Vancouver Whimpers “Where Did Everybody Go?”

Whimpers

©YatterMatters – PNE Wheels of Steel

Hmmm? Sellers might think that the Cameron Muir, BCREA’S in house economist, is back on the kool-aid as he proclaims that a 57% drop in sales is nothing more than a whimper?

With numbers like this, sellers of Vancouver homes are more likely to think brutal, catastrophic, or something akin to the holocaust. At a 57% drop, what they see is the chance of selling their home reach the cup half empty level. While prices across the province have reached the -9% level, in the “big smoke” it is far worse. Muir himself stated an 11% decline since March of 08. Other scholars of prediction suggest the potential for a further 14% in ’09. In March of 08 the same scholar stated that “unprecedented housing market expansion will continue into 2009, as economic fundamentals and market conditions remain conducive to high sales volumes and rising prices.” The river flows and sellers today are watching the currents sweep away their personal wealth. It’s unlikely they view this as a “whimper”.

Sluggish Malaise

Quoting Muir: “Home sales were sluggish in January, reflecting an overall malaise in consumer confidence.” claiming the “large selection of homes” as the reason. Considered thought suggests that he has probably presupposed that buyers are also blithely ignoring the opportunity of a life time to jump in while the market is down.

The Reality

As heard on the street from banker types – banks are financing very few new mortgages. Instead, they are very busy packaging consolidation loans and refinancing current mortgages to lower rates.

Bravado aside, this real estate market and global financial issues has made both buyers and Vancouver home owners alert and concerned about their personal financial welfare. Both are looking at their debt loads and trying to minimize the current daily impact of their previous spending largesse. The street rumor strongly implies improbable that they would consider assuming more debt through the acquisition of a new home.

Reality Sucks

What is very real is the possibility that they may not have a job next week? According to current CUCBC circulars, “personal bankruptcies are up 42%. They are a “lagging indicator of broad measures of economic output, and further increases are likely in the coming months.” For many, this is a valid concern that Muir calls “an ever worsening economy.” From painter to candle stick maker everybody is watching to see where the economic chips fall. Within this perspective, few if any, are prepared to consider purchasing a home.

Change Afoot

Muir’s malaise suggests a vague, unfocussed, discomfort that some propose is remedied by assuming more debt with the purchase of a home. Instead, it is not a malaise at all. Rather it is a changed dynamic that is afoot where buyers and home owners are just saying no more debt! It reflects the statement that as the current “economic recession continues to deepen, small comfort can be taken from the fact that we are running up debt less quickly than before.”

It’s seems that Muir has misunderstood the new dynamic as “reports of an increasing number of consumers shopping for a home have yet to materialize in the sales statistics.” His rationale is that “The large selection of homes for sale in January likely reduced any sense of urgency for potential home buyers to commit to a purchase.” A greater possibility is that they can’t afford to buy.

It Looks Like

Counter to Muir’s lacking statistics is my visual reference exemplifying the lack of buyers. Unable to afford a ticket, the empty buyer seats full in seasons prior, now hear only the shrill whimper of Vancouver’s housing market’s winter wind!

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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: GRAPH Courtesy BCREA. While believed to be accurate it’s representation is not guaranteed.

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.

Reader Comments:

February 17th, 2009 at 9:17 am

Larry,

You are one of the only realtors stating the truth of the economy and housing market. You will be repaid with buyers down the road who are looking for someone who is honest. Too many realtors are being rosy and are negating the fact that there are tons of buyers sitting out for the next year at least. I guess if realtors didn’t have a good last few years they’re grasping at anything they can get. Wrong move in my opinion.

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