Vancouver Real Estate – Deflating Before Climax

Feeling Pain

Many illnesses are accompanied by subtle indicators of something that seems not quite right. With our bodies it might be an ache here or a pain there. Airlines constantly X-ray engine parts searching for early warnings of metal fatique that appears as hairline fractures.

Diagnosis

Economies don’t move swiftly and when in distress it takes time to percolate. There is no X-ray for an economy in motion so the signs are not easy to recognize. Looking back is much easier and often the issues become fundamental once the problem is diagnosed.

Economists, pundits, Realtors all to some degree, have commented on the suddenness and downward impact we are currently experiencing in our Vancouver Real Estate market. It’s as if a bubble burst. In retrospect the air was slowly leaking out, but we didn’t pay attention.

Yin and Yang

Bears out there kept pointing at numbers showing impossible price increases. Verified by ever increasing prices they shouted that this could not go on forever. Some spawned theories that spanned the space between sublime and ridiculous. Mostly, it was just good old gut feeling.

Others claimed that the upward market would continue basing their understanding on the amongst other things, the fundamentals of full employment, higher wages, political policies and low interest rates. The two were opposing forces in the battle of understanding the illness.

Must Be More

I wondered if there are any signs that might explain the malady.

Fumbling around the web I found Google’s Insight and Alexa. Alexa was not new to me, Insight was. Each produces trend graphs based on internet traffic to sites or search terms.

Alone

Apart, neither would pointedly suggest they were the single cause of the decline. Viewed together they present a different perspective.

Together

Applying a bit of fuzzy logic a common thread begins to evolve. The Alexa graph deals with the number of visits to the MLS/Realtor.ca site during the period of one year. While this may not be a sufficient sample there is evidence that the number of visits to the site has declined during the past year. During a longer period of time, Insight measured the visits based on the search terms Vancouver real estate, Vancouver homes and Vancouver condos. Both recorded these hits from global search patterns. Both recorded declines in consumer interest.

Signs

Together they suggest that the decline in our market started a number of years ago reaching climax during the spring of 2008. Introduce the Average Price graph from the Vancouver Real Estate Board and the picture completes. A correlation appears between consumer interest and price. Simply, as the prices continued to increase the interest in searches related to property declined. That decline halted this spring. A common term to describe this result is called the Affordability Factor.

Collateral Illness

As a Buyer, your savings account and ability to service a mortgage was telling you this in advance. As a Seller the problem is more accute. Buyers still want to buy, but if your asking price is beyond that which a Buyer is willing and able to pay, your home will not sell.

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I’m always happy to answer your Vancouver Real Estate question? Call or send me an email Twitter or Skype me at YatterMatters.

Larry

*Disclaimer: Statistics Courtesy REBGV. While believed to be accurate they are not guaranteed. **Numbers provided may vary as they are dynamically posted by the REBGV.

About Larry Yatkowsky

Larry is a recognized real estate expert. A veteran professional, his experienced counsel leads Vancouverites in his west side community to place their trust in a man passionate about his work. Uncompromising ethics bring a balanced approach to realizing your real estate dreams.

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*Disclaimer: Statistics Courtesy REBGV. While believed to be accurate they are not guaranteed.
**Numbers provided may vary as they are dynamically posted by the REBGV.

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