Vancouver Residential Property Stats Don’t Lie

Down 15%

Stats don’t lie and the official Real Estate Board of Greater Vancouver (REBGV) report says that residential property sales declined a 15.5 per cent compared May 2011. May sales were the lowest total for the month in the region since 2001 and 21.1 per cent below the 10-year May sales average.

More Than Before

“Home sellers have outpaced buyers in recent months, however, there continues to be an overall balance between supply and demand in our marketplace,” Eugen Klein, REBGV president said. He says this is because the “sales-to-active-listing ratio sits at 16 per cent, which is indicative of balanced market conditions.”

At alternate casual observer’s perspective might question this ‘balanced’ statement when all they see is the Vancouver real estate market as a swimming pool full of listings and sales dropping faster than dead flies.

In a Nut Shell

  • New listings for detached, attached and apartment properties in Greater Vancouver totalled 6,927 in May 2012. This represents a 16.8 per cent increase compared to May 2011
  • Last month’s new listing total was 15.3 per cent above the 10-year average for a total of 17,835.
  • MLS® HPI benchmark price* for all residential properties in Greater Vancouver currently sits at $625,100, up 3.3 per cent compared to May 2011 and up 2.4 per cent over the last three months
  • The benchmark price for all residential properties in the Lower Mainland** is $558,300, which is a 3 per cent increase compared to May 2011 and a 2.3 per cent increase compared to three months ago.

Detached

  • Detached Sales in May 2012 reached 1,180, a decline of 24.8 per cent.
  • Detached Benchmark price increased 5.1 per cent from May 2011 to $967,500

Apartment

  • Apartment sales reached 1,156 in May 2012, a decline of 5.9 per cent.
  • Apartment Benchmark price increased 1.7 per cent from May 2011 to $379,700.

Townhome

  • Townhome sales in May 2012 totalled 517, a decline of 10.7 per cent
  • Townhome Benchmark price increased 0.9 per cent between May 2011 and 2012 to $470,000.

Fly In Ointment

Benchmark prices underwent a re-calculation this month in order to more accurately reflect trends measured by the MLS® Home Price Index. There were no changes to the calculation of index values.

This re-calculation involved aggregating benchmark prices using the sales weighted approach for the reference period (i.e. January 2005) and thereafter linking movements in aggregate benchmark prices to their corresponding MLS® HPI.

Full Report Here

‘Dead Flies Circus’ Photo: by Magnus Muhr via Acid Cow

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:

fish10 Says:
June 4th, 2012 at 2:03 pm

Balanced is 16%. An MOI of over 6 is usually tipping into a buyer’s market.

Hate to say it, but the REBGV would never admit to a fly in the soup (or ointment)

Not much of name... Says:
June 4th, 2012 at 2:03 pm

I know you’ve already covered this and I am not schooled in statistics, but again, what is the REBGV doing? To me the optics look bad. Re-doing the methodology that HPI is calculated in January and now this month having to re-calculate the numbers….

It could be nothing, but…

Gandalf Says:
June 4th, 2012 at 3:06 pm

How come your previous post showed Vancouver Detached prices were down 12% YOY while this report shows them up 5.1% YOY?

I’m confused?

Olga Says:
June 4th, 2012 at 3:48 pm

Probably, new MLS® HPI benchmark price makes it look better than it is…Sends a bad signal to a prospective seller – they are going to be very resistant to drop the price if the stats tell otherwise – and the market is going to have even less sales. Really – a report like that damages the FIRE industry itself, as with the prices like this the buyer is not the problem – it is almost an extinct type of people at this price point – the problem is the seller, very confused by the stats like this.

June 4th, 2012 at 4:16 pm

@gandalf
average vs HPI ???

fish10 Says:
June 4th, 2012 at 5:55 pm

Let me try that again with the missing exclamation mark so it makes sense 🙂

Balanced is 16%! An MOI of over 6 is usually tipping into a buyer’s market.

Hate to say it, but the REBGV would never admit to a fly in the soup (or ointment)

Joe q Says:
June 4th, 2012 at 5:55 pm

Gandalf, here’s a hint. They just make up whatever they want for the hpi.

Anon Says:
June 4th, 2012 at 6:32 pm

Out of curiosity, what % would NOT be considered to be balanced by the REBGV? Have they stated that? At what point are they going to change the benchmark? 2005 seems like sort of an old benchmark, thus it would make the HPI look more attractive with the current conditions….no?

June 4th, 2012 at 7:06 pm

There is tremendous value in having a manufactured “Index” because the REBGV can spin it whichever they want to especially as the average Joe Public has no clue as to its true meaning.

My guess is an increasing year over year Index presumably says that Sellers have the upper hand while a declining Index would favour the Buyers. But wait, the Index went up but Sales are DOWN, prices are DOWN and Listings are way UP. Go figure and now there is an adjustment to the very Index. Sounds very credible, HAHA.

For convenience of the readers, I have copied / pasted the REBGV’s mission statement here. Thought it was interesting:

========================================
“The Real Estate Board of Greater Vancouver is committed to providing its members with the structure and services necessary to serve the real estate needs of the community.

In the interest of our members and the public they serve, the Board promotes a high standard of professional business practices and ethics.

The Board upholds five principles intended to advance the interest of Greater Vancouver’s citizens by:

•Protecting property owners
•Ensuring economic vitality
•Providing housing opportunities
•Preserving our environment
•Building better communities

Values

•Professionalism and ethics
•Innovation
•Trust and integrity
•Quality of life
•Knowledge
•Excellence
========================================

You may notice there is nothing in their mission to “protect” the Buyers. Looks like they serve their “Members”, I presume Realtors, and they “protect property owners”, whatever that means.

There is nothing in their Mission statement to provide the public with an accurate assessment of the housing market trends or other important information that may help the Buyer make a fully informed decision.

As for the HPI, I guess that must fall under the Values category called “Innovation”. Well at least they are doing a good job on that front.

stats don't lie Says:
June 4th, 2012 at 8:10 pm

Thank Goodness for HPI.

If not for this magical number made up by the REBGV, people might think prices were down 12% YOY!

(oh…. wait)

Best place on meth Says:
June 4th, 2012 at 8:27 pm

The stats do lie.

For the SFH median to be so far apart from the new made up HPI number is a farce.

It’s clear now that the board is lying to us and they should be treated as such.

Anon Says:
June 4th, 2012 at 8:41 pm

Odd how CREA (the Canadian Real Estate Association) describes a ‘balanced’ market as a sales to listings ratio of between 40-60%.

Goodness 16% is a long way off of 40%. In fact, most other places consider 16% as an extreme buyers market – save for Vancouver. I suppose the REBGV is relying on the fact that most consumers are smoking the good stuff out West and will buy whatever they spout off.

Lookoutbelow makes an interesting observation re: the fact that the REBGV has no commentary listed in their principles re: buyer protection.

BubbleBoy Says:
June 4th, 2012 at 9:48 pm

“stats don’t lie”

Actually, they can lie. The new HPI is designed to lie. It was created by the RE board. The board wanted all the newbie RE investors and new home buyers to think they are buying into a rising market. But, the market is actually declining. This is Also known as pumping. Dirty pumping. A tactic used by the RE industry to suck the money out of these stubborn people that have no idea tha the make is about to crumble and blow up in their faces. Muir and his clown posse should really be great Vancouverites and just effing tell it as it is. Just like Larry. I like an honest salesman like you sir. When this market tanks, I’m buying. And calling Larry.

Thanks a bunch

tim Says:
June 4th, 2012 at 11:14 pm

Larry,

I just want to thank you for providing an honest opinion on real estate and explaining what the HPI index is. Unlike the realtor who constantly pushes real estate like the penny stock promoters flying his asian realtor friends over the west end and pretending they were asian investors and constantly spewing, buy now or be priced out forever.

I just want to say you are a real class act amongst the other realtors, providing honest stats and opinions.

Thank you!

Mark Says:
June 5th, 2012 at 2:13 am

Seems kind of curious that the benchmark price would increase at a time when average and median prices are falling.

While an average can be skewed by a small number of high or low outliers the median price in such a large sample should be relatively unaffected by a small number of outliers.

Does the methodology used to calculate the benchmark price make it a lagging indicator? It’s hard to understand why it would increase at a time when two of the most recognized statistical indicators are decreasing.

vanpro Says:
June 5th, 2012 at 7:06 am

The “re-calculation” and re-jigging of the “benchmark” renders it totally unreliable, by the very definition of a “benchmark”. We can no longer rely on the REBGV “benchmark” price as a result.

For example: the avg. price of SFH is now down 12% YoY – this now is the only reliable measurement of price trends (and is consistent w/ 11 yr low in sales and record high unsold inventory).

Olga Says:
June 5th, 2012 at 9:22 am

@lookoutbelow – IMHO the RE board does disservice their “Members” by providing the misleading info therefore acting against its mandate. When the stats are manipulated it is often backfired. They created the monster – a seller that has no clue what the situation on a market really is and they are going to be responsible for the market stagnation because of that. Lots of people from their own industry will loose the job because the public is not properly informed and makes wrong decisions – few last fool calls for people still buying worth nothing against properly working RE market with the normal good volume.

Mark Says:
June 5th, 2012 at 4:21 pm

I guess my concern with the benchmark is the discretionary elements in the model used to define areas, types of housing etc.

While I can appreciate the mandate of the benchmark to reflect decreases or increases in the prices of comparable properties, there are so many intangible variables that affect the price of a property. It’s difficult for me to comprehend how all the intangibles that affect the price of a property could be quantified. I generally try to avoid drawing conclusions about things I don’t understand.

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