Sunday Night Update
It was nice to read in comments that someone was looking forward to this update. I’ve been considering chucking the whole blog, and those thoughts become most common Sunday night after a long day working on my house! Mudding and taping now, and its really starting to change. Soon the planer, radial arm saw and router table go to work 
!
The market remains strong. We sold more than we listed last week (sorry WoW). Inventory for REBGV and FVREB attached and detached was 19,077, of which 5,608, or 29.4%, were over 90s. For the REBGV the numbers were 12,125, 3,359 and 27.70%. For the FVREB the numbers were 6,952, 2,249 and 32.35%.
REBGV detached and attached numbers for last week were 1,095 new listings, 389 price changes, and 811 sales for a sell/list of 74.06%.
12,125/(811*4.25) = 3.52 MOI.
FVREB detached and attached numbers for last week were 519 new listings, 156 price changes, and 398 sales for a sell/list of 76.69%.
6,952/(398 *4.25)= 4.11 MOI.
Combined detached and attached numbers for last week were 1,614 new listings, 545 price changes, and 1,209 sales. Sell/list was 74.90%. 19,077/(1,209*4.25) = 3.71 MOI.
For those wanting YoY figures, the best I can do right now is a quick link to last October. Take a look and let me knw what you think of the comparisons.
First chart is REBGV, second is the Valley, third is combined.
Rob’s Report Generator
Data for File: SalesOct182009REBGV.csv
| All Properties | |||||
|---|---|---|---|---|---|
| Sales | Average List Price of Sales | Average Sales Price | Difference ($) | Difference (%) | DOM |
| 811 | $669,345.99 | $650,909.60 | -$18,436.39 | -1.99% | 45 |
| Attached Properties | |||||
| Sales | Average List Price of Sales | Average Sales Price | Difference ($) | Difference (%) | DOM |
| 454 | $465,634.44 | $456,158.38 | -$9,476.06 | -1.58% | 37 |
| Detached Properties | |||||
| Sales | Average List Price of Sales | Average Sales Price | Difference ($) | Difference (%) | DOM |
| 345 | $937,176.75 | $908,530.66 | -$28,646.09 | -2.38% | 49 |
Data for File: SalesOct182009FVREB.csv
| All Properties | |||||
|---|---|---|---|---|---|
| Sales | Average List Price of Sales | Average Sales Price | Difference ($) | Difference (%) | DOM |
| 398 | $449,120.16 | $436,915.09 | -$12,205.07 | -2.42% | 54 |
| Attached Properties | |||||
| Sales | Average List Price of Sales | Average Sales Price | Difference ($) | Difference (%) | DOM |
| 138 | $285,631.01 | $278,239.86 | -$7,391.15 | -2.64% | 52 |
| Detached Properties | |||||
| Sales | Average List Price of Sales | Average Sales Price | Difference ($) | Difference (%) | DOM |
| 237 | $556,066.86 | $540,354.88 | -$15,711.98 | -2.36% | 51 |
Data for File: SalesOct182009REBGVFVREB.csv
| All Properties | |||||
|---|---|---|---|---|---|
| Sales | Average List Price of Sales | Average Sales Price | Difference ($) | Difference (%) | DOM |
| 1209 | $596,848.15 | $580,463.10 | -$16,385.05 | -2.13% | 48 |
| Attached Properties | |||||
| Sales | Average List Price of Sales | Average Sales Price | Difference ($) | Difference (%) | DOM |
| 592 | $423,674.18 | $414,684.13 | -$8,990.05 | -1.83% | 41 |
| Detached Properties | |||||
| Sales | Average List Price of Sales | Average Sales Price | Difference ($) | Difference (%) | DOM |
| 582 | $781,982.52 | $758,603.41 | -$23,379.11 | -2.37% | 50 |
39 comments
there was a great interview on am radio this weekend, a RE expert (very knowledgable fellow, I forget his name) spoke about the comparisions to last year’s data and noted that last year was a pretty bunk year, so comparisions look great now…but wait as we roll forward into next spring, and we look at yoy volumes, etc. Anyways, interesting times, he made some great points – anyone else catch it?
Yes Rob, tons of us here greatly value this blog and the details/analysis you provide – without question.
Its no surprise the market is still hot. About 30,000 to 40,000 residences are sold in the REBGV each year. In that region there are a million wage earners? So it looks like only the top 3% to 4% of wage earners are buying real estate, and the top 5% ARE getting richer.
This market can run for another decade. More if the increase in population is in the top 20% of net worth, or wage earners. Rich mainland Chinese for example.
it was interesting to note that the RE expert on the am news/talkshow was very bearish about US RE, indicating that the bulk of foreclosures are still to come (in his view not set to spike for a couple of years at least), and that prices south of the border have a long way to fall. We was soft in his references to the local market, but it seemed to me that he was indicating that, well, lots of folks are rushing the market now before its too late, interest rates rise, HST kicks in, etc….he said that his contacts at CMHC are indicating they have never been this busy (due to 5-10% down/35 year amorts).
Interesting times for certian.
Anonymous #3:
I know someone who just bought a house in the Phoenix area for $65,000. Three bedroom, 2 story, great rental. True, he has to find a tenant, etc., but at $65k for a house, low interest rates and an $8000 gift from the govt., its hard to see prices falling a lot further. BTW, as an investor his competition was…first time buyers. In Phoenix, at least, its cheaper to buy than to rent, if you can get financing or if you have the cash.
Rob,
I was under the impression that the 8K gift from the US gov was for first time buyers only. Also I would assume it is only for US residents.
Why would he/she buy an investment house if he/she doesnt have a place of their own?
Davers:
It is for US homebuyers, and I think it is for FTBs. I didn’t mean to imply that Canadian investors were getting it. On the other hand, US realtor blogs mention Canadian investors, they’ve been written about in the NYT. My point is that with low interest rates, $8k from the feds, plus state incentives, (and calls to extend and expand the program) its tough to blithely accept that a $65k house has “a lot further to fall”.
We were in Las Vegas recently, and I saw nice 3 year old studio condos on a waterfront development in Lake Las Vegas listed for $36,000. Hard to see how this could fall much further? Although I suppose some might argue that anything built in the middle of a desert should fall to near $0.
Very interesting point, Usurper. I’ve never thought of it that way.
Keep going, Rob!!!
Userper 2 – That may be true, but what happens in year two when the top 3-4% of wage earners have already made their purchase? Do these same individuals continue to purchase property every year? Or does every immigrant to Vancouver need to be in that top 3-4%?
You state that the market can run for another decade. What happens at the end of the decade? Unsustainable. You contradict yourself by putting and end time to how long the market can run.
If there are more houses than there are people to live in them, and you can buy another one for less, or a condo for next to nothing, then yes, prices can fall far below what makes sense. Why would you buy for 3/4 rent when around the corner you could buy for 1/2 rent. And the real peak in foreclosures is yet to hit. http://tinyurl.com/yhqyb4s
See worthless condos. http://tinyurl.com/yfessao Apropos to Rob #4, this is in Arizona. Florida is close behind, and they also have a very serious mold problem if they are left empty any length of time.
See 19 million empty houses in the US. http://tinyurl.com/yj5rept
But do watch out for toxic drywall that also corrodes anything metal when your looking to invest. http://tinyurl.com/lac7q5
But hey, it’s different here. Or is it?
“at least 929,000 square metres were imported through Vancouver between 2001 and 2006, all bound for Canadian destinations.” http://tinyurl.com/dxy7d8
Also, Rob is thinking of shutting down the blog? Please tell us you aren’t serious! Or is that just a ploy to ask for some lovin’? Everyone all together now, Rob needs a group hug.
XOXOX
Say it ain’t so Rob … if you the blog down, I’ll just spend more time in the bars.
-
whoops … that should’ve been “if you ’shut’ the blog down” … my fingers hit submit before my brain engaged. happens all the time.
-
“Its no surprise the market is still hot. About 30,000 to 40,000 residences are sold in the REBGV each year. In that region there are a million wage earners? So it looks like only the top 3% to 4% of wage earners are buying real estate, and the top 5% ARE getting richer.”
Your numbers are indeed correct (3-4% of 1million is indeed 30-40K). The problem is in assuming this 3-4% comes mostly from the TOP wage earners. My understanding was that the recent surge in sales is largely due to a pool of FTB’s who largely could not afford before the rates fell to record lows. This pool does not sound like the TOP wage earners pool to me.
Usurper – Isn’t this just another variation of the “it’s different here” theme to explain an irrational market?
One more on Robs comment at #4
” In Phoenix, at least, its cheaper to buy than to rent, if you can get financing or if you have the cash.”
Strikes me that that means strong downward pressure on rents, if the supply of cheaper-than-rent houses is sufficient. Given the foreclosure numbers and the extent of the preceding building boom that inventory seems sufficient. Why are people so willing to believe prices can only be above fundamental value and not below?
Now, those excess (and empty) houses will deteriorate over time and get bulldozed so there is reason to inventory will ease and prices won’t stay below fundamentals for too long, but there is no reason to call a bottom just yet.
reason to HOPE inventory …
AC:
“Strikes me that that means strong downward pressure on rents, if the supply of cheaper-than-rent houses is sufficient.”
We’ll see, but not necessarily, especially if the buyers require cash and the renters were foreclosed on. The thinking is that to buy you need cash and good credit, while to rent you need income and a foreclosure sad story to explain the bad credit. Look at the next post for fun.
Am I shutting the blog down? Like I said, every Sunday night when I start doing the numbers. The cure? Hitting the “publish” button!
XB 13…you wrote that from the Bar…you old partier, you
I actually advised my brother, a “starving” toronto “artist” to sell his DT townhouse and use about 1/3 of the proceeds to buy a place in AZ or NV he could live more-or-less free and clear for 6 months of the year. He reckons that’s not such a great idea and if he hangs on for another 12 years he’s got it free and clear. Free and clear in Toronto..live the dream
ceejay:
That is too funny! And can you imagine how cheap it is to see the Leafs in the desert?
Rob:
Not quite as simple as drawing a line between renters and owners like that.
Foreclosed-upon renters who have decent income may buy again and remove themselves from the rental pool again, and with the kind of inventory coming up and such very attractive metrics investors will flock in, all looking for tenants. Things will balance again, and possibly careen wildly off balance the other way on momentum. After such an incredible imbalance that the whole credit bubble is it is unreasonable to expect things to stabilize without some wild swings. The states with the most attractive prices are the ones that had the biggest boom during the boom years, one huge problem is they are now the ones with the worst unemployment problems as all the construction workers/real estate investors are now neither, and are sharing three to a one-bed condo and eating off foodstamps.
That said there is some amazing opportunities to be had somewhere and sometime. You do do some investment work down there, I think? We do have too much idle capital right now, looks like we aren’t buying in Vancouver just yet, will I get a chance to talk about it this weekend with you? Send me an email.
“Hard to see how this could fall much further?”
The cheap homes won’t collapse further, but the higher prices homes could. So, there will be even more homes available at that $36k price point if that’s the price too be just too tempting for investors outside the region to pass up. Also note, prices need not decline – they could just stagnate and fester with 0% growth for 5+ years. This is just one scenario, prices could start rising at 10%+ per year – no one can predict what will happen.
Rob wrote
>> Mudding and taping now, and its really starting to change. Soon the
>> planer, radial arm saw and router table go to work
That’s called “the intrinsic value of home ownership,” right?
WBWUCR’t'13?
p.s. I posted a reply to you on last week’s update — sorry, I wasn’t in the mood to get in a fiery debate ;^)
Fodder for discussion — US markets have made distinct upticks in the last couple months.
http://seattlebubble.com/blog/wp-content/uploads/2009/09/Case-ShillerHPI_Decline-From-Peak_2009.07.png
I wonder how much of this is from record-low 30 yr fixed mortgages and $8K gifts to first-time buyers? I don’t think there’s been any “supply/demand” or other market reasons for the uptick…
WBWUCR’t'13?
This one is for WoW –
http://seattlebubble.com/blog/wp-content/uploads/2009/09/Case-ShillerHPI_All2009.07.png (The Y axis is “YOY change”)
Note that all US markets have picked up this summer, regardless of how far they went up, how long since they peaked, and how far they went down. It’s the result of a national government policy to reinflate housing prices. And it’s working. For now.
Seattle and Portland were the last to peak, so they’ve dropped for the smallest number of months, but they’re kicking back up at the exact same time as the rest of the market.
So, where will this go? It’s certainly not much in the realm of conventional market dynamics, but how much effort US politicians are willing to go to to make sure that things hold together. And, since no politician wants to be responsible for letting GDII take root, and everyone wants credit for saving the economy, it’s pretty easy to guess where things will go next.
Note that all this is a world of difference from a year ago.
Canada? How much of Canada is in a serious bubble? Certainly BC and AB, and Sask? Not enough to swing national policy in favour of house price inflation. Throw in Toronto? You’re good to go.
How will this all pan out? Gov’t debt growing faster than GDP by a fair margin? The US $ is finally getting the rout everyone expected a year ago. Will Canada sail high above it all? Will the US tanking cut off export demand, and the rising Loonie further cut demand?
Hell, I say if you and the wife want a house, go out and buy one. Keep your job, keep your marriage, and it won’t much matter if it turns out you could have had a 4-bedroom 2-story instead of a 3-bedroom bungalow. Entertaining friends is really a matter of generating scintillating conversation, not about having fancy turrets…
My $0.02
WBWUCR’t'13? (provided no household members are itching to own).
And you can lock in a killer-low 5 yr interest rate. Ya have to figure that interest rates are going to wander back up at some point, possibly skyrocket. Might as well borrow a million at 4% while you have the chance, or whatever mortgage you can get for whatever house you want…
Why rent when you want to buy and it could take 5 yrs for prices to hit bottom?
Here’s everything you could ever want in a house, WoW. I think I once went to a garage sale at this place. Darling house, pretty big on the inside, on a quiet corner of a quiet street. Great yard for kids, unpretentious little pocket of the west side (in that 16th/12th/Alma/Macdonald sector).
V792717
<a href=http://www.realtylink.org/prop_search/Detail.cfm?areatitle=&ARPK=&ComID=&agentid=&MLS=V792717&rowc=12&rowp=11&BCD=GV&imdp=9&RSPP=5&AIDL=26&SRTB=P_Price&ERTA=False&MNAGE=0&MXAGE=200&MNBT=0&MNBD=0&PTYTID=5&MNPRC=200000&MXPRC=9400000&SCTP=RS> 3115 WATERLOO ST </a>
WRWUCBT?
Jeff, you out there? What do you make if the different world we’re in? Will the new consumer and gov’t debt work out in the medium run? The long run?
You have to admit they’ve done a pretty slick turnaround on the U.S. front. Unsustainable as it may be, they have house prices and stocks bubbling up again, giving everyone the paper wealth they need to refinance debt.
romeo?
WBWUCR’t'13?
Not that I wouldn’t be surprised to see everything come crashing down again. Harder than ever. Fast. Wouldn’t be surprised a bit.
But I have a fair bit of faith in the Obama’s team to hold everything together with smoke, mirrors, and handouts.
The one thing that would really sink the whole SS USA would be interest rates shooting up. If nobody is able to finance the US gov’t’s borrowing habit, and interest rates shoot up, and the Obama team’s smoke blows away and mirrors crack, then it’s House of Cards vs. Tornado.
WBWUCR’t'13?
p.s. that house for WoW is listed at $1.3M.
Cute little place, with a full 2nd story tucked in behind that high-pitched roof. Great yard for gin & tonic – type parties in the evening, kids playing during the day. I’ve walked past it a zillion times, it always catches my eye. Easy walk to 10th/Alma, Choices, the good produce markets on Broadway, Yacht Club, Jericho Beach, etc. **Much** more interesting ‘hood than Kerrisdale…
http://www.bing.com/maps/default.aspx?v=2&FORM=LMLTCP&cp=s68smy4r1fdm&style=b&lvl=2&tilt=-90&dir=0&alt=-1000&phx=0&phy=0&phscl=1&scene=29232223&encType=1
Whybuy:
“I posted a reply to you on last week’s update — sorry, I wasn’t in the mood to get in a fiery debate ;^)”
and
“Last time we debated this we agreed to disagree. I don’t have any further comments”.
and
“I did do a quick survey of random Vancouver Realtors from Google, and, to their credit, they weren’t as schmarmy as I recall them being the last time I looked a year or so ago.”
and most damning of all:
“I just got this little invite from a list I’m subscribed to. I think the assumption that “Realtors are pro-Real Estate” is a pretty safe one to make…”
Let’s be clear on what we’re (at least what I’m) debating: Its not safe to assume that I’m a bull simply because you happen to be of the opinion that all realtors want the market to always rise (which is a crazy opinion that doesn’t bear any serious criticism).
To offer support for the assumption or the opinion (not sure if you’re arguing that I’m a bull or that realtors in general want the market to always rise) you submitted evidence from a non-realtor and treated it as a realtor’s opinion. Point of fact – Ozzie Jurock makes a living selling seminars. He’s not a realtor. I won’t speak ill of the man, or dwell on his time in the real estate industry, but there are many who will do exactly that. His status as a realtor is easy to verify, btw, and someone of your internet proficiency should be on top of that kind of stuff. Go to the Real Estate Council of BC and check licensee status.
Search google and determining that the subset of realtors with websites aren’t as schmarmy as you recall them being last year is pretty poor evidence of anything as well.
Bottom line: you need to get out in front of this bombshell in order to maintain your sterling credibility. Admit that Ozzie is not a realtor and that I’m not a bull and I won’t bring up the collapse of a chartered Canadian bank call that someone once made…
(Seriously, look at the REC site and look at the licencing search – handy link from time to time).
WBWUCR – In a constantly rising market, wouldn’t all would-be sellers in “wait and see” mode, after all by waiting an extra month they might make an extra few hundred or thousand? Thus, there would be fewer listings. Even if buyers were plentiful, there’d still be fewer properties available to spread between the available agents. So that would mean less commission from sellers, and less commission from buyers. How’s that a good thing, if you’re a realtor?
Oh my god, a capitulation (half-hearted as it may be) from WBWYCR. The end must be truly near.
Rob, you’re correct, my email was not from a licensed Realtor.
It still doesn’t change my experience, over 10 years of buying, holding, selling properties (in small quantities) that Realtors are a pretty schmarmy bunch.
I haven’t had much cause for interaction with any in the last year, but my one experience did confirm, to my satisfaction, that things haven’t changed since my previous exchanges.
This recent encounter was with three genuinely nice guys, who did reasonably well in giving me information and helping me make an informed decision, but in the end I couldn’t help but to feel that I’d been had.
Cheers,
WBWUCR’t'13?
>> that Realtors are a pretty schmarmy bunch.
And that they’re schmarmy because
1) There’s no standard set of training and very loose regulations, so even folks not predisposed to be schmarmy need to turn schmarmy to be competitive, and
2) The profession attracts naturally schmarmy people.
Your mileage may vary,
WBWUCR’t'13?
and, of course, that’s
>> The profession attracts naturally schmarmy people
because it is runs on an operational system that that rewards schmarminess.
a) almost all customers are as naive as heck
b) all sales are so specialized that there’s no way to get caught when you inflate a price, ignore a known preexisting condition, etc.
c) information about comparable prices and etc. is off limits to the buyer
d) the set of knowledge and skills needed to understand the market, understand the transaction process, and be a good salesperson is so broad that customers will be shortchanged in at least one of these criteria in almost every Realtor
e) All this favors a Realtor that can make a nice first impression and work with people well, generally at the expense of the wonkish knowledge that is really needed to match people up with the right house.
My $0.02, your experience may vary. (Okay, you talked me into it — let’s hear a rebuttal, and maybe I’ll hit some open houses and tell you the drivel I hear coming from agents…)
WBWUCR’t'13?
Whybuy:
OK, thanks for the soft lob and opportunity to differentiate myself. Not exactly what I was looking for, but good post fodder!
Rob wrote
>> OK, thanks for the soft lob and opportunity…
You bet!
WBWUCR’t'13?