Vancouver Real Estate’s Candle

Candles Bright

On this day, Canada’s Birthday there will be many candles burning bright as we cheer our nations beauty and good fortune.

For those selling Vancouver homes their candles burn less bright as segments of Vancouver Real Estate show signs of a market melting.

Average Price 1977 – 2012

Detached

Vancouver’s real estate’s candle continued its slow melt as price drops accumulate with average detached home prices beating a retreat for the fourth consecutive month from February’s high of $1,235,244 to a current average price of $1,061,067.

Detached units reached a total Active listing count of 7,958 units and is now 27% higher than this time last year.

Detached sales also felt the cold wind of fewer sales. Down 37% (924) compared to June 2011 (1,473), this figure is bound to extinguish the flame for a few Vancouver home sellers.

Attached

With an average price of $551,083 in May 2012, Vancouver’s attached market saw June 2012 achiever a slight up-tick as it recorded an average price of $566,310.

Apartment

Some celebrations draw to a close quickly. In a complete reversal, apartment candles that burned bright last month were blown out as the average price dropped from this year’s high of $461,410 in May 2012 to a new low of $433,841.

Vancouver Real Estate Average Prices:

Detached Attached Apartment
June 12 – $1,061,067 June 12 – $566,310 June 12 – $433,841
June 11 – $1,215,265 June 11 – $554,763 June 11 – $445,981
June 10 – $970,542 June 10 – $569,037 June 10 – $428,924

Vancouver Real Estate Inventory – Active Listings

Detached Attached Apartment
June 12 – 7,958
+ 27%
June 12 – 2,761
+ 14%
June 12 – 7,774
+ 20%
June 11 – 6,253 June 11 – 2,403 June 11 – 6,450

Vancouver Real Estate – Units Sold

Detached Attached Apartment
June 12 – 924
-37%
June 12 – 415
-20%
June 12 – 1,026
-18%
June 11 – 1,473 June 11 – 525 June 11 – 1,266

*Percent = YOY

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:

vanpro Says:
July 1st, 2012 at 10:15 am

WOW! 14% plunge in SFH avg price in 120 days (-13% since June/11)!! Sales at 10 yr lows and unsold inventory continues to climb. This is now an established downtrend.

July 1st, 2012 at 1:29 pm

@vanpro

re: trend
well…… there is the HPI 🙂

vanpro Says:
July 1st, 2012 at 1:47 pm

Well the avg price decline/trend is corroborated by: (1) sales plunging to 10 yr. lows, (2) unsold inventory climbing to near 10 year high and (3) UNaffordability at all-time highs. So, if the now unreliable re-adjusted “benchmark” price continues to go against these trends, it only proves how truly unreliable the so-called “benchmark” is….

BubbleBoy Says:
July 1st, 2012 at 2:10 pm

I thought prices weren’t tanking?

July 1st, 2012 at 3:40 pm

@bubbles

Tanking – does that mean adjusting?

Anon Says:
July 1st, 2012 at 4:04 pm

Thanks for sharing so soon Larry!

Makaya Says:
July 1st, 2012 at 4:07 pm

It looks like prices in Vancouver are getting more and more balanced!

bbcoq Says:
July 1st, 2012 at 7:34 pm

Tanking? Trending lower is more accurate. Markets go up, down and sideways. Has this not been anticpated for months or years?

McLovin Says:
July 1st, 2012 at 8:44 pm

Adjusting?

Does that mean a 50% drop from all time highs when its all said and done?

You could be retired with all due respect.

July 1st, 2012 at 10:11 pm

@mclovin
50%
Realtors never retire they just fade away.:)
But, just for fun I’ll be sticking around to see what happens.

July 1st, 2012 at 10:12 pm

@makaya

LOL! Ain’t it the truth!

July 1st, 2012 at 10:14 pm

@bbcoq

“Has this not been anticpated”

Of course but let’s not spill the beans. We can act like it is a surprise. 🙂

July 1st, 2012 at 11:05 pm

Let’s all be patient and see what the upcoming June REBGV commentary says about the market. Probably would be something like:

“Market appears to be about “balanced” given the seasonal slowdown as buyers go on summer vacation. And some expert will be quoted that “the market should pick up as buyers fully understand the recent mortgage changes which have created some hesitation in the market recently.”

No worries at all, things will be fine. Real Estate always goes up, right?

Not! This time, it’s not different. The locals can’t stretch their dolllars anymore and the foreign buyers ain’t coming! And then there is all that household debt that needs to be paid off.

Adam Says:
July 1st, 2012 at 11:41 pm

Hi Larry. Thank you very much for posting the stats so early on this fine Canada Day long weekend. I wanted to share the following with your viewers.

As you noted, this is the 4th straight monthly decline in a row. The last time we saw 3 straight declines in a row was in 2008… however… I had to go back a LOT further to see when we had 4 straight declines in a row. After going way back, guess what I found? The last time we had 4 straight red months in a row was Aug 1996! Almost 16 years ago. So we are currently in the worst downtrend since 1996. Here is what I found:

JUL/96 – $426,400 (PEAK OF 1988-1996 boom)
AUG/96 – $397,800
SEP/96 – $393,100
OCT/96 – $365,800
NOV/96 – $354,900 (4th straight red month in a row)
DEC/96 – $347,000

As you will notice, back then, we dropped 16.7% in 4 months. Currently, we have dropped 14.1% in 4 months. So quite similar. The only difference is, our current bubble has begun much sooner. The 1996 bubble went on for a 5th monthly decline, but then was sort of “saved”, with prices going up in January 1997. However, our 5th month in a row (if we drop again) will be July, which will mean we will be right smack dab in the middle of the horrible summer months. This leads me to believe that we could see very rough waters until at least January when we may see some stabilization.

What is everyone elses thoughts on this interesting data? Either way it doesn’t look good at all… I was shocked to see that the last time we saw a drop like this was Aug 1996.

Anon Says:
July 2nd, 2012 at 7:37 am

@bbcoq. It depends on who you were asking. Honestly from almost every single realtor (all of which I would never work with because I can’t believe they actually thought that) and many intelligent family members and friends – all I have heard for a number of years is that RE will always go up. Lol. It’s like a disease in Vancouver to believe that.

Of course, all markets will adjust, I suppose the question is with this one – by how much? The SFH market should keep correcting after July 9 as well. I’m thinking we will see an overall price drop of at least 20% by the end of the year and that downward trend will continue into next year. That’s of course assuming there are no (other) economic shocks that make it worse. Lots of things could happen between now and then. Should be interesting to watch.

July 2nd, 2012 at 8:46 am

@adam

Not 100% certain about this but I think mortgage interest rates were at 19.5% or greater at that time. Someone with a rate table might be able to confirm.

Boombust Says:
July 2nd, 2012 at 9:25 am

Let the spin begin!

Thanks for the stats, Larry!

July 2nd, 2012 at 9:44 am

@boom
Always welcome….

‘Let the spin begin”

Nicely worded but to be fair – Spinners exist on both sides of the wheel.
Using the favorite word of the day you might say it is well ‘balanced’! 🙂

anon Says:
July 2nd, 2012 at 11:35 am

Actually Larry in 1996 interest rates ranged from a high of 5.9 (early in the year) to a low of 3% (by year end). 1991 was the year of 16% interest rates.

vanpro Says:
July 2nd, 2012 at 3:08 pm

Larry: regardless of mortgage rates, UNaffordability (due to wildly high prices today even at record low rates) is WAY worse today than in 1996: close to 90% of household income for SFH today vs. 55% in 1996 – see historical affordability graph fro Vancouver on top right of page 5 of RBC’s report:

http://www.rbc.com/economics/market/pdf/house.pdf

Adam Says:
July 2nd, 2012 at 3:39 pm

@adam

Not 100% certain about this but I think mortgage interest rates were at 19.5% or greater at that time. Someone with a rate table might be able to confirm.

Larry, if that is the case it would make it even worse for us right now. E.g., last time we had 4 reds in a row we had 19.5% interest rates, versus our current 5% bank interest rates. That being said, however, in 1996 mortgage rates were very low. Actually, inflation had brought them close to what they are now (inflation was low in 1996). I believe you are thinking of 1979/1980, which was the first Vancouver bubble, and mortgage rates were around 20% then.

Vangrl Says:
July 2nd, 2012 at 4:07 pm

Thanks for the prompt stats Larry!

@adam… That surprises me that we have to go back that far to see 4 months of declines in a row, I thought that would be much more common, can you imagine if our rates start to rise soon?

withheld Says:
July 2nd, 2012 at 5:57 pm

If you chart the Vancouver average price against the HPI, Teranet or Median price measures, you’ll see a significant divergence in 2010 as high-priced sales skewed the average. Much of the adjustment that is now occurring is a normalization of the distribution of sales. I wouldn’t conclude that prices are falling until the HPI and Teranet turn negative.

http://www.bcrea.bc.ca/sf-images/economics/index.gif

Also, for those skeptical of the HPI, it has a 90%+ correlation with Teranet.

July 2nd, 2012 at 7:35 pm

@larry

“Detached sales also felt the cold wind of fewer sales. Down 37% (924) compared to June 2011 (1,473), this figure is bound to extinguish the flame for a few Vancouver home sellers.”

Not to mention that the flame of rookie Realtors who have those “overpriced” listings. With nothing selling, inventory ballooning and those advertising costs and “desk fees” mounting, I would expect some of them to be looking for additional income opportunities.

The industry is going to have to downsize to the new reality. The sad part is that the “downturn in prices” could be as long as the relentless uptrend since 2000.

Here hoping, it doesn’t turn out to be a “lost decade”.

July 2nd, 2012 at 7:50 pm

@lookout

kind of you to express your concern-

quoting a fellow practitioner – “everyone is entitled to go broke selling real estate”.

From a self serving perspective this reinforces the importance of dealing with a well seasoned Realtor when selling – we know stuff!

Yellow Helicopter Says:
July 2nd, 2012 at 9:46 pm

@Adam – fascinating stats, so surprised (shocked really,) to hear that the last time there was 4 months of declines was 16 (!) years ago.

Larry, thanks for the stats. Whether it’s this Fall or next year, we’ll look to you for help when we do decide to buy.

Yellow Helicopter Says:
July 2nd, 2012 at 9:49 pm

Ps- @BubbleBoy, surely you could express your sentiments with a little more grace and maturity? It’s okay to be frustrated with the Vancouver housing market, but reading your posts is like drinking bitterness.

olga62 Says:
July 3rd, 2012 at 3:25 am

The smart and forward looking RE agents would have to try to influence the board to find their ways to adjust the numbers so the high-priced sales from 2010 would not skew the average and the sellers would not get the wrong impression (there might be a conflict of interest if the board members are heavily invested in RE market). Market will correct it anyways though just a little bit later. IMHO any realtor would prefer to have the active market instead of the stagnant one. There is nothing left to squize from the buyer, start to apply the pressure on the seller.

BubbleBoy Says:
July 3rd, 2012 at 8:12 am

@Yellow Heli,

I’m not frustrated at all. I sold last fall and I am now a spectator of the big show. And a 13% decline in 1 year is not catching your attention? When prices were moving up at that pace, people were getting excited. Well, the market has turned.

I understand your bitterness. Your home is depreciating and you’re upset. If you want to feel better, read Bob Rennie’s latest comments. It will cheer u up!

July 3rd, 2012 at 8:16 am

@olga

“smart and forward looking RE agents would have to try to influence the board to find their ways to adjust the numbers ”

Really! That is the most preposterous statement I have read to date!

Yellow Helicopter Says:
July 3rd, 2012 at 12:43 pm

@bubbleboy – You write like a 12 year old. And you apparently don’t read very well either. Both Larry’s stats / posts and my comments, where I clearly state that I will eventually be looking to buy. I don’t own. I rent and save the difference.
Anyway, I’ve always known you can’t reason with crazy, so I’m sure you’ll understand if I just ignore you and your ‘insightful commentary’ (ha!) from now on.

AG Says:
July 3rd, 2012 at 3:00 pm

The best realtors in California did well by adjusting to changing conditions. For example when short sales and courthouse sales became the rage, they worked to educate buyers and lined up bridge financing for people who couldn’t bring all cash to their offer. It’s all about making the deal work, but what that takes is going to be changing in unexpected ways. The sharpest will find opportunities.

As to the REBGV, I wish they’d report an overall median. Just crazy that they don’t. Now that the average is punishing them so badly, I hope they regret their decision on that.

AG Says:
July 3rd, 2012 at 3:03 pm

withheld, that correlation, that was before or after they revised all the old HPI data a second time?

Olga62 Says:
July 4th, 2012 at 1:21 am

Larry – I did not mean that they would need to manipulate the data on the bear’s side by adjusting the numbers – the right index would have to be build in a way to prevent the sharp/localized deviations not to skew the graphs. It depends on the goal of the undex – if it is created to reflect the general tendency and to give a correct feed back to the seller and perspective customer, they need to build in the protection. Although it is not really needed in a mass driven processes – the stats will flatten that peak eventually but it will be worse for the RE industry itself as the sales will have to be fairly low for awhile partially as a result of the incorrect feedback these indexes provide to a perspective seller. As I said before, I do not see any particular reason for the FIRE industries to try to keep the prices artificially high – it only going to keep the market stagnant and to prevent its correction and return back to its active state. It is better for everyone to have more sales at the lower price point than no sales at the higher one.

Withheld Says:
July 4th, 2012 at 9:32 am

The HPI Benchmark price was revised so that its percent change agreed with the HPI index number. Regardless, the correlation didn’t change.

Makaya Says:
July 4th, 2012 at 10:03 am

““Today, our sales-to-active-listings ratio sits at 13%, 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%,” Mr. Klein said.”

The lower end of the balanced market keeps getting lower!

July 4th, 2012 at 1:06 pm

You know Larry, an experienced Realtor like you should not be associated with an organization like the REBGV. I know, I know you don’t really have a choice, since it’s members only and there os only one Club.

Having said that, the monthly “spin” on the sales numbers is really getting to a level that I would define as frankly pathetic and somewhat insulting to the average potential buyer out there, like me.

I mean you spin information to your own advantage, the politicians do it all the time. The resignation by Bev Oda, will I am sure be spun by the Government (sorry I meant the HARPER Government, gotta spin) it right. OK we are used to that.

But for the Board to come out and say the market is at the lower end of Balanced is almost blasphemy.
Sorry to bring God into this. I mean, why doesn’t anyone reasonably prominent ever take these clowns to task…….

BubbleBoy Says:
July 4th, 2012 at 1:30 pm

Larry,

I don’t see the average price in the stats release for June. See what I mean?

Adam Says:
July 4th, 2012 at 1:32 pm

West Vancouver (Down 65%)
Jun/12 = 47 sales
Jun/11 = 134 sales

Port Moody (Down 65%)
Jun/12 = 11 sales
Jun/11 = 31 sales

Richmond (Down 52%)
Jun/12 = 76 sales
Jun/11 = 158 sales

Vancouver-West (Down 52%)
Jun/12 = 102 sales
Jun/11 = 213 sales

North Vancouver (Down 52%)
Jun/12 = 73 sales
JUn/11 = 153 sales

Vancouver-East (Down 41%)
Jun/12 = 107 sales
Jun/11 = 180 sales

Coquitlam (Down 31%)
Jun/12 = 101 sales
Jun/11 = 147 sales

Burnaby (Down 31%)
Jun/12 = 83 sales
Jun/11 = 120 sales

July 4th, 2012 at 5:29 pm

@lookoutbelow

“You know Larry, an experienced Realtor like you should not be associated with an organization like the REBGV”

Plan B would be what?

Re: Balance –

as defined by REBGV parameters which I assume are standard models (remember nobody down there invented the wheel) it is as they say.

July 4th, 2012 at 5:30 pm

@bubbles
I think we went over this before. I gave you the average and it is included in the press releases.

July 4th, 2012 at 5:35 pm

@adam

From this we go where? Oh right! The market has changed.

BTW readers will want you to verify the source of these numbers. If you are not careful you might be considered out of ‘balance’ 🙂

Stew Says:
July 6th, 2012 at 10:07 am

I laugh when I hear the sheeple state that prices are “ADJUSTING”. Thats like saying my stock that just crashed is adjusting. 27 years as a realtor, I can safely say the end has come. We are going DOWN.

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