Vancouver Diamonds and Fur

A Coronation

©Imperial State Crown

Scotiabank Group’s Adrienne Warren’s report is another jewel in a crown of dismal news.

Royal Ascent

With certainty, this report assures ascent to the shared throne occupied by Muir, Pastrik, and Somerville.

Her latest missive entitled “Deepening Downturn in North American Real Estate Activity” re-confirms that we here in Vancouver, are still in for a hell of a downhill ride.

Hightlights of her “Residential Outlook — Canada”:

  • Canadian housing starts are down about 8% from 2004-2007. there was a double-digit decline in single-family homes, with most of falloff in B.C. and Alberta.
  • Rising unsold inventory, falling new home prices, greater resale competition and reduced credit availability, all contributed to the slowdown.
  • starts tumbled to an eight-year low of only 153,500 annualized units in January.
  • Resale activity has cooled even more forcefully.
  • MLS sales volumes fell 17% last year, albeit from record levels in 2007 amid reduced affordability, rising unemployment and some tightening in mortgage lending since the fall
  • Combined with a rise in new listings, this coincided with the re-emergence of a buyers’ market for the first time in a decade.
  • Average home prices dipped 1% in 2008, a reversal from the 10% annual appreciation from 2002-2007
  • National average prices were down 11% year-on-year

Chorus Conclusions

  • Residential activity should moderate further in 2009 alongside a general weakening in domestic economic conditions.
  • Housing starts are forecast to fall to around 155,000 units — below longer-term replacement demand — with declines across all provinces and in both multi- and single-family segments.
  • Another 15-20% decline in the volume of resales is likely this year, with a further 10% drop in average prices.
  • Centres with the largest supply-demand imbalance, including Vancouver, Sudbury and Calgary, have relatively greater downside price risk

Royal Truculence

Some will view Warren’s outlook as brutal pessimism. For others, it is confirmation that bear-fur hats are de rigueur. Depending on perspective, this may the time to salute a bearish opportunity – which Warren implies is in full dress. Those with the financial means and job security will, compared to the aggregate market of past years, discover open doors to opportunity.

The Crowning

A reality of our world dictates that advantage for one, implies suffering for another. Insensitive you say – perhaps! Pragmatism says we can’t all be kings.

* Adrianne Warren’s full report

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.

When Life Moves You - contact 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.

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