Stats Don’t Lie – In Vancouver It’s a 10 Year Low

10 Year Low

Stats don’t lie and the official Real Estate Board of Greater Vancouver (REBGV) report says that residential property sales hit a 10-year low in June and yet prices, remained relatively stable.

With this knowledge the obvious question arises. Will all eyes now turn in anticipation that those ‘relatively stable’ prices will be the next chink in Vancouver real estate’s armor.

On a Positive Note

According to the President of the REBGV, “Overall conditions have trended in favour of buyers in our marketplace in recent months. This means buyers are facing less competition and have more selection to choose from compared to earlier in the year.”

“Today, our sales-to-active-listings ratio sits at 13 per cent, which puts us in the lower end of a balanced market. This ratio has been declining in our market since March when it was 19 per cent.”

June’s Numbers

  • New listings for detached, attached and apartment properties in Greater Vancouver totalled 5,617 in June 2012. This represents a 3 per cent decline compared to June 2011.
  • The total number of residential property listings on the MLS® increased 22 per cent from this time last year to 18,493.
  • The MLSLink® Housing Price Index (HPI) composite benchmark price for all residential properties in Greater Vancouver over the last 12 months has increased 1.7% and declined 0.7% compared to last month.
  • 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 June 2012 reached 921, a decline of 37.4 per cent.
  • Detached Benchmark price increased 3.3 per cent from June 2011 to $961,600 down from May’s YOY of $967,500

Apartment

  • Apartment sales reached 1,026 in June 2012, a decline of 18.4 per cent.
  • Apartment Benchmark price increased .3 per cent from June 2011 to $376,200, down from May YOY of $379,700 .

Townhome

  • Townhome sales in May 2012 totalled 415, a decline of 21.0 per cent
  • Townhome Benchmark price decreased 0.1 per cent from June 2011 $468,400, down from May YOY of $470,000.

Abberrant Thoughts

Upon reading this report, casual observers might find cynicism knocking on their door. They may ask if these numbers are real and are they sufficient, useful and productive – in short, do they help? Few will claim the market numbers reflect a bubble bursting as it heads for the tank. Others will say it is only a normal part of any cycle and it is adjusting. Fewer still will say everything is normal and appears to be a logical repercussion of market forces influenced by federal/provincial/civic governance and global financial issues. Suspect is that most will agree that ‘it is about time.’

Others will lay claim saying that the REBGV is somehow misleading them with anecdotes contrary to their vision of the market. Some will see REBGV as patently setting a course of deception for they have as example, left median and average prices out of the picture choosing instead to use only the HPI as the guideline.

Perhaps it is my privilege and burden as a member of REBGV/BCREA/CREA to contend with the perception of this reality for while all the numbers are there to be made available to the public, sometimes there just isn’t enough real estate on a page or manpower to tell the whole story. Instead, what is chosen to be released to the public is a synopsis of that considered by those who issue the information to be the most pertinent. To be clear – YatterMatters suffers the same issue.

In choosing to be selective REBGV/BCREA/CREA walk a knife edge. For those who understand and play with numbers all this information and more is a must have. For those less inclined, the synopsis is more than adequate.

Further Information:

* Average Prices available here

** Benchmark prices underwent a re-calculation 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

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:

Adam Says:
July 4th, 2012 at 6:41 pm

The decrease in sales is no surprise. In order for prices to drop, sales will actually have to increase. West Vancouver (the wealthiest city in the stats) had the biggest sales gap. What does that tell us? The wealthier homes have the “luxury” of pulling their homes off the market and waiting for prices to “rebound”. Of course, there is no guarantee they will rebound.

The problem this time, compared to the 2008 rebound, is that there is no government help this time and interest rates are already at all-time lows. We have no where to go from here – what will save the market? No more 40 year amortizations and lowering of interest rates. I can’t think of anything that will save this market at this point. We’ve made it worse for ourselves by letting the bubble go on this long, so the crash will be harder now.

Sell while you can, before the MOI goes above 10. Then all hell will break lose.

July 4th, 2012 at 7:06 pm

@adam
It’s a big bet that inventory will continue to rise. With all the media screaming about this market low. Assuming they can handle the interest costs on their ATM Home I suspect a great number of sellers will pull back and wait.

Painter Says:
July 4th, 2012 at 7:19 pm

I am seeing amongst my reno trade contacts, lots of painting and flooring jobs= lots people looking to list the rush to the exit is on! Vancouver RE will be down another 10% by years end. I know a RE appraiser, mortgage broker and my RE agent who all have their homes for sale, just in the last 2 weeks :=]

July 4th, 2012 at 7:33 pm

@painter
“lots people looking to list”

Tell them there are lots of buyers who visit this blog and they should list with me for the fabulous exposure. Of course those same buyers are pretty smart and know a good deal so if they over priced they shouldn’t bother.

CBM Says:
July 4th, 2012 at 8:21 pm

People are panicking, but honestly this is just a temporary pause. The only reason housing has gone somewhat soft is because there aren’t as many offshore buyers in Vancouver.

Reliable sources have told me that the Mainland Chinese community is just taking a brief break from real estate because they’re really fatigued from buying so much and decided to pause. Also, most of the reason that sales are down is because the weather has been rotten for most of this year. And even so prices are still up per the HPI……..

You still saw bidding wars over on Cambie st…….once again mostly offshore Chinese investors.

Prices might flatline on the west side, but historically the west side of Vancouver has never dropped, it just flattens out for awhile.

Rob Says:
July 4th, 2012 at 9:26 pm

@ CBM
Your right. The rush is on. The helicopters are all over the skies!!
“The mainland Chinese community is just taking a brief break…… fatigued…” Really?
What are your sources? Global TV?
Could it be possible that there are better places to invest in Real estate than Vancouver? Are u that ignorant to think that just maybe prices got a bit over done and investors are heading for value in other parts of world?

Adam Says:
July 4th, 2012 at 9:50 pm

@ CBM

I thought your post was a joke but I can’t tell if you’re being sarcastic or serious. It sounds like you’re joking when you say “Reliable sources have told me that the Mainland Chinese community is just taking a brief break….. they’re really tatigued from buying so much and decided to pause”. If you’re being serious, do you know how ridiculous that sounds?

Chinese investors left in 1996 and didn’t come back until 2005. They don’t just take “pauses” because they are tired. It’s not like all the chinese have a 5000 person teleconference every year and agree to collectively stop buying Richmond, or pause for a bit because of fatigue.

@larry

Inventory very well could come down, if people are willing to withdraw their properties and hold on to them. This happened in 2008, when we saw listings collapse and people “waited for a better time to sell”. Of course, that better time did come… thanks to the govt stepping in, record low interest rates and 40 year amortizations. But I can’t see that happening again. Anyone who needs to sell would be wise to drop their place 5-10% and flog it out the door right now. Let’s be real here – the party is over. There’s no more money. CMHC doesn’t want to lend it to anyone anymore – they want out.

Painter Says:
July 4th, 2012 at 10:13 pm

@ CBM i know of dozens of west side sfh listings that have been reduced several times over the past 6 months and they still have not sold, if thats “never dropped” i dunno what is…. best get you a new pump

July 4th, 2012 at 10:36 pm

@Adam

“I can’t see that happening again”

Really? Words once used to describe Christy Clarke 🙂

July 4th, 2012 at 10:40 pm

@painter

maybe all they needed was a paint job instead of a price reduction

John Smith Says:
July 4th, 2012 at 10:47 pm
Adam Says:
July 4th, 2012 at 11:59 pm

@Larry

Well, let’s face it Larry… if the Vancouver market somehow did pull a miracle out of it’s hat and rebound, and we had another magical 4 years of booming real estate, then we’d just had to deal with an even worse crash in 2016. Had we dealt with this in 2008, we may have had that “pillowly soft landing” the media keeps spewing. But Vancouver wasn’t ready to give it up, so here we are, and now it won’t be a soft landing at all. So Larry, do we really want it to happen again? How badly do we want to screw over the next generation? We had our 10 year boom – time to face the music. Every generation has to face a bubble at some point.

Olga62 Says:
July 5th, 2012 at 12:56 am

Having sold our townhouse at the peak – last summer – I am actually OK If the buyers can handle the interest costs on their ATM Homes and a great number of sellers will pull back and wait. Most of them are going to list their properties for rent – it is an advice that is given to them by their financial advisers…Means lots of properties for rent and lower prices as a result of increased competition. They will have to renovate them as well before of renting. A year ago I had a problem to find a good quality home to rent and most of them were shabby but now the ads are starting to show “completely renovated” and hardwood floor” features.
Bad news for RE industry though. It is going to be a hard task to change the seller’s expectations and I fully expect the RE board and associated media to turn bearish at some point trying to get the point across.

BubbleBoy Says:
July 5th, 2012 at 8:07 am

@CBM,

“Prices might flatline on the west side, but historically the west side of Vancouver has never dropped, it just flattens out for awhile.”

Really? Were you born in 2009? I saw upwards of 20% on the west side in the last correction.

BubbleBoy Says:
July 5th, 2012 at 8:12 am

Larry,

Take a look at these links. As I’ve benn trying to point out to you. June stats in this report doesn’t have the average and median at the bottom of the page. But the May report does. This is where most people look for stats. They don’t go to blogs or RE forums.

From the rebgv site, where is the detailed stats package link? I’ve always been given a link to access it. I copulent find it in the site itself.

Thanks,

http://www.rebgv.org/news-statistics/greater-vancouver-housing-market-favoured-buyers-june

http://www.rebgv.org/news-statistics/spring-activity-remains-balanced-greater-vancouver-housing-market-0

BubbleBoy Says:
July 5th, 2012 at 8:14 am

Spell check. I meant “couldn’t” not “copulent” in the post above.

July 5th, 2012 at 8:59 am

@bubbles

“This is where most people look for stats. They don’t go to blogs or RE forums.”

Really!

Come on! You are burning me here.

I don’t know what you are doing. I follow the link scroll down the page and oH LOOK average and median prices. 🙂

BubbleBoy Says:
July 5th, 2012 at 9:34 am

Larry,

Your link in your last comment is for may stats, which ive provided above. I’ve also provided the June stats in my comments above.

Do you see the difference?

I hope you see it now. Because many others have already noticed this.

vangrl Says:
July 5th, 2012 at 9:42 am

Larry your link is showing the May stats, Bubbleboy is pointing out that the June stats are not showing averages.

C’mon you guys, CBM is obviously being sarcastic…

Lived in Vancouver my whole life, the west side has indeed dropped before, and in fact right now it’s falling before our eyes, I’d say about 60% of the listings out there have dropped their price at least once. One house has gone from approx 1.8 million to 1.4 million.

and Adam, you’re right, the last thing any of us want is a turn around and another 4 years of rising real estate. That would be the nail in the coffin for retail and restaurants etc.. I’ve never seen so many local shops and restaurants close their doors as much as I have in the last year.There has to be about 20 shops for lease on West 4th right now, and restaurants are turning over like crazy. Everyone’s so house broke they can’t afford to eat out or shop.

July 5th, 2012 at 1:00 pm

@vangrl

“I’ve never seen so many local shops and restaurants close their doors as much as I have in the last year.There has to be about 20 shops for lease on West 4th right now, and restaurants are turning over like crazy. Everyone’s so house broke they can’t afford to eat out or shop.”

It goes beyond being “house broke”. Also consider the effect of NET zero settlements and the methodical eradication of the middle class.

July 5th, 2012 at 1:01 pm

@bubbles
my apologies.

Best I can offer up is lack of man power.

@CRC
Advertising policy precludes me from posting your comment.

anon Says:
July 5th, 2012 at 5:23 pm

@olga

re: They will have to renovate them as well before of renting. A year ago I had a problem to find a good quality home to rent and most of them were shabby but now the ads are starting to show “completely renovated” and hardwood floor” features.

^^ yes! It has been amazing to see what has been popping up for rent. SO many expensive homes for rent for way less than what they used to go for. 4K a month for a 3.5M home…I’ll never understand anyone who buys something like that for a return as measly as that (do that math – it’s insane!) Makes me wonder if they are that financially illiterate or there is something else going on that we don’t know about.

CRC Says:
July 6th, 2012 at 11:17 am

The Chinese aren’t pausing…lol

They are going where the deals are and right now that’s not Canada.

The US is closer to a bottom where it’s starting to make more sense to buy.

vanpro Says:
July 7th, 2012 at 9:14 pm

Larry: You may have carried the typo from the media who are incorrectly referring to a “10 year low” in sales. Isn’t it really a 12 year low because it is the lowest June sales since 2000 according to the REBGV report on page 1:

“June sales were the lowest total for the month in the region since 2000 …”

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