Yoh Adrienne – Does Vancouver Real Estate Stand a Chance?

Rocky (1976) Sylvester Stallone, Antonio Tarvery

Adrienne Warren of Scotiabank Group had a lot to say in her May 15th analysis of the Real Estate Market.

At the risk of Rocky Balboa making me see stars, a summary of her analysis looks like this:

• there is now convincing evidence that Canada’s housing market has come off the boil.
• home resales, having fallen…running about 15% below last summer’s historic peak
• cracks are appearing on the new home front
• inhospitable weather…likely a dampening factor
• sales volumes in 2008 to total about 15% below last year’s record levels
• home prices to increase on average by about 5%.
• Calgary and Edmonton have officially moved into buyers’ territory.
• risk of a major correction still low
• home prices in Canada are not substantially over valued
• little evidence of widespread speculative home buying
• inventories of unsold homes are trending higher, the number of unabsorbed units, including
  condominiums, remains well below prior cycle peaks in most major centres
• households, for their part, are not overleveraged
• mortgage carrying costs as a share of disposable incomes are historically low
• mortgage quality is still sound
• at the end of the day, we predict a soft landing for the Canadian housing market, with somewhat lower sales and construction, and a period of relatively flat inflation-adjusted home prices.
• major risk to the outlook would be a deeper and more protracted downturn in the U.S. economy

Bluster

Balanced news from the ring announcer. The exception – her take on the weather. In Vancouver we don’t get bogged down in snow like the east. We take the hat tip from Rocky and run the Grouse Grind while thinking we’re different and have a chance. Rain doesn’t dampen the bluster in this town.

Throwing the Fight

Bluster won’t keep us in the ring if the big southern challenger throws the fight. Keep your eye on the US economy, she says. They have taken some heavy hits. Another one-two punch could bring them to their knees. There’s a chance if this happens that Canadian real estate might also hear the ten count.

Don’t Waste Your Punches

The corner is saying we are in Round 5, half way to a more rationale stable market. It could be a long and hard five rounds. To get through those rounds Rocky’s message to home sellers is this – you got a fight on your hands! There is a lot of tough competition waiting to take your Sold Title. Your first price punch must be wickedly strong. Buff up the six packs and deliver a straight to the head strong right price hook. Keep your eyes on the prize with your gloves up and ready. You may have to do a lot of dancing before you land a knock out punch and the Just Sold title.

Got a Vancouver Real Estate question? I’ll do my best to answer it. Call or send me an email.

Scotiabanks Full Report
Globe and Mail Report on Business