Vancouver Real Estate – Stampede Olympics

Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.
– Charles Mackay

Wolf and Kwan Start Stampede – Maybe!

Last week, the president of the Real Estate Board of Greater Vancouver said the market has dropped 2.1%. Now David Wolf and Carolyn Kwan, two economists from Merrill Lynch tell us in their Canada Study entitled “Peaked: Canada’s market in depth” (which I have not found on the web), that Western Canada is in a housing slump. The study focused on current prices, affordability and long-term trends. The story made Globe and Mail’s, front page news as it did on National Post and prompted a few segments on CTV

Wolf and Kwan’s conclusions –

“we think we’ve peaked in terms of the housing valuations and we’re in a period of sustained decline going forward. As people buy fewer homes, we’ll also expect them to buy fewer of the things that go into new homes, for example drapes and furniture and things like that”, said Kwan

Highlights:

• Regina, Saskatoon, Vancouver, Victoria, Calgary, Edmonton are all over valued by more than 10%
• Vancouver and Victoria by 34%
• Saskatchewan by 50%
• Sudbury and Montreal also overvalued.
• over building is part of the problem – layoffs may not be far away
• twice as many homes for sale as being sold

We’ve Heard it Before

Economists keep reinforcing that we Canadians and our stringent credit rules have an advantage over the flexible credit plans that allowed people in the U.S. to borrow money to buy homes they could not afford. The Canadian consensus is that the market downturn while not pleasant, will not be as bad as the housing slump being suffered in the U.S. I wonder how you measure that pain threshold?

You Can’t Say You Weren’t Told

Scotia Bank’s Adrienne Warren called it back in May in her piece entitled “Canada’s Housing Market Comes Off The Boil” where she declares that “overall sales volumes in 2008 to total about 15% below last year’s record levels”. Back then when compared to Wolf and Kwan , she was 50% right. Warren may have more to say soon but I doubt it will be pretty.

Stampede? How Not To Get Trampled – My Opinion!

Got a Vancouver Real Estate question? Always happy to answer it. Call or send me an email or twitter me @yattermatters.

Larry

Other thoughts:

Vancouver Real Estate – La-La-La-La-Laaaaaaaaahhhh!

Vancouver Real Estate – West Side Market Update

Vancouver Real Estate – You are Not Alone