No Surprises


The Canadian Real Estate Association (CREA) at times seems like the occupant of the shallow grave found by the RCMP’s during a grow-op bust in Maple Ridge.

Obscured by the mass of recent real estate reports, CREA’s missive quietly rests waiting to be found. As with the shallow grave in Maple Ridge, we like the RCMP, already know what to expect – it’s gruesome.

CREA’s Bubble Pins

  • home sales activity and new lsitings in Canada declined in May
  • seasonally adjusted, sales declined 9.5% from a record level the month before
  • activity declined by 70% and you guessed right if you chose Toronto, Vancouver and Ottawa as the leaders
  • actual sales activity (it what is impolitely called no sales) were down 4.3%
  • if you follow seasonal patterns May was also a bust

Political Message?

Our friend Georges Pahud, CREA’s President has a response contrary to his own facts. He says the “accompanying decline in new listings and housing starts means these changes are also affecting the supply side, which will keep the market balanced and Canadian home prices stable.”

Even I know better than to use the word ‘will’ in a prediction. No wiggle room there Georges.

Seasonally Adjusted

I’m not sure that we have real estate seasons anymore but, just in case I missed it CREA says – “The seasonally adjusted number of homes that were new listings on Canadian MLS® Systems in May 2010 declined by four per cent from the previous month. This marks the first monthly decline in new listings in eight months. New listings had been climbing sharply, rising from a four-year low last September to the second highest level ever last month.”

Klump Dump

CREA’s Chief Economist Gregory Klump claims that “supply and demand has become more balanced in a number of major markets, homebuyers now have more choice and are likely be in less of a rush to purchase than they were recently, so the amount of time it takes to sell a home is expected to rise in the coming months.”

Gosh Greg, you didn’t need to reach out from the grave with that tidbit. You could visit any open house in this city except last weeks River Green to know that.

Months of Inventory

At the risk of being redundant here’s the definition. It is the number of months of inventory is the number of months it would take to sell current inventories at the current rate of sales activity.

CREA tells us that – the actual (not seasonally adjusted) number of months of inventory stood at 5.3 months in May 2010. This is up from 4.8 months at the same time last year.

If you are into seasonal adjustments then the “months of inventory stood at 6.1 months in May, the highest level since last April.” Neither is good news for sellers.

Klump’s Bacon Saver

“The number of months of inventory may rise further in response to easing sales activity and a further rise in the number of active listings,” said Klump. “However, the number of newly listed homes will ultimately retreat in response to a more competitive sales and pricing environment in a number of local markets. The outlooks for the Canadian economy, employment, and mortgage market trends remain upbeat, so supply and demand will remain balanced on a national basis. Canada will avoid a U.S.-style home price correction.”

Bacon saver math – No sales = price drops = less profit = fewer listings = another balanced market.


As an aside, if you thought I disclaimed stuff then consider that “CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighborhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types.”

Much like these soldiers of the American civil war all we know is that they died to be left in this shallow grave. So too are CREA’s stats, they are shallow in specifics.

One Thought

Considering CREA’s aforementioned prickly proclamations draws a conclusion undisclaimed. The conclusion settles on one thought which is not ‘differentially divergent’. If CREA is right, the market is now and will continue for the next while, to continue a downward path!

The Report

Should wish to see more of what’s beneath the pile of dirt read CREA’s report with the understanding that like those Mounties at the shallow Maple Ridge grave, you probably won’t be surprised at what you find.

All quotes Courtesy CREA News June 16th 2010.

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:

Boombust Says:
June 27th, 2010 at 7:34 am

Klump can trump a dump all he likes…does he think I’m a chump?

Dan Active Says:
June 27th, 2010 at 7:46 am

“activity declined by 70%…”

For those of us not versed in real estate lingo, how does activity differ from sales?

June 27th, 2010 at 8:29 am

@dan A
– good question – I presume their interpretation of “activity” means a sale.

to me it means talking to people – buyers, sellers, lawyers, bankers, mortgage brokers, conveyancers, other realtors, designing printing and posting marketing materials to homes, door knocking, lunches with clients, holding open houses, ‘blogging’, answering phone calls, taking RE courses, writing agreements, presenting and negotiating those agreements and volunteering are a few real estate related activities. Last but not least is having a life.

nice 🙂

RavingBull Says:
June 27th, 2010 at 10:58 am

great post larry

yes, its game over

klump the chump knows full well

Roland Leung Says:
June 28th, 2010 at 12:48 am

This market somehow just puzzles me with pockets of strength that can’t be explained away easily. I am a subscriber to the PCS system having access to transaction details on the Dunbar area.

I was checking the sales in the region for the past two months, when market was supposed to be close to a buyer’s market as suggested by overall list/sales tracked in your site lower than 40%.

Here is what I found out.
Jun 16 – 1.65M over 1.58 listed for 50 lot
Jun 2 – 1.3M under 1.49 listed for 60 lot – oldtimer
Jun 2 – 1.21M over 1.19 listed for 33 lot
May 28 – 1.28M under 1.38M lised for 33 lot on 16AVE
May 25 – 1.85 over 1.79M listed for 60 lot
May 25 – 1.19 at 1.19M listed for 33 lot – oldtimer
May 18 – 1.75M over 1.69M listed for 60 lot – oldtimer
May 16 – 1.46M under 1.49M listed for 33 lot
May 17 – 2.33M under2.38M listed for 33 lot
May 14 – 1.61 over 1.59 listed for 50 lot
May 13- 1.31 under 1.35 listed or 33 lot – oldtimer

I just can’t count the above as a seller’s market. Overall the stat may show sales/list approaching buyer’s market but I am not just seeing that in the dunbar area.

Larry, you have any clue for the strength there?

June 28th, 2010 at 6:08 am

Dunbar represents one of the prime west side areas for real estate.
Unfortunately, I have more questions than answers. The variables that determine the strength you refer to are many.
As example what value can be placed on it as an area that borders one of the largest parks in the city? If I have read your numbers correctly the majority of the ‘larger’ lots shown are selling at premium. Why that is happening is interesting. What is the motivation? Is it the demographic of a larger family requiring a larger house and the associated, proximity to private schools, medical care, UBC? Is it the value in the land – future or current higher density building potential, ie:, infill housing etc. or is it just that the home was in better condition and its location within the neighbourhood?

I suggest some caution be taken – though it may be great cocktail conversation about seller vs buyer market – a 1 month period doesn’t determine a market.

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