s getting more and more interesting by the day.
Change Alert:
18,000 by month-end and 21,000 by end of June. 30,000 before year end. Rom’s o ver 90s stay low, so market is still strong…lol…its gonna get ugly for some and beautiful for me. Thank ya very much.
“Prices are still firm and there are still buyers, although they appear to be dwindling in number.”
If the current sell/list ratio continues, I think your going to see a huge shift in psychology. Who in their right mind would buy at these over-inflated prices knowing the stage is being set for price reductions?
Fozziebear,
The psychology is shifting but believe it or no there are still properties selling for over list. My point is that if you speculated in the last couple of years or you need or wish to sell in the near future, it’s probably better to sell now than when listings hit 17k/18k and the MSM alert the remaining uninformed buyers.
I wonder when the great unwashed will shift sentiment from greed to fear…not yet…soon?
15% – HA – come to Vancouver/BC – I expect a decline of around 25% this year and 35% next year – HA – just watch, forecasts will continue to be reduced and then go negative – what a joke – I’m laughing my head off!:))
Canadian home sales to fall 15 per cent this year, Scotiabank says
Canwest News Service
Published: Thursday, May 15, 2008
OTTAWA – Home sales, which have now fallen for four straight months now, will decline by about 15 per cent this year from last year’s record level, and the average increase in prices will ease to five per cent, Scotiabank forecast Thursday.
The market will continue to cool next year, it added.
After many false calls, there is now convincing evidence that Canada’s housing market has come off the boil, it said in releasing its forecast.
Next Step:
Buyers wait on the sidelines – stop buying altogether (this is a generalized statement). Buying falls off a cliff at the same time listings SURGE.
Rob, I saw this coming – did you? Don’t worry, your a realtor, not an economist, your job is buying and selling real estate – full stop. Nothing wrong with that.
Anyone hearing of massive price reductions on the West Side?
thank you.
I like that Scotiabank article. They are saying the sky is cloudy, but for those of us who can read between the lines, they are saying its falling. Can’t wait to see what they have to say in a couple months.
Anyone hearing of massive price reduction on the west side?
Yes, someone was ahead of the game. A RE/MAX realtor Tom Gradecak listing #V684738 , address 5738 Churchill St, listing price $1,790,000 – sold price $1,300,00, sold date 28- Feb-08, DOM: 42. That’s a bit of a hair cut $490,000.
Wow, you saw this coming, yet you clamor for Rob’s confirmation daily… what gives ???
Yes we are at a market junction and it is OBVIOUS, so don’t claim you saw it coming, all you are doing is looking a Paul’s b site and reciting it like its your info
one place i’m gonna watch is Shangrila… both assignments and resales…. Jeff any feedback on Shangrila yet?
i’d expect that most of the buyers have fairly deep pockets unlike “W”
doc, I’ll claim what is rightly mine. Full Stop.
Anon – cool (westside price reduction)….WoW….WoW….hope for more of the same!
That is in South Granville…still not cheap….but much better than 1.8mm ha ha ha – loving it.
doc – take your meds.
blueskies:
I don’t follow either. When I get a listing in one of those places I’ll become more interested then.
Just for the sake of argument…interest rates are low. Inlation is low. Unemplyment is low. Commodity prices are high- and we sell ‘em. Canadians have lots of cash. There are a limited number of really frothy markets: Cowgary, Edmonton, most of Sask, and the lower mainland. I can see a modest haircut in those markets. 25% in a year is within the realm of possibility. But the fundamental macroeconomic picture of the country is quite positive. Surely this will restrain a chain reaction.
Inhalation is low, but I meant inflation.
Ya, low inflation – tell that to my gas/food bill!:))
Inflation fighting will kick in once the credit crisis is moved from critical to stable….
Park that SUV, WoW. Tell your wife that Smart Cars are super-chic
besides, haven’t there been a number of articles lately stating that they’ll be raising interest rates in ‘09 to fight rising inflation?
What will that do to a housing market that seems to be standing on shakey ground at the moment?
“But the fundamental macroeconomic picture of the country is quite positive. ”
I Vancouver, that is not a big issue. It would be if the market were more or less in line with fundamentals. Then people who say, what the heck, I’m rich and this is a good deal, so I’m going to buy it. Once the market is falling, however, no matter how rich you are, you don’t buy something that is falling in price when you can get the same product at a lower cost by renting or waiting.
Look at the stock market. It goes up and down, but most of the people who buy and sell stocks have enough money, even in the downturns. So it is quite possible to have money coming in, and money in the bank, and still decide not to buy something.
I think the RE market will be looking pretty grim by the end of the summer. Many who should really sell now will hang on until next spring, hope that it was just a one year set back, we are closer to the Olympics, etc. I can already feel my joy that smug RE specuvestors, who have been laughing at people like me, are going to take it in the gonads seeping away…and being replaced by concern for all the people who thought RE was a sure thing and an easy way to make money (as opposed to earning and saving, self-investment in skills to get better career, etc.) and are now going to get burned badly. I know, I sound like an old geezer (which I guess I am kinda), but that is the way it has worked for most people, for a very long time……how do you short this RE market? Open a bankruptcy practice….?
Went for a drive yesterday past Musqueam to UBC and being new to the province, was pretty amazed at some of the houses along the road.
what are those places worth????? approx?
interest rates are low. Inlation is low. Unemplyment is low. Commodity prices are high- and we sell ‘em.
ceejay, In other words you’re saying a perfect economy is already priced in? Put on your critical thinking cap and imagine if any of these variables change. Another way of thinking about it is how much better can things get economically than they are now? What does that mean for prices down the road?
watching – I agree – the Spring ‘09 markets will have the real rush to the exits.
Jeff – is it possible we see 50,000 places for sale in Spring ‘09? Could this scenario unfold?
Rob – if the above does unfold, and over 90s remain low, is the market still just fine? Just kidding!:)
WoW:
“Rob, I saw this coming – did you? ”
Nope. Didn’t see it coming. All that talk about a correction coming sooner than later was just me making conversation. I really didn’t know what the words meant. (Stupid question/stupid answer, right?:-) )
BTW, are you conflating lower volumes with lower prices from time to time? A 25% drop in volume doesn’t equal a 25% drop in volume. We’ve touched on that issue in the past.
As for claiming what’s rightfully yours, um, you called a change effective January 1, no? Although the market has certainly changed we’re still seeing great prices attained, and sales are nowhere near as off pace as inventory has grown. So…what exactly are you claiming?
Rush to the exits in spring of ‘09? Wait, I thought that we were seeing the rush now? What’s up with that? And I have to wonder: for a guy who’s got his sights set on a $2m house in Shaughnessy (granted, waiting for a price drop), who gives his parents such great investment advice, and who is an FTB (you’ve said you’ve never bought before, correct?) I can’t imagine that you’re really concerned about your gas bill, unless its for your jet and yacht.
WTM:
“Many who should really sell now will hang on until next spring, hope that it was just a one year set back, we are closer to the Olympics, etc.” You could be very accurate in this (as in, if the market trend has indeed changed, what you say about some sellers is 100% accurate). I’m not sure, however, that specuvestors feeling pain will translate into any kind of nirvana for too many others.
WoW, you should teach advanced communications classes Rob, you are good!
I’m not confusing lower volumes with lower prices Rob. But I understand the connection between lower volums (and surging listings (demand and supply moving in opposite directions) and the implications for prices going forward. You’ll see the connection as well, I will ensure that I point it out for you from time to time. It is a very strong correlation…we are on the downward slope, and this is not something you thought would not happen (giving you credit on that), I guess you are loathe to call a timeframe for this, fair enough…that said, I think we are in the very early stages, and I don’t buy the mythical benchmark prices (I don’t buy the cpi/inflation numbers put out by the government either, so call me a conspiracy theorists…).
Michael gets it. TNQ does not.
Michael said…
To Coco,
I’ve got to say that Newcomer and Watching the Market on bank on on this one.
One needs to take the emotional aspect out of house prices, and instead look at the bare bones economics. As such, a property can be seen as an income producing asset, in that there is a base price (the house price) with a dividend, which is the priveledge of being able to live in that property. The dividend is best represented by the rental value.
Current rental values are quite low in Vancouver compared to house prices, which indicates a disconnect. This disconnect represents not actual value, but rather investor speculation of further increases. In other words, a speculative bubble.
The reason speculative bubbles always end badly is as Newcomer described. Once the prediction is out for markets to “flatline”, then the speculative aspect of the market dissipates, and the new value needs to represent the fundamental value, which is that of a dividend producing asset. As such, prices are significantly overvalued in Vancouver. In fact, last year Forbes magazine used similar analysis to indicate that Vancouver was the most overvalued housing market in the world.
May 15, 2008 10:39 AM
Yes, R/E construction is without question a major player of economics in B.C./GVRD. Our current government focuses on this bigtime.
I believe the market is churning, getting ready to crack any day. Is this what it was like around 2 years ago in the U.S.?
But who knows for sure. DO YOUR OWN RESEARCH.
Bull can make money. Bears can make money. Pigs?
Bears will save a lot of money. Bulls will lose some of their profits -that said, I tip my hat to the bulls, they were right when I was wrong….I’m just starting to be right now…will be interesting to see how this unravels – I expect framers/roofers/etc. folks are going to see a really big glut of workers to projects by fall…if not sooner…although you may get developers jamming product out while prices are still high, but falling, in advance of total carnage.
I always find PaulB’s comments refreshingly simple to understand. Perhaps he’s not taken RC’s communication course?
Paul said…
Exx:
I will give you a mid month number tonight after the sales are in. I can tell you from a glance this month is way off last May. Listings dramatically higher and sales are dropping like a stone.
May 15, 2008 11:30 AM
“sales are dropping like a stone.” – yes, not to difficult to decode…
WoW, I agree completely with your analysis in comment #36.
I’m trying to decide if we should sell our primary residence, a downtown Vancouver condo. We bought in 2004, and our monthly housing expenses are approximately in line with what it would cost to rent a similar property, $2500/Month.
We love the location, but a condo is a condo, it’s not all that unique or special in and of itself. I believe that we could take a minimum of $400k in profits if we sold today.
Am I crazy to be thinking this? Greedy, I suppose. But a smart rational decision as well, considering the fundamentals of the Vancouver RE market.
WoW – nice tax free profit, congrats!
I know what I would do, but you have to decide what’s right for you….nice job!
Just watch out, condo’s are lingering on the market now, and prices, per Jeff, are falling about $10,000 per month (Jeff, is that what you are seeing out there), but that said, everyone has to choose for themselves, and I could be wrong with my analysis, caveat emptor and all of that…
I’m trying to decide if we should sell our primary residence, a downtown Vancouver condo.
it may be already too late unless there is a substantial discount to the current market, hard to capture attention in a crowded market.
…and condos could be easily considered a commodity in the core and elsewhere..
I think paper profits on condos are rapidly in retreat. Rob, what do you think?
there is no bubble in vancouver
It’s time to wrap up bears,please take your chairs with you.I appreciate your time you have spend here,thanks for coming thank you every one please find your self a decent home right now.
I tried, but Rob’s phone was busy!:))
just kidding…Rob, one day you me and Jeff will laugh about all this (all the way to the bank) over a nice merlot and cuban cigar.
The 400k in profits is with what I think is pretty aggressive pricing, 650/sf on Marinaside Crescent (and includes transaction costs).
Sorry if I’m cluttering up the comment thread, but how can I get in touch with “Jeff”?
Thanks,
Travis
TBJ, I would sell it in a heartbeat. 400K will buy most of a nice house at the bottom. But I would list today and undercut the market by around 15%.
Newcomer, does that mean you are expecting a sudden drop of 10-15% ?
I like how some people are big talkers “I would list today and undercut the market by around 15%”
I sold a listing this year where the sellers undercut the market by 5% and sold for 2% better than list price.
No one really undercuts the market on their list price. It is extremely rare. Most Realtors are lucky to get the seller to list sharply.
Rob:
Have you ever listed a place intentionally for 15% below market?
“TBJ, I would sell it in a heartbeat. 400K will buy most of a nice house at the bottom. But I would list today and undercut the market by around 15%.”
Will 400K buy most of a nice house at bottom? Maybe. What if 400K only buys most of a slightly larger condo at bottom? How much rent are you going to shell out until we get there?
DigDug:
Renting is cheaper than owning.
I watch these numbers all the time and this is very exciting!
I still don’t think I will buy for a couple of years but it will be nice to say to all those poeple out there that it does indeed look like supply is increaseing in an unpresidented fassion.
This one sold only a couple of months ago, and now relisted. Not sure what it sold for originally, but the asking price was about the same as the asking price this time, which i guesss means it’s not a flipper: V699557
Jeff:
15% below market? As in, list for $100 and sell for $115? Nope. I don’t like the tactic. Its more successful, I think, to try to price it where it should be that to be cute, but what do I know?
Not sure if you meant it this way, but undercutting the market ($100) by 5% ($95) and selling for 2% over list ($96.90) is still selling under market by $3.90.
TBJ:
Call Aaron, who works for me. He’ll price it right and get it sold, end of story. He’s part of a team that can respond very well to the changing market and will give you as much in depth straight info as you need.
Jeff:
Renting is cheaper than owning. If TBJ shares the view that prices are going to drop 50% in the next 3 years then it’s a no brainer.
But, if the intention is to get back into ownership in that timeframe, what if the price decrease is much less?
Rob:
“Not sure if you meant it this way, but undercutting the market ($100) by 5% ($95) and selling for 2% over list ($96.90) is still selling under market by $3.90.”
Exactly what I meant; however, I got my clients the $96.90 and that is as good as prior sales ($95, $96, $94), it was just lower than the current competition ($100, $101) which by the way are sitting on the market and not selling.
DigDug:
renting is cheaper now by quite a bit if you consider interest, taxes, condo fees/or maintenance, and opportunity cost on principal.
Jeff: Fair enough. TBJ noted that in his/her case, “monthly housing expenses are approximately in line with what it would cost to rent a similar property.” I’m guessing this doesn’t factor in the opportunity cost. But in this case, how risky are you going to be with the cash you want to use to buy a house? Are the returns you might get on a GIC really that attractive?
Rob:
We also know that properties can sell 3.9% below list.
I think I did a great job on that one.
My clients also get a big congratulations.
“Renting is cheaper than owning.”
Renting is CURRENTLY cheaper than owning. In the long term, how do landlords make money if renting is cheaper than owning? Or are landlords perpetually subsidizing renters?
JEFF – I’M NOT SURE IF YOU NOTICED, BUT SOMEONE WANTS TO GET IN TOUCH WITH YOU ABOUT LISTING THEIR HIGHER-END CONDO – FIND A WAY TO MEET WITH HIM AND PERHAPS YOU AND AARON CAN LEGITIMATELY COMPETE FOR THE LISTING, THAT’S FAIR, ITS FAIR That Rob is going after it and fair that you do as well, in this circumstance, as he’s (Travis) is specifically indicating he’d like to touch base with you – just an fyi, sorry for shouting!
Wish biz would find me like that!:))
I’m sure Aaron would likewise do a great job…
WoW:
I struggle with wanting to remain somewhat anonymous.
I can see how people would want to work with me because I believe in selling properties and not just taking on listings that go through a series of price changes, etc.
I can also see how putting my name out there makes me more of a hated Realtor because of my bearish opinion of where the market is going.
Do you think people really want to list their property with someone so realistic, pessimistic, or however I am perceived?
Re the Scotiabank report on real estate that came out today. Below is a direct quote (I believe I can reproduce it if I clearly attribute it…)
“Home prices in Canada are not substantially overvalued. Our long-term housing price model puts average home prices in 2007 at about eight per cent above their long-term trend, compared with a premium of 12 per cent and 18 per cent, respectively, at the 1976 and 1989 housing cycle peaks. Recent International Monetary Fund (IMF) estimates placed Canada at the bottom rungs of international home price overvaluation.”
If anybody is interested, I would like some reasoned (i.e. not hysterical) feedback (i.e. not ranting) on these assertions. I question the assertions because they seem at odds with what many others have claimed and/or written?
Are home prices in Canada “not substantially overvalued”? Has anybody seen Scotia’s model? Is it solid? What about the IMF estimates? Has anybody scrutinized? Are they Are they true for Canada but not BC?
Rob?
VHB?
that press release was featured on cbc’s website…and the comments are reallytaking off. I would say running about 10:1 that the Scotia Bank author has consumed large quantities of the RE market pumpers cool aid….
Rob,
I think he means list at 95 and sell at 102.*
*I am usually wrong
TBJ:
If you’re gonna sell, you better do it fast. Inventory is rising rapidly everyday. The number of condos coming online is getting ridiculous.
Vancouver is not representative of the rest of Canada so saying that a nation is not overvalued therefore a region within the country is not overvalued is flawed. As an example, the US was not near the most overvalued of the countries listed in the IMF report yet some of its regions have seen by far the steepest declines in price of anywhere.
The IMF report say this: “For each country, house price growth is
modeled as a function of an affordability ratio (the lagged ratio of house prices to disposable incomes), growth in disposable income per capita, short-term interest rates, long-term interest rates, credit growth, and changes in equity prices and working-age population.”
Ahhh: they include equity prices, interest rates and credit creation in their models to determine overvaluation.
I am amazed at the current and growing pent-up demand for Vancouver RE. I have been watching this and other RE forums for a couple of years now and I have also looked back in some of their archives way back to 2004.
If all the people who have been saying they are waiting for a price drop are truthful there must be a vast number of wealthy renters just sitting out there waiting for a bargain.
Many have been there for a long time and are now probably desperate to see huge declines so they can jump into the market at a price that isn’t too much higher than the price they missed years ago.
Who will start their rush into the market? What will trigger it? If common thought is they will rush in at a 10% drop you can bet the smarter ones will be rushing in at around 5% drop in order to beat the rush which ironically they will start. Of course these are the folks who missed the market so their record in market timing isn’t that good.
Now watch all the posts about not rushing in until there is a 25%, 30%, 50% (pick your own number) drop. Sigh!
Geezer, you are a real estate agent. Desperate to see huge declines: LMAO, I can write a check for Van Real Estate any day I want. It won\’t until it makes financial sense. Sorry to identify you as a real estate agent. ALL THE MILLIONAIRES I KNOW ARE RENTERS. And they intend to remain renters until it is cheaper to own. Oh ya, lemme buy a boat and a float plane while a wait.
Geezer: there are, what, 100 bears with cash on the sidelines who post to these sites? I think that we are actually quite rare in the population. There are20K condos under construction in Vancouver. Each of us 100 can have our choice of 20.
BTW, repeat this until you believe it is possible. ALL YOUNG MILLIONAIRES ARE RENTERS. It is a common myth that you have to own to be rich, and an amazingly stupid myth. Any butt-nutt who can evaluate securities would laugh at the proposition of buying van real estate. laugh and laugh and laugh. of course, if you have so much money and you WANT TO THROW IT AWAY as a measure of your extreme wealth and stupidity, well then you might buy. and I laugh at you as you buy. LOL. LMAO.
Jesse said:
““Renting is cheaper than owning.”
Renting is CURRENTLY cheaper than owning. In the long term, how do landlords make money if renting is cheaper than owning? Or are landlords perpetually subsidizing renters?”
This is exactly why people here are calling for a significant market correction. Currently, landlords are subsidizing renters. In the long term, this isn’t sustainable. Something has to change: rents go up, requiring a commensurate rise in incomes, or property values decline.
I only meant that I would want to price it at sure-to-sell price, because I think that, very soon, a lot of people will have stuff that sits on the market for months or even years and that, with each passing day it will be harder to make the sale. But what I would truly do is go to a Realtor (probably Rob, as he sell things that I would never imagine would sell at prices that seem ridiculous to me) and ask what price will be best for a sale.
I have to add that the percentage of ownership is staggeringly high now. Instead of Geezer\’s bogus idea that there are piles of people waiting in the sidelines, the statistics demonstrate it is the opposite that is true. We have to increase the renter pile to get back to equilibrium. We have burnt out the next several years of future of buyers. There are none left. Except me and WOW. We wait, ready to pounce when the timing is right, and totally oblivious to nutt-bar arguments about being priced out.
ALL YOUNG MILLIONAIRES ARE RENTERS.
Actually, I know young millionaires who are owners. Some of them even made some money in real estate in Vancouver. Because it doubled in value in 5 years. Not the greatest investment to get in today, but I’d say at least competitive with floats planes.
> I’d say at least competitive with floats planes.
You think float planes will go down 20% in the next two years? Uber-bear on float planes
Of course I am fascitious to some extent. But the point is to counter the outrageous societal values whereby people buy real estate to establish themselves as being successful. This is the very myth that must be shattered. Owning over-valued assets is stupid. Stupid. If real estate is over valued then you must sell, if you give a flying &(^%** about your net worth.
And of course, there are millionaire real estate people out there. GOOD FOR YOU. SELL NOW. KEEP YOUR MILLIONS. DON\”T BE THE IDIOT WHO LOST HIS MILLIONS>
But don\’t be fooled. Value wins all the time. Vancouver real estate is in for an awful tumble.
And I am serious about all the millionaires I know being renters.
Owning over-valued assets is stupid. Stupid.
exactly! in my multiple decades on this planet, i’ve learned that rich people aren’t stupid and stupid people don’t get rich unless by accident (check out your nearest casino for confirmation of this.)….. even SATV is slowing learning this
I sometimes wonder why I bother talking sense into this blog. Why, oh why. If a single person sits down and saves his butt from a 40 year mortgage at twice the underlying value of the asset then I feel as though I have spent my time wisely. I am just hoping 1 single person saves his sorry butt from 40 years of bending over for the banks. I have no doubt about where I am, but the mainstream media is farking people around something awful.
TD-you are right. We are vulnerable. But for the time being, commodities should remain high, inflation low, employment high, cash on hand high. All that really varies is confidence. And that is really unpredictable.
I am amazed at the current and growing pent-up demand for Vancouver RE.
I am amazed at the current and growing pent-up demand for Vancouver RE “For Sale” signage and the practically endless demand for “Price Reduced” stickers
BTW, float planes less than 100k. That is less than the loss on Van real estate over the next couple years on detached housing. Might as well live life to the fullest, buy that plane, and delay that house purchase.
Jeff:
I guess where I’m going with that is that list price isn’t always market value, and neither is sales price, but sales price is usually closer. If I was going to take issue with your scenario it would be with market value being set at $100. If it is at that level you should have got more than $96.90 (all things being equal). Anything less has to be explained by a balancing entry (seller wanted out quick, seller wanted no inconvenience, etc).
I think a better description (and I’m commenting from a postion of ignorance on that particular deal) would be that you listed it very close to market value and sold it very close to market value; list at $100, sell at $102, get a solid quick sale that you can take to the bank, even if the vendors stared out thinking market value was $105.
How do you know you’ve done that? Sell the first day to the first guy, there’s a chance you’ve undersold. But, if you expose the property to the market enough, and get enough feedback (either through unacepted offers, collapsed offers or “no thanks, its not for me” comments), you’ll know whether your sale price is close to market value. You know what I’m talking about, because you’ve seen it and you’ve asked yourself the question: Did I get as much as I could for my clients? (Let’s face it: most of ask that after every sale).
WoW/Jeff:
Competition is the spice of life. How can you be a Realtor without being competitive? I love it. Here’s my suggestion for TBJ: call my office and I’ll have the property priced realistically and I’ll see that it gets sold. Here’s my suggestion for Jeff: based on some of your recent comments you should come and work for me. It’ll be a lot different from where you’ve been, but you’ll prosper. The challenges you were complaining about recently are pretty much par for the course. You’ve demonstrated some talent for this business, and I’m confident that you can do well which ever way the market turns. I think you just need to see things in a different light. (I was very surprised by some of your recent comments. I was even more surprised by your comment a few weeks ago about your desire for a job that would allow you a good income and several months a year in the sun; you’ve got that job already).
Locutus:
I love floatplanes. You got one? Here’s why I ask: I buy rental real estate when it makes sense, and I don’t trade it. But I think I could buy a floatplane if I wanted, and I don’t rent, and I wouldn’t have to sell my house to do it. On the other hand, I do collect rent. I know, I know, I’m subsidizing someone, but somehow, someway, the books seem to balance and I make a modest profit. Does that make me an idiot?
Should you buy real estate at any price to establish yourself as succesful? No. Should you sell whenever a price peaks? Not necessarily.
Tongue out of cheek, you are right: value is very important, but not all of us are traders. Some of us are just crusty old owners.
But I think I could buy a floatplane if I wanted,
what does the mrs. think of this hairbrained scheme?
methinks she would have your gonads for bookends…..
Nah, she’s fine with it. The only proviso is I have to finish the house first. So, its next year or post Olympics, depending on who you talk to
Real estate agents/boards/govt. created a bullish environment for housing and now they are embarrassed to accept what’s happening.
We are heading for a balanced market? What does that mean?
We should start recording who is saying what and show them later.I would like to see some of these people go to jail as well for lying to the innocent people.
I wonder where are those UBC professors hiding who were saying all the time that prices won’t drop here for this and that reason…I want to see where are those intelligent professors now…
I heard banks have refused to give mortgages to lot of people recently…But don’t worry,we don’t have any subprime mortgage here…it’s just too many rich people living here in this city.
We will see how many of them are rich after couple of years
VHB, don’t bother trying to reason with Geezer. He bought his house in a1965 for $10k and he thinks he’ll live to 2100.
He bought his house in a1965 for $10k and he thinks he’ll live to 2100.
The year is 2090 and Prime Minister Cam Muir Jr. is promising that interest rates will drop far enough to enable the average citizen to purchase a home with government assistance. Of course the gov’t will own a portion of your humble abode but that’s better than paying rent.
Rob:
What a nice message to arrive home to… thanks for the offer.
I was actually just out sitting on English Bay in the sunshine and reflecting on my successes and my skills and contemplating a career change. It’s not that I fear this market, I don’t know if I like talking about it so negatively. I don’t like how values have become so high in this city that real estate has become a “speculative investment” rather than a “home”.
Maybe I have too much time on my hands to think too much. Maybe I need a change. Maybe with a little more sunshine I’ll change my tune. Thanks for noticing my whining.
I have been renting in Richmond since migrating here in 2005. I can buy a condo or townhouse for cash at current price. I don’t like to buy at these ridiculous price bec I know I can buy a house if I wait a bit longer. My bank and speculator friends had been pressuring me to buy. Some would laugh at me when I say I would wait for housing price to go down. They say housing price never goes down. But it goes against my experience during the Asian crisis when real estate, stocks drop after the bull market. I guess with real estate bubble bursting (at long last, )I would soon be laughing at them.
We can all probably agree that since there are still buyers out there that many people are not really up to speed with the current list/sell ratios…or better, the current flood of properties going onto the market.
When do annual property assessments get mailed out? And will this be the determining factor for all those that don’t know to “GET THE F*&K OUT!?
ps…I personally know Robby…he’s a good man and helluva hard competitor…if you think you can stick handle around this guy unscathed, think again while you get a stinky glove up side the grill
Vancouver–its different here …
In many parts of California, prices pretty much flatlined from fall ‘05 to fall ‘07. Wafted up and down, but didn’t move much.
In an ordinary crash, that’s what would happen in Van, but there’s a few unique features to Vancouver–”its different here”
* bigger price runup
* pre-runup baseline price less affordable
* lower wages
* higher % of units owned by specuvestors
* rent:mortgage ratio so out of whack folks will go bankrupt in a matter of months, not years.
* B.I.G. drop in employment coming online.
* Many other housing markets have recently crashed, proving not only that it *can* happen, but essentially proving it *will* happen.
Yup, its different here.
This is not California 2005.
Again,
Whybuywhenucanrent?
**Forecasting a 50% drop in Van area RE prices by 2012**
(Crossposted to Paul B’s blog, too — maybe I’ll change my tagline…)
Marko–
Here’s another idea. You and the family take a close look at how all the US markets are tanking tanking tanking.
Plan on renting for 3 yrs.
And up your rental budget $1000 – $2000. You’ll soon be out of the ratrace, you’ll get a top quality condo or large, clean house in a desirable neighbourhood.
You’ll pay $36K – 72K extra over the next 3 yrs, and save 100 – 500 K.
No matter how much the market crashes, after the Olympics will be a better time to buy.
For TJR–
If you like your place, don’t like to move, don’t plan to move, don’t mind staying there for 10 yrs+, then keep it.
If you might move, might want to upgrade, like the looks of $200K in your RRSP more than you dread the prospect of being a bit transient, then sell.
Call Rob, and ask Jeff to contact Rob’s office and you can link to him that way. Talk to 2 or more Realtors before deciding who to go with, it will depend on whether you like their style, whether they know your market, whether they have time/energy to put into your property now, etc.
Now is still a great time to sell. Market is still very near the top, buyers haven’t dried up, you can probably get a fairly long completion date to have a chance to find a good place to rent. Market isn’t as hot as it was 6 mos ago, but look at the US markets and they’re slowly slowly going down, now is almost certainly better than September, Jan 09, May 09, May 10, May ‘11, etc.
Again,
Whybuywhenucanrent?
Vancouver — its different here!
A story of interest: http://www.cbc.ca/money/story/2008/05/15/housing2.html?ref=rss
“A story of interest:”
Holly molly, it’s like he went out of his way to say the opposite of the truth in point form. Weird.
Scotiabank’s comments and mine:
Home prices in Canada are not overvalued.
Perhaps not in PEI but in Vancouver they are up 100%+ inflation adjusted in the past 20 years.
There’s little evidence of widespread speculation.
Even the builders are suprised at how many people have bought their condo’s and not moved in. Drive by any new building and see that 2/3 of the lights are off on Wed night.
Canada’s housing market is not overbuilt.
4000+ new condo’s completed in 2009 in Vancouver! Get real.
Households are not over-leveraged, noting that mortgage carrying costs as a share of disposable income are historically low.
Didn’t I just read that the average family needs 80% of pretax income to cover the mortgage on the median priced home in Vancouver? Again, maybe in PEI homes are cheap but not here!
Overall mortgage quality is still sound, as Canadian lending standards are tighter than those in the U.S.
This is 100% true. But the fact that 40% of all new mortgages are 40 yr am’s is very scary and says that the people who can afford to buy have bought and the people who can’t are getting 40 yr am’s with 0 down!
LOOK OUT BELOW VANCOUVER!!!!
It is not different this time.
McLovin
ALL YOUNG MILLIONAIRES ARE RENTERS?????
i have to say ,this is false….everyone i know that is wealthy (young or old) owns multiple properties that they purchased over time. im in my early 30s and pretty much everyone I know owns at least 1 property. you gotta start somewhere and you cant always wait for crashes, ask anyone who has a real estate portfolio – you dont unload all your cards just b/c the market may fall. you may sell, hold, trade up. but you never fold.
reese, if you’re using confusing poker analogies, you don’t go all in on every hand. Wait for the next deal and see what comes up, i.e. wait for next year. I know some Yankee players that are making out like bandits these days.
My friends are renters, they can buy the entire city of Vancouver for cash; they dont want to, because the numbers dont make sense.
My friends’ friends sold their properties a number of years ago, they are renting and sitting on bundles of cash and renting. they dont buy; they are wating for the City of Vancouver give them free properties in Coal habour.
While complaining about the rental condition in a low basement, my friends save a lot of money, and have 7 to 8 figures returned on their investment.
And all of them believe oil would be down to $45/barrel, gasoline would be back to $.35/litre, gold would be falling to $285/oz; and there would be abundant of wheat, flax, and rice.
Vocie of reason attempt one; minus hyperbole:
I appreciate that Scotiabank is looking beyond the current psychology and talking long-term trends. They are right, I think, that most of Canada has not gone too much beyond the long-term trend. It leaves me wondering if they factor inflation and/or affordability into things, but I buy their general point, I think. Not enthusiastically, but I believe that nation-wide it’s probably true.
Here’s the rub though — that was true in the US as well. In fact, for the first year of the RE meltdown, only those formerly spiking “hot” markets sank significantly. Even now, some local markets in the US are only suffering moderate hurt. But it has proven to be catching. Now, few people see it as a purely local phenomenon.
So, all I would ask is that you consider the question here: Have parts of Canada sailed well over the long-term trend in RE values in recent years or not? If so, is Vancouver one of them? Victoria? Kelowna? Calgary? Edmonton?
Look to the graph of RE prices put out by REBGV and FVREB — does it scoop skyward at an acclereated pace or not? Look to Sauder’s data from Vancouver — Have RE price increases exceeded inflation for the longest period since they started recording this, or not? Has the inflation-adjusted price of RE reached it’s highest levels ever by a longshot, or not? Look at the measures of affordability published by the banks and by demographia — historic levels or not?
So, following Scotiabank’s reasoning to it’s logical conclusion: While Canada as a whole may not be at 1981 or 1989 levels of vulnerability, some parts of Canada are more vulnerable to larger price corrections. Vancouver in particular? Sure, why not?
Jeff:
“It’s not that I fear this market, I don’t know if I like talking about it so negatively. ” I can relate to that, but that’s part of what I mean when I say I think you need to look at things a little differently.
Don’t take this the wrong way, because on the surface it will sound harsh, but the goal of the question is something different: who cares about your opinion on the market? Really? Who cares, and why?
I’ll tell you who doesn’t care. Its the market. Despite what some conspiracy theorists think, neither you nor I make the market. From the market’s POV your opinion and mine are irrelevant. The biggest impact we can have on the market is telling someone to make a bad decision and buy too high or sell too low.
Who does care about your opinion? People who trust you and need some direction and advice. That relationship is built in spite of market direction and endures whatever comes down the pike. Regardless of what the market does, people will need your service, and in a market like the one it looks like we’re entering now, they’ll need it more than ever.
If you want to feel good about what you sell I think you need to realize that you aren’t selling real estate. You’re selling yourself. Everything you do needs to add value, whether you’re buying, selling or telling someone to wait. If we go back to your example about the under market list, overlist sell, what’s the most important result? The price achieved or the satisfaction of the customer who needed help?
Pat Bell:
Assesments come out in January. Future poll question? Will assessments be above market value, and if so, by how much?
Although I still have my doubts about a significant turnaround, this article reads like BS to me. For instance, its tagline talks about first-time buyers and it goes on to discuss multi-million-dollar properties. It’s poorly written and there are no real stats.
http://tinyurl.com/4h5cke
“It’s poorly written and there are no real stats.”
But they do quote two real estate agents and someone from CMHC.