When a national forum asks for your opinion about Vancouver Real Estate it’s an honor that comes with attachments.

Jitters

Interview’s on television or in print are not the same as cobbling a post on this blog. Posting a piece here is more like talking with friends about what they plan to have for lunch or discussing the latest hockey score.

An interview with a national paper or magazine such as Macleans is on the other hand, knowing in advance that your words will reach a larger audience of strangers.

Although it’s not my first rodeo, every time I ride into an interview it gives me the jitters and my feet start to shake in my rubber boots!

Logo Courtesy of Macleans
Boot Image

In the Year of the Dragon some will say that the beast has set fire to Vancouver’s Real Estate.

Average Price 1977 – 2012

Detached

Vancouver home prices felt the heat. Rising from December 2011′s low of $1,064,249, the average Vancouver detached home price increased to $1,145,956 in January 2012.

Attached

Vancouver’s Attached properties also felt the flames as the average price increased from December’s 2011′s $511,948 to January 2012′s $552,696.

Apartment

Close but not close enough to feel the heat, Vancouver Apartments average price fell from December 2011′s $443,808 to January 2012′s $439,566.

Vancouver Real Estate Average Price Numbers:

Vancouver Real Estate Inventory – Active Listings

Vancouver Real Estate – Units Sold

*Percent = YOY

Image Credit

Have you have happily been eating ‘bubble’ fodder on your Vancouver real estate plate?

If so, then Sherry Cooper, BMO’s Capital Markets Chief economist just changed what’s being served.

Vancouver Balloons

Regardless of rising household debt, low interest rates and high Vancouver home price, Cooper’s report says that it is unlikely that a sudden correction will happen.

According to Cooper “the housing boom is more likely to cool than correct. An exceptions she claims is “pricey Vancouver”, where the number of unoccupied newly built condos is high owing to the Olympic Village construction in 2010. “But,” she states, “Montreal has more vacant condos than Vancouver and a much higher condo rental vacancy rate.”

Not to Worry

“Concerns about a “bubble” stem from a doubling in nationwide house prices and a rapid increase in household debts over the past decade. Average prices have grown more than twice as fast as family incomes since 2001. Consequently, comparing the current ratio of average resale prices and personal incomes with its long-term trend suggests a moderate degree of over valuation, though less than before the early 1990s correction.”

“The main take away is that the national housing market appears somewhat pricey, but is far removed from bubble territory.”

Then Again!

Vancouver’s ratio currently sits at 10 times higher than average household income.

The caveat is that there are three risks to BMO’s outlook:

• risk of a material correction if interest rates were to spike
• a severe recession would reduce affordability and demand
• if foreign investment stalls due to a hard-landing in Asia

Even so, Cooper tells us that “barring one of these triggers, a dramatic correction is unlikely. In our view, the national housing market is more like a balloon than a bubble.”

Sherry Cooper’s BMO Report
Financial Post View
CBC’s Perspective
Image National Geographic via Infoniac

Cameron Muir, Chief Economist at the British Columbia Real Estate Association (BCREA) rubbed his crystal ball to conjure a Vancouver Real Estate outlook in this the First Quarter Housing Forecast.

Highlights

• Modest economic growth at home and abroad is expected to limit growth in consumer demand both this year and in 2013
• BC’s MLS® residential sales are forecast to increase 2.1 per cent from 76,817 units in 2011 to 78,400 units this year increasing a further 2.7 per cent to 80,500 units in 2013.
• 15-year average is 79,000 unit sales
• Record was 106,310 MLS® residential sales in 2005
• European sovereign debt concerns and a sluggish US economy will continue to impact consumer confidence
• Demand in the bond market may keep mortgage interest rates at or near record lows for most of 2012
• Home prices in most BC markets are forecast to experience little change over the next 24 months
• Average MLS® residential price in the province is forecast to edge down 2.2 per cent to $548,500 this year
• Expect market to remain relatively unchanged in 2013, albeit increasing 0.8 per cent to $553,000.

Information Copyright BCREA Reprinted with permission.
Full Report Here

Two of Vancouver’s divine numbers are those recorded as sales and active listings.

Bad Numbers

In 2011 Vancouver and lower mainland Active Listings hit bottom at 13,965 on January 5th. It went up as high as 25,248 on October 1, 2011.

In 2012 Vancouver and the lower mainland’s active listings hit bottom at 15,444 on January 4th – which according to my limited knowledge of Feng Shui are considered bad numbers.

Bottoms Up

By January 25, 2012 Vancouver and the lower mainland’s active listing count was 18,976. With 2012′s active listing count jump starting at 15,444, it seems within the realm of possibility that a new higher level of active listings for 2012 is in the works – one that may supersede 2011.

Fire Breathing Thought

It is the Year of the Dragon, a creature which according to Chinese tradition, is regarded as a divine beast.

Reflecting in tandem upon the current lag in Vancouver home sales and the quickly rising number of active listings it makes one wonder if in a short time new to market Vancouver homes – part of the total active listings number, will no longer be regarded as divine, but rather a ‘beast of burden.’

Image Credit

A coffee conversation today with my Vancouver Realtor® buddy had an interesting twist.

Sunday Offer

It was Sunday in the early evening when the call was made to the listing agent.

• Buyer’s Realtor® – “We’d like to make an offer!”
• Seller’s Realtor® – “Ok that’s great but, I need to tell you that three others who visited the weekend open house have also declared their intent to make an offer as well,” said the listing agent.
• “Oh – well then, I will inform the buyers I’m representing to advise them that you expect multiple offers – I’ll get back to you with their decision.”

Later Sunday Evening

Buyer’s Realtor® – “The buyers I’m representing have decided that they do not want to participate in a multiple offer situation.” “Thanks for your time and good luck with your multiples.”

Monday Morning

• Seller’s Realtor® phones. “Would your buyer’s reconsider their decision?”
• Buyer’s Realtor® – “Why?”
• Seller’s Realtor® somewhat embarrassed – “the other three offers that were declared Sunday evening have decided not to go forward.”

Retreating Thoughts

Under the assumption that the recent lack of Vancouver home sales need a reason then here is one that might fit. If in fact this is the reason, then we are left to ask if this is a new Vancouver home buying reality or worse, a portent?

Without numbered conclusions, only suspicion remains that a number of Vancouver home buyer’s may initially be jumping at record low interest rates that excite the prospect of owning a Vancouver home. Then, with quiet reflection, they recognize the financial impact to their life style for years to come. As silent deliberations root buyers exorcise the simplest way out of their dilemma – they retreat to leave sellers gasping.

Is small beautiful?

With the passing of time density is becoming entrenched in Vancouver real estate. This report reveals the next level in maximizing livability when multiplied five times on a 33 foot Vancouver property.

CBC Report

Our good friend Cameron Muir, Chief Economist at the British Columbia Real Estate Association has this to say about the latest Bank of Canada Interest Rate Decision’s possible impact on Vancouver real estate.

On Hold Highlights

• Bank of Canada opted to hold its target overnight rate at 1 per cent.
• global economic outlook is deteriorating, largely due to an expected deep and prolonged recession in Europe
• the Bank expects the Euro-crisis to be contained
• will impact the Canadian economy this year
• Bank is forecasting GDP growth of just 2 per cent in 2012
• the Bank anticipates that both total and core inflation will moderate this year before rising to 2 per cent by the third quarter of 2013.

BCREA Outlook

• the economy is largely in-line with the Bank of Canada -indeed our forecast for economic growth is almost identical
• Canadian economy is likely to face a number of head winds in 2012, both externally from the Euro-debt saga and an uncertain US economy, and internally as traditional sources of growth begin to fade
• it is difficult to see where economic growth will come from in 2012

Expected

• Canadian consumption slows
• Governments begin to address fiscal gaps
• Residential construction moderates
• leaves private business investment to drive the economy however,..
• murky demand outlook, it is far from certain that businesses will be in the mood to take on significant new projects

Upside to Downside

• unlikely that the Bank of Canada will move on interest rates in 2012
• long-term rates will remain at historically low levels until confidence is restored in the sovereign debt of Europe

Courtesy the British Columbia Real Estate Association
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
Image Courtesy Bank of Canada

As a Vancouver Realtor there are definable moments where you learn something new.

The latest experience happened during a conversation with new real estate friends who told me about their methodology of searching for that perfectly affordable Vancouver home.

For the Love of House Hunting

During a recent evening visit with a young professional couple the inevitable questions are asked.

Me: – “Have you been looking a long time for your new Vancouver home?”

New Real Estate Friends: – “Yes, we think it has been about two years since we first began.”

Me: – “Have your found online home search tools such as Realtor.ca or ‘Find Your Home” on my blog at YatterMatters useful?”

New Real Estate Friends: – With hesitance, “yes, we have used Realtor.ca in the past but we found it cumbersome. Some friends told us about ‘Find Your Home’ on YatterMatters. It’s a lot easier to use.”

*Blushing!*

Me:- “I’m surprised that during the past two years of searching online you have not discovered a home that you would consider buying?”

New Real Estate Friends: – “well we have yes but,… we find the pictures are quite different from the real thing and we were often disappointed. So we decided that the online method seemed a waste of time and decided that we needed to change our approach.”

Me: – “The pundits say that around 90% of home searches start on-line. Are they wrong? What are you doing that’s different.

New Real Estate Friends: – “We only go to open houses. We think of the time we spend visiting Vancouver open houses on the weekend as a cheap date!”

A new national home price index will launch in February. This index will replace the MLS®Link Housing Price Index, which has been used by Greater Vancouver and Fraser Valley REALTORS® since the mid 1990s.

Old

• The current HPI – launched in 1995 in Fraser Valley and 1996 in Greater Vancouver – provided the most accurate indication of housing price trends in our market, but was not usable outside of the Lower Mainland because no other market has comparable data.

New

• The new index was developed by five of Canada’s largest real estate boards – Greater Vancouver, Fraser Valley, Calgary, Toronto and Montreal – in partnership with the Canadian Real Estate Association and will be called the MLS® Home Price Index (MLS® HPI).
• This new tool which, similar to the previous index, will allow housing price trends to be traced over time for different areas within participating board markets and for different property types. The MLS® HPI will also allow for comparisons between local and national markets.
• MLS® HPI as a national collaboration will continue to position the industry as the most credible and reliable source of real estate data in the country.

Changes

There will be a few notable changes to the index in the Greater Vancouver market.

• The new MLS® HPI will be re-indexed to equal 100 in January 2005. The previous MLS®Link HPI was indexed to 2001. Sales prior to 2005 will not be considered in the MLS® HPI and will provide benchmark price trend data for the three main property types: detached, attached, and apartment.
• An expanded set of property categories will also be available to now include one-storey and two-storey homes. A composite category has also been created to track residential activity across all property types in different areas within the region.
• New property markets have been added to increase the scope of the HPI. Some HPI markets have also been redefined to produce more complete data.

Updating The “Benchmark” Home

An HPI measures how home prices change over time and provides benchmark prices of homes with “typical” characteristics in a given area. It takes into consideration what averages and medians do not – items such as lot size, age, number of rooms, etc. The most commonly traded set of these attributes makes up the typical or ‘benchmark’ house. Prices paid for homes with these attributes determine benchmark home prices.

Similar to the MLS®Link HPI, MLS® HPI benchmark prices will represent the price of a typical property within a given area or sub-area. The typical or benchmark home attributes for the area and sub-areas within the Board have been updated and will be reflected in the MLS® HPI.

Courtesy REBGV
Image Credit