Vancouver Real Estate Dazed and Confused
Posted May 21st, 2009 in Real Estate, Sharing the Experience | 
Is Everybody Confused?
CMHC first paragraph in their Q2-09 report says: – “Demand for both new and resale housing has waned in the face of economic uncertainty and job losses. An ample supply of homes for sale, coupled with softer demand, will keep home prices trending lower.”
Really! If CMHC is right, then explain why a quick phone and coffee survey of local West and East side Vancouver Realtors indicate an explosion of multiple offers and sale prices above asking – in some cases by almost 20%. Explain open house traffic jams where in one case, over 200 buyers passed through the doors of an East side Vancouver home in 6 hours. The result, 11 offers with a non subject sale price $126,000 over ask. Isolated? Maybe! Confused possibly. Call it what you like, but those numbers in no way support the CMHC’s notions of a ‘waning’, ‘soft demand’ or ‘lower trend in prices’.
On the issue of housing affordability in Vancouver CMHC was right. That apparent affordability spawned by incredibly low mortgage interest rates has got a lot of buyers off the fence. Conjecture it may be, however, within the single example noted above is a reflection of many others. The housing prices on the east and west side microcosim have climbed. At the current rate, it won’t take long for affordable to change to un-affordable therein mooting CMHC’s local projection.
CREA Revised
With noted interest, on May 14/09, the Canadian Real Estate Association(CREA), revised their forecast. It would seem that B.C. has become the national real estate dog wagging the tail as ‘activity’ is ‘stronger than expected’. Curious it remains, that they still project that average home prices will decrease by 5.2 percent with the B.C. dog leading the pack.
Landcor’s Grizzly
Rudy Neilsen of Landcor Data probably says it best. Unsure of the what kind of real estate quicksand Vancouver is experiencing, he cautiously notes “that the light at the end of the Vancouver Real estate tunnel could be something akin to “a Grizzly bear with a flashlight”. Focusing, his report notes that “Vancouver accounted for 48.1% of B.C.’s total residential sales.” This takes into account the significant drop in volume from Q4-08. With these numbers you may be scratching your head wondering if the rest of B.C. real estate has burned to the ground?
Who is right?
It’s a tough question to answer. Being confused about the global-ness of the real estate market is problematic. For most people, real estate is a local affair. That Newfoundland is experiencing a boom, has little effect on places like the Okanagan, the west side or the east side. When and if we go for off shore oil drilling that dynamic will change too. We’ll have to wait. For now, looking at the big picture, might make you put your head in the sand. Conversely, in this moment, from a ‘realtor on the street’ perspective, Vancouver’s Lotus Blossom seems to be in full bloom.
* Disclaimer: All statistical reference and quotations from noted Documents herein supplied or linked. While believed to be accurate they are not guaranteed.
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Canada Mortgage and Housing Q2-09 Report
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Canadian Real Estate Association Q2-09 Report
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Landcor Report
