Thursday’s Numbers

There were 295 new listings today and 178 sales, for a sell/list of 60.34%. Of the sales 24, or 13.48%, went over list. 7 of those were on the Westside. 3 were in East Van, 4 were in Richmond,  3 in North Van, 1 in Maple Ridge, 2 in Coquitlam, 2 in Burnaby, and 2 in the Fraser Valley.

Average list price of the sales was $466,794; average sales price was $458,215, a difference of $8,580, meaning the average sale went for 1.70% under list price. 15 properties went for list price. One property went for 12.5%($198,000) under list while the highest over list was 7% ($37,200) over.

There were 4 million dollar plus properties sold, with none over $2 million. Average days on market to sale was 40.

There were 85 price changes, of which 13, or 15.29%, were increases. The average original list price of price changes was $544,274; the average new price was $531,770, a difference of $12,504, meaning the average price change was -2.02%.

Inventory in my target area rose today to 10,494, while over 90s dropped slightly, to 1,745, a percentage drop to 16.63%.

There were 33 expiries today.

.69% of all active listings in my target area had their prices reduced today.  The 14 day rolling sell/list was 65.30%

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59 Comments

Filed under Daily Numbers

59 responses to “Thursday’s Numbers

  1. first_time_buyer

    Here are details of first 4 days of april in 2006/07

    2006:
    Listings: 1052
    Sales: 1030

    2007:
    Listings: 1098 (+4.4%)
    Sales: 732 (-28.9%)

  2. VHB

    FTB: Maybe it’s the weather. 😉

  3. first_time_buyer

    yep, its too hot outside. I was planning to buy a house myself, the wallet melted the moment i stepped out of my rented suite, it was so hot outside 😉 .

  4. robchipman

    March stats indicate 17% higher inventory and 11% fewer sales, with generally higher prices. April indicates even lower sales (yes, I know its only 4 days) but substantially slower listing growth as well, yoy. We also saw slower inventory growth through March.

    What are we seeing? A rush to the exits? Doesn’t look like it. A crash? Is a crash determined by volume drops or price drops? High prices taking care of high prices?

  5. e

    thanks rob,

    could you please qualify your statement “substantially slower listing growth as well, yoy”?

    i saw the first 4 days of april 2006, the listings went from around 8300->8200.
    first 4 days of april 2007, the listings went from around 10250->10500

  6. Paulb

    Rob do you not expect a correction in prices in the next 1-2 years? By correction I mean a decline in prices YOY not just a flattening.

  7. first_time_buyer

    “We also saw slower inventory growth through March. ”

    Can you support this with numbers? I am not sure about it.

  8. robchipman

    March inventory, yoy + 17%, first 4 days of April 4.4%. That’s what I’m looking at when I say “Its only 4 days, but inventory growth is slowing”. (Funny that the listing number gets picked up on, but the “even lower sales” gets a pass ;-)! Anyway, its spitballing on my part and not too much more. Prices are still rising. Taking profits is harder now than last year, but nobody’s actually losing money yet. The “neg cash flow speculators” don’t seem to be freaking out yet, and certainly are in position to book profits (we’ll talk more about that in coming weeks, trust me!) What is clear is that the doom and gloom predictions (double top, turn on a dime, mass psychology change, yadda yadda yadda) hasn’t happened yet. Can it? Sure. But it hasn’t happened yet.

    Paulb:

    I don’t “expect” a correction in the next 1-2 years, but that doesn’t mean I wouldn’t be surprised by one. We can go down the list of what’s on the horizon, but we’re essentially talking about the weather: it’s sunny right now, but we’ve all experienced rain, and we all know that winter comes back when summer’s over. Nobody with any sense wants to argue that we’ve got a new weather system, and that rain, cold and winter have been banished. Our problem is that we don’t have any clocks or calenders, and the early warning system hasn’t kicked in. So, a correction is coming, I agree. The question is “when and by how much”? I believe some fairly smart guys in the blog world predicted a reversal in 2006. They were wrong. What are they saying now that’s really different? (i.e., a trend is a trend until it stops being a trend. Go ahead, pick your trend. Is it rising inventory, falling sales, rising prices, what?).

  9. slugora

    Paulb,

    That’s quite the question to ask a realtor, just when Rob has managed to control himself by not showing his true colours for about a week and a half. At first galnce, I took it for sarcasm from “paul”.

    Anyway, you got his typical boilerplate answer. No matter how many times I read it, it’s a cowardly way to disclaim anything and everything, while still managing to chearlead the bulls.

  10. Snick

    Slugora,

    So true. I don’t think he’d ever tell us what he REALLY thinks.

  11. robchipman

    Let me make it simple for you two. I don’t know when this market will correct, and I don’t know how much the correction will be, but I know that a correction will come, and I wouldn’t be surprised if it was sooner rather than later.

    The two of you, on the other hand, don’t know how much the correction will be or when it will come, but you’re surprised that it hasn’t come already.

    The difference between us is that I recognize what I don’t (and can’t) know.

    Here’s some more boilerplate: What I really think is that you should buy anything that makes sense, and you should prepare to hold long term. That’s how you weather corrections. If you can’t find that in Vancouver, right now, perhaps you should wait. If you don’t know what makes sense, you should find out. If you do know what makes sense, then you know that what I’m saying is very simple, but very correct.

    Its amusing, Slugora, that you’d call me cowardly for admitting that I don’t know when exactly a correction is coming

    That you’d call it cheerleading when I say I don’t know when a correction is coming, but that I know one is coming, and wouldn’t be surprised if it came sooner rather than later, simply re-affirms my faith in close-minded idiocy!

  12. Moneyfromasia

    Hey Rob, Thanks for again having the patients with poster’s accuzations.

    Let me reitterate that I agree with you in holding long term if you really want to buy right now.

    MAKE SURE THOUGH that the investment is a good choice as well. Lets leave it up to the readers to define what is a good choice for them,CRITICALLY more than ever.

    BTW Rob, Nice pic of your Loins! JK

  13. craig

    You have biblical levels of patience rob, epic levels.

    I don’t think the idiot bears will be satisfied until you parrot their “approved” lines. They can’t seem to understand that one’s impressions of short term market direction and one’s opinions about long term investment value can be distinct. They also seem to be unable to process the fact that they, like most everyone, cannot predict when the “correction” will happen and by how much.

    while i admire your persistence with them, i fear it will be all for naught. to mimic their oft-cited slag of you…a man’s willingness to understand something depends on the extent to which it conflicts with his dearly held worldview.

  14. Snick

    Rob,

    Well, that’s more like it. “Sooner rather than later”?
    How soon, in your opinion? Now, 6 months, one year from now?

  15. ObserverX

    craig, please don’t paint all bears as the “idiot” variety. There are many bears who agree with Rob’s point of view and simply, as suggested by Rob, are waiting because there is no purchase out there that makes sense right now.

  16. VHB

    “What I really think is that you should buy anything that makes sense, and you should prepare to hold long term. ”

    Let me explain why I don’t like the ‘I acknowledge that a correction is coming but you should still buy and hold long term’ argument.

    Here’s what it boils down to: You assume that some people just have to buy ‘now’ and can’t wait for a future correction.

    So, put simply, the argument reduces to this: If you must buy now, then now is a good time to buy.

    Gee, thanks for that advice.

    The reality is that almost no one *needs* to buy now. If you are not patient enough to wait, then go ahead and buy.

    And no, I have never proclaimed to have a crystal ball with respect to timing. I know the market is overvalued and it will correct back toward fundamentals.

  17. machoslob

    craig,

    It seems to me that an occasional obstacle to Robs exuberance could be a lot healthier than martyr worship, but your devotion to him is touching.

    It would be a shame to tip the fragile balance of opinions by driving the few remaining bears from this blog to more tolerant audiences.

    I have found the warnings from these “idiots” (as you call them) a lot more rational and convincing than blind optimism.

  18. first_time_buyer

    ok, let me add my 2 cents for which once again I will get a boilerplate answer. Nevertheless, I will keep my flag high, come what may. I dont want to quit like others here as in my opinion quitting is going to drag some more victims into this pricing out forever war.

    As per Rob’s theory, RE in Vanc is a long term investment. I find it surprising that in his opinion a long term investor should not pay any attention to short-term even if he can see a short-term correction(I would like to use disaster, but then lets be conservative here). Its a simple math. I am saving around $1000 (being conservative again) by renting than owning and my dream home is listed for 500K. Lets say that 500K house becomes a $ 2 million(being overoptimistic as this number does not have any impact on my calculations) house in 10 years from now. If I buy that house 2 years from now and after a nominal 10% correction (conservatism rules once again). In today’s dollar value that house costed me 500K -24K – 50K = 426K. So, while I played long term, I am still ahead short term by atleast 74K.

    Maybe someone can correct my Math, if I missed anything.

  19. millionpitfall

    I would not read too much into the less listings bit. There was 22 days straight of rain, spring break, followed by Easter break shortly after.

  20. domus aurea

    Now is NOT a good time to buy, according to every measure available. What’s wrong with renting for a while? For less money than a mortgage yo can live for a year or two in prime Kits location and still save money for later, when prices will be lower ….Rob, I just don’t follow your argument, I am sorry…….

  21. Deedub

    [i]…even if he can see a short-term correction…[/i]

    I don’t recall Rob ever saying any such thing. What I do recall is Rob saying on many occassions he does not know when the next correction will come.

    It’s not your math that’s at issue. The problem with your argument is you don’t know, either, when a correction will come or what it will look like. Nor, should the correction come, have you demonstrated any ability at all to actually pick something resembling a bottom.

  22. VHB

    Domus: Let me try to explain Rob’s argument.

    His argument (as I understand it) is that since we cannot ‘time the market’ as in we don’t know the exact date and time of the correction, we are better off just not to try.

    My position is that I have much greater certainty about a correction between now and 2011 then I do betweeen now and October 2007. By 2011, there will have been a big ‘correction’ with high probability in my view. By October 2007? I don’t know.

    The position of the ‘buy now because all we care about is the long run and you can’t time markets’ crowd is that people just can’t wait around until 2011 to see what will happen. They *need* to buy.

    That is where the argument falls apart. Why buy when you can rent?

    Then they come back with ‘well, some people have kids and need to buy.’ Well then, the argument then becomes ‘if you need to buy now (because of kids or something, then now is a good time to buy.’

    That argument is circular. The key place it falls down is the assumption that one must buy within some short horizon. If one is not afraid of renting (at much cheaper costs!) forever, then there is no reason to ever buy.

  23. first_time_buyer

    “you don’t know, either, when a correction will come or what it will look like”

    I agree I cant. I am sure Rob can see everything crystal clear. Just because I can not see the ditch in front of me, so i run blindfolded. This thing can not end without causing a lot of pain to lots of people. It has never happened in history and this time is no different. Any tom, dick and harry I know is a RE expert with multiple properties bleeding negative cashflow.

    As per Rob, just buy it, its always a good time to buy. I agree I can not say when would be good time to buy, but heck, i am having a much better life at almost half the price. Rob claims that he has a crystal ball and knows for sure that RE in Vanc will ALWAYS go up “long run”, how is so sure about it either? Can he guarantee it, what if that does not happen?? Ok here is a proposal, I buy a property and let him give me a time frame and a guarantee alongwith that if I dont do fine(beat inflation deducting all my maintenance, taxes and opportunity costs) within that time frame, he would pay me the differences. If he can not agree to it, he got no business to say that it would always be a good time to buy for long term.

    Unfortunately, people like Rob and Ozzie are irresponsible cheerleaders as they got nothing to lose. Anything they say, they say with a gazillion disclaimers. What is happening with David Lereah or Alan Greenspan. Should not they be put behind bars for the mess they have created. Instead Lereah feels sorry that his mother feels sad that somebody created a blog against him. WOW!!!. You steal a bread from a Walmart store, half the city’s police runs after you. And these people who snatch breads from thousands of hungry kids go scott free, just because they wear expensive suits.

  24. craig

    For the record, I don’t think that all bears are idiots and never said so. In fact, I think that comparatively few bears are idiots. The unfortunate thing is that they choose to comment here and attack Rob personally for his opinions, rather than attacking his opinions.

    I am not “devoted” to Rob. Don’t be so condescending. I consider myself a bear and recently sold because I didn’t want my ass hanging out so far if a correction comes. The difference is that I respect rob’s right to his opinion and that his points are generally well thought out (certainly not “blind optimism”), even if I disagree with him. In particular, I respect his right to express his opinion without seemingly endless personal attacks on his honour or integrity. This, I thought, is the essence of discourse.

    For bears to complain about a lack of “tolerance” and a “fragile balance” is ludicrous. Read the past threads. Who are the people labelling others as liars, frauds and charlatans?

    News Flash (subgroup of bears that I labelled idiot bears): NOT EVERYONE AGREES WITH YOU AND THE REASONS THEY DISAGREE ARE NOT NECESSARILY BECAUSE THEY ARE IMMORAL BLOODSOOKING REALTOR-DEMONS!

    I really should have let this thread die but the mindless zeal of some bears (easily the equal of Ozzie) and the absurd mantle of victimhood that they have taken on is just too damn irritating.

  25. craig

    VHB, you are too intelligent to mischaracterize Rob’s position to the extent that you have.

    I have never understood Rob to say that people must buy within some short time horizon or that people should not rent. What I hear him saying (again and again) is that there are some people who want to buy within a relatively short time horizon. Those people (who are more numerous than you may think and include numerous friends of mine) simply don’t want to keep renting.

    Rob’s message, as I understand it, to those people that want to buy relatively soon and can afford to buy and hold is that one can find deals that work in most every market. I suppose you would have him do everything in his power to convince those people not to buy until the correction comes (and hits bottom)?

    Well, why is that Rob’s role? First off, these people are adults and are competent to make major life decisions. Why do you think Rob is competent to second-guess the premium some people are willing to pay to own in the short term?

    Also, nobody has perfect knowledge (trite but true). I “advised” many of my friends not to buy in 2004 and 2005 because they were paying too much and should wait for the impending correction. I highly doubt the correction, when it comes, will leave these people under water. All the lovely hypothetical scenarios painted about the year of the correction and the magnitude of the correction are just educated guesses, nothing more.

    If some (many) people know they want to own in their lives and can afford to buy something they want to live in, without too many sacrifices, then that is what they should do. Sure they may pay a premium to do it but that is true of many many life decisions (having kids, buying expensive cars, working at low paying jobs they love…).

  26. domus aurea

    “What I hear him saying (again and again) is that there are some people who want to buy within a relatively short time horizon. Those people (who are more numerous than you may think and include numerous friends of mine) simply don’t want to keep renting.”

    Craig,

    fair enough, we are in a democracy and people should buy if they are desperate to do so and have the means. Nobody questions that (if this is what Rob is saying – I am not quite sure but I might be wrong).

    However, this does not change the fact that if they waited a bit longer they could probably afford something larger, nicer and probably cheaper.

    If waiting is so costly though, by all means go ahead and buy. Gievn the current parameters you must be REALLY impatient to choose to do that.

  27. VHB

    Craig:

    Now you mischaracterize me. I would not stand in the way of Rob helping clients who want to buy. No problems with that. He’s doing his job.

    My point is that the Realtor ™ schtick of saying ‘you can’t time the market so you shouldn’t wait’ reduces to a circular argument of ‘if you can’t wait then now is the best time to buy.’

    That’s all.

    I never said that Rob claims that people can’t wait. I never said that Rob claims that people shouldn’t rent.

    I did say that espousing the argument that ‘you can’t time the market so you might as well buy now’ is a specious argument.

  28. Moneyfromasia

    Looks like VHB’s jondra has taken over this blog.

    VHB get back to your blog, at least post one thread a weak so that Rob stops getting a beating on his blog.

    Can we stop beating on Rob people?

  29. VHB

    My jondra can beat your jondra.

    WTF is a jondra?

  30. joy

    VHB,

    if you are not hired by REBGV then pls. start your blog again.If you don’t have enough time,We can also help you.We need to fight REBGV’s propaganda.There is no one with your knowledge and expertise in Real Estate.

    We need to analyse how prices are going up when inventory is rising and people are selling below the prices of last year.I’ve seen several houses going below last year’s price but still we hear from REBGV that prices are going up.I am sure they are manipulating information and they can’t be held liable for that.They just want to profit from this high buy/sell market …they don’t care about the people who will suffer.I’ve seen same thing happening in US as well.All the realtors kept telling prices are going up..buy buy and now they are saying ,sales are picking up thanks to prices fall.WTF? and what happens to the people who bought on their advise ?

  31. joy

    everyone,Go and checkout the prices at RED in richmond on Garden City/Westminster HWY..

    they are selling 450K(on Dec2,06) Condo for 370K now and they are not selling yet.

  32. Moneyfromasia

    Nevermind the F*Ck*nG B*ll Sh*T.

    Do you know how much comfort your blog provides for those that are priced out or think that the market is way out of wack!

    Since you shut down I have looked at actually purchasing. I can purchase but again it doesn’t make sence.

    Please get your *ss back to your blog, your followers are waiting.

  33. Jaymo

    Gimme a V….V…..Gimme an H….H….Gimme a….you know where I’m going with this. Hiatus over, re-start your blog or else…..

  34. joy

    Price manipulation is difficult to prove and it’s very difficult to prove in Canada.Govt. machinery is completely inept of doing anything here.

    Otherwise the fact is prices have gone down.And if the market is hot then would you sell at discount and only if you are lucky.

    There are many agents in vancouver who says they sold for 99% of the list price,however they already cut the rate by 5%. Sany So is one of the agent i know..She always says sold at 99% of the list price.Why did u give 1% discout then?

  35. sidelines

    First, I like Rob’s blog. All this bashing is getting old.

    However, let me add my voice to the chorus: VHB, once a week, bi-weekly, anything, but please get your blog up an running again.

    The information you provided, along with the level of discourse that usually accompnaied the posts , was very, very informative and second to none.

    It’s the kind of stuff we need now more than ever.

  36. Jaymo

    I like Rob’s blog. He puts up with a lot of abuse. He is pretty unwavering in his RE worldview, despite the attacks, and he keeps the numbers coming.

    The RE debate, however, has been lacking balance since we lost the ‘other’ voice.

  37. Mightymouse

    VHB, even once a month (post)…

    I figure you must’ve been employed… To just drop off the face of the planet like that… The more I think about it, the more I realize that it must’ve been a full time job running that blog.

    C’mon, just a once a month freebie…

  38. Geezer

    I am (and almost always have been) borderline bearish on RE. I have been reading VHB and Rob’s blog for over a year and would always read the doom, gloom and open bitterness of many of the VHB contributors first. Rob’s blog has always seemed to me to be a lot more balanced and, until recently, seemed to attract a far less emotional group of contributors who allowed me to end my reading on more realistic and less apocalyptic note.

    It is unfortunate that VHB is gone because it gave all the negative folks a good place to vent their bile and to continue to reinforce each others belief in (and apparent desire for) some sort of impending RE catastrophe that would enable them to buy in at mid-eighties prices.

    I truly am an old geezer and I have the benefit of hindsight that comes from many RE transactions spread over many years in Canada and the UK. I would like to offer my experiences for what they are worth.

    Rule number one – you cannot time markets. Sorry, I know that many people regard this as blasphemy but I am convinced of this one enduring truth.

    In my lifetime I have witnessed numerous price run-ups and numerous declines. I have bought properties when all around me were saying “Prices have gone up too much too soon over the last few years, the fundamentals are way out of line, it’s a bubble about to burst, etc., etc. Fortunately for me they were usually (but not always) wrong.

    When my wife and I bought our first house it cost about $8,000 and our renter friends told us we were crazy to take on such a huge debt – “you’ll never pay it off in your lifetime”. Of course this made some sense at the time because had a combined income of less than $80 per week. We entered this “crazily overpriced” market with a great sense of trepidation but we wanted to own and we really wanted this particular house.

    Two years later it had gone up about 25% in value and we traded up to a $16,000 house in the certain knowledge that prices would continue going up forever. That property sold 2 years later for exactly what we paid for it so after costs we lost money.

    When we bought our first place in Vancouver we paid $52,000 for a brand new two-bedroom suite (1000+ sq.ft) in the West End. Once again we were counselled that the prices were crazy and would soon fall substantially but we bought because we loved the place, we anticipated living there a long time and would ride out any correction. Our financial situation changed and rather than reduce our lifestyle we sold it several years later for $55,000. Once again we lost because of selling and moving costs but we did enjoy living there.

    It was five years before we re-entered the market and during that time prices almost doubled. Being out of the market had cost us dearly and during that time, as we watched prices rising we felt all the bitterness and frustration that is so commonly seen in the bear blogs.

    We bought our most recent home 20 years ago and have witnessed it value skyrocket, collapse and skyrocket again. We are now mortgage free and the place is worth almost three times our original “ridiculously high” purchase price. These gyrations generally seemed to be connected to the economy and interest rates but not as directly as I would have expected.

    Here are some of the things I have learned to believe in.

    Prices can and do move in both directions, sometimes wildly.

    Whatever the market has been doing lately there will always be lots of people (mostly renters) who will warn that a huge correction is due – just look at the blog archives over the last few years.

    For my entire life the long-term trend of RE prices has been up. (Or is it just the value of money that has been falling?)

    For most of my life I have heard that RE is currently “hugely overpriced”.

    Location has a disproportionate effect on value.

    Brand new properties carry a “because it’s new” premium just like cars. The premiums often represent very poor value when compared with older properties and remember, when you move into it it’s no longer “new”.

    Market timing does not work.

    Being out of the market can be very costly.

    Renting can be as good or better than owning but only if you are one of the very few people who have the self discipline to put the monthly cost savings into “good” alternative investments. For most ordinary working people paying a mortgage is probably the most dependable route to ending up with substantial assets.

    Creative financing is not a good idea. It does not make housing more affordable it merely forces prices even higher and can cause real problems for the buyers who use it.

    Where is our current market heading? I don’t know and neither does anybody else. We can all say with some certainty that it will turn down at some point but this may or may not translate into a significant price drop. It may just plateau for a few years or it may reach it’s peak and then experience tiny YOY gains for a while. One thing we can probably state with confidence is that todays prices will almost certainly look quite cheap in 10 years from now.

    And now an observation about some bear contributors.

    I have experienced being on the outside (of the RE market) looking in and, when prices seem high, it’s a very unpleasant and unsettling feeling, particularly when there is upward pressure on rents, so it’s not too surprising that some of the more bearish views reflect such anguish. I think all views are important to consider but the personal slagging is unfortunate and may reveal an underlying sense of anger and despair. Being a bear is a valid position in todays market but personal attacks detract greatly from the writers credibility.

    In closing I will say that Vancouver is an extraordinary place which I believe has a bright future. I have lived on three continents and travelled extensively – this is where I have chosen to live out the rest of my life. I anticipate that as time goes by many more people will discover this beautiful city.

  39. blueskies

    VHB has to blog or be despised out forever

  40. onthefence

    Geezer***Thanks for your post. I found it to be insightful & informative. Too regularly the Bull & Bear arguments become personal attacks. Most often than not people are just trying to validate their beliefs & lifestyle.

    Investing in RE, like any other investment requires educating thy self on that particular niche investment of choice. Beyond that, it takes patients & restraint to endure changing markets.

    My main observation of most Bears, is they come off as armchair quarterbacks. Seemingly all the wisdom in the World, but one has to ask, if you are so smart why are you on the side lines?

  41. VHB

    Geezer: Thanks for your post.

    On market timing: It depends what you mean. I agree that it is *very* hard to call the top or the bottom in advance. I would hesitate before even guessing where things would be 3 months or 6 months or 9 months from now.

    However, over a longer term horizon, I’m very happy to predict that prices will return to normal relationships with incomes and rents. If you want to call that timing the market, that’s fine.

    If I had thought I could time the market, I would have been out there flipping condos with everyone else. I don’t think I can time the market, so I sit out. Value investing.

  42. craig

    Geezer, thank you. Your observations have the insight and perspective of someone who has managed to convert years lived into lived wisdom.

    VHB – Rob, to my understanding, has never said or implied something as specious as “you can’t time the market so you might as well buy now”. His argument, again as I understand it, is that you can’t time the market so you might as well buy now IF you want to own rather than rent, IF you can afford to buy and hold without too many sacrifices and IF you can find a place you can live with. The latter argument, unlike the straw man you set up, is hard to question.

    And VHB, let me add my voice to the others, you should revive you blog, even in some limited capacity. It was a very interesting read.

  43. moneyfromasia

    Yo Geezer, Bears purchase as well.

    We aren’t waiting for eighties prices, the Bank’s recent introduction of the forty year ammortization has managed to prop up the market for the mean time.

    Give it a year of paying into a $400k mortgage. People will eventually find it demoralizing when they see in their year end statement that they only paid off $8000 from principle and their neg cash flow property has fallen 2%. 2% drop may equall $10k.

    I am waiting for 2005 prices. How left wing is that?

    By the way, are your grandchildren 30 and still living at home with Mom and Dad?

    Do you realize the affordability issue for new generations is even further out of hand.

    Example.Late Eighties 87’ish tradesmen made $20’ish per hour and houses are $130k.E.Vancouer

    Now trades get $30 and houses are $600K. E.Vancouver.

    Proportionally incomes and property are nowhere near what they used to be .

    I’ve discussed this topic with Rob before because he was in the trades as well.

    These are just some points above to consider.

    One thing that I am finding interesting right now is the number of people I know that are holding multiple properties!!!

  44. robchipman

    Snick:

    Where are you going with this? I originally say “I don’t “expect” a correction in the next 1-2 years, but that doesn’t mean I wouldn’t be surprised by one” and you take exception.

    I subsequently say that I wouldn’t be surprised by a correction sooner rather than later, and you say “Well, that’s more like it.”

    Do you not read, or do you have something up your sleeve? All I’ve done is repeat myself. I haven’t said anything different.

    VHB:

    You’re making a nice argument for me, and doing a good job of poking some holes in it, but its not my argument. I actually don’t have an “argument” per se; I’ve got an approach to buying real estate. There’s a difference.

    Machoslob:

    A healthy balance of opinions might be a good thing, but its not the reason that this blog exists. If you want a balanced debate about “the bubble”, start a blog. VHB left a vacancy. By all means, fill it. I find bubble debate boring, repetitive and not unlike religious fundamentalism.

    first time buyer:

    Again, good argument, good holes poked in it, but I don’ t think its my argument. I think you’re filling in gaps to suit your opinion. I like the part about guys in expensive suits snatching bread from thousands of hungry children.

    domus aurea:

    I don’t have an “argument”. Its an approach to investing in real estate based on some personal assumptions. There’s really no mystery.

    joy:

    You’re welcome to contact me anytime and come and take a look at the stats interface that I see. I think it would be tough for the Board to manipulate the numbers, but I’m willing to let you take a look and reach your own conclusion. Prices that are reported by the Board are linked to actual addresses that exist and that correspond with transactions filed in Land Title that both pay PPT tax on the reported sale value and also form the basis for future year’s tax assessments.

    There may be a plausible argument that the Board is manipulating the benchmark price, but the publicise average and median prices as well, and the data used to arrive at these numbers is widely accessible.

    I don’t follow your discount price complaint. Daily stats indicate sales, on average, within 1-2% of list price, no? Why is there a surprise here?

  45. vanreal

    VHB, you keep harping about fundamentals and real estate returning to fundamental relationship between rent and house price. what if it is rent that increases and not house price that decreases?

  46. ObserverX

    vanreal, if rents rise to match house prices, homeowners with big mortgages will be toast because that will mean inflation is out of control and interest rates will go through the roof. In other words, it’s highly implausible that rents would increase dramatically without a concomitant decrease in prices.

  47. oracleofvancity

    Nice to see that some more reasonable posters have come by and not just the usual sore-loser bears…

  48. Moneyfromasia

    Couldn’t resist eh.. Mudslinger!

  49. Geezer

    Hello Money from Asia,

    I don’t want to get into an ongoing debate but here are a few responses to your observations.

    “Yo Geezer, Bears purchase as well.”
    Yes I know, as stated I tend to be one and my only regret is that I was not more bullish over the years. If I had bought and held with a bit less fear and a bit more confidence I would be in a far better financial position today.

    “We aren’t waiting for eighties prices,”
    Probably most intelligent bears aren’t but some of the more extreme posters seem to suggest that nothing short of total RE meltdown is soon to arrive. You and I can probably agree that scenario is extremely unlikely.

    “I am waiting for 2005 prices. How left wing is that?”
    I’m not sure where the left wing bit came from and I don’t think your expectation is left wing but I do think it is overly optimistic.

    “By the way, are your grandchildren 30 and still living at home with Mom and Dad?”
    I’m not sure why this would concern you but the answer is no. Of course if the answer was yes it would point to more pent-up demand.

    “Do you realize the affordability issue for new generations is even further out of hand.”
    I have heard this comment for most of my life and when I was twenty something I used to say it myself so I did some quick calculations. I have determined that the relatively modest homes that we have lived in have generally varied in value over the years between 2 and 5 years joint gross income. Currently our home is probably worth around two and a half years joint gross income because we have gained seniority on our pay scales. If we were 20 years old in our line of work it would probably be 4 or 5 years and I would be just as concerned about it’s unaffordabillity as I was with my first home purchase in the late sixties. My message is that it has almost always been very, very difficult for moderate income earners to enter the market and it usually takes a few years of relative misery to reach a comfort level. In the nineties we enjoyed a protracted window of opportunity but this has now passed. This is not new, this is reality. The way we originally addressed “unaffordability” in the sixties was by buying in a less desireable area and building equity. This is still possible, most young couples in reasonably decent jobs can afford to buy a fairly nice one bedroom condo in the valley, many accept the current reality and do just that while others prefer to complain and pray for a RE collapse that would provide them with another chance but at great cost to current first time buyers who may have seized the remains of another cyclical but fast fading period of opportunity.

    I don’t mean to sound harsh with my comments and I truly wish everybody could easily afford their homes of choice but I reflect on the many things that we went without (nice cars, overseas holidays, fancy dinners, nights on the town, etc.) in order to achieve ownership in our original very modest home and I wonder why some folks appear to expect it to be so different now.

  50. Geezer

    VHB said
    “However, over a longer term horizon, I’m very happy to predict that prices will return to normal relationships with incomes and rents. If you want to call that timing the market, that’s fine.”

    No, my idea of market timing is when people think they know where the market is going in the short term. In broad terms I agree with you that incomes and rents will usually return to somewhere close to their historically normal relationships but this can take many years. The burning question now is if in this hot economy rents and incomes are too low and “normal” relationships will eventually be restored as a result of rents and incomes rising as they often have in the past. Anecdotally I am aware of some pretty astonishing rents being paid in the downtown core but that whole area has undergone a massive transformation an in my mind has increased dramatically in desireabillity.

    I must add that I don’t think 90’s prices were normal, they were depressed and we were long overdue for a significant run up.

    I expect that at some point the current price increases will slow or stop and yes, prices may even decline for a while but it is also possible that incomes and rents will do what they have been doing in Calgary and some of the Northern boom towns. That’s just my guess but just like everybody else I don’t really know.

    I think another possibility is that we may all be guilty of missing the larger picture, what if values haven’t really risen? Is it possible that it is just the value of money has been collapsing? Of course that opens up a much larger debate about Mr. Bush, printing presses and global liquidity but sadly I’m totally unqualified to go there.

  51. Jim

    Geezer: I give you credit for your observation about the sacrifices made when purchasing my first home. It was a small house in Richmond in 1983 for $44k (at the time westside bungalows started at about 100k I believe),and it needed work. I was earning $18000 per year as a new UBC grad in sales . I took no vacations away, few dinners out, etc. Richmond was the burbs in those days. I ultimately traded up to a $3 million portfolio in the Westside and on the island. Took me 30 years of “sweat equity”. That being said I had no “stats”, no internet, certainly no bloggers, to guide me. I had a lot of luck however ,and an unswerving belief in Real Estate as a safe investment. But I would not buy now because I have more information and its all pointing to a correction down.

  52. Moneyfromasia

    Oh Jim, after that comment your my hero!

    I agree as well but I think there are still a few select opportunities out there for the right buyer.

  53. Jaymo

    Soory, I just don’t buy the geezer character. His ‘bio’ just seems a little too perfect in the way that it fleshes out Rob’s philosophy all too well. Rob, is geezer your Dad?

  54. Jaymo

    Sorry, I just don’t buy the geezer character. His ‘bio’ just seems a little too perfect in the way that it fleshes out Rob’s philosophy all too well. Rob, is geezer your Dad?

  55. Jaymo

    Not to flog a dead horse, but I also don’t know any people that would qualify as elderly that would appreciate being called geezer, let alone call themselves that. Self-effacing to the extreme, or a totally BS handle by a totally fabricated persona….

  56. Geezer

    Jaymo said

    “Sorry, I just don’t buy the geezer character. His ‘bio’ just seems a little too perfect in the way that it fleshes out Rob’s philosophy all too well. Rob, is geezer your Dad?”

    Sorry to disappoint you, I have no idea about Rob’s bio, I have never read it nor have I met him. I am a transplanted Brit who has lived here for over 30 years and who has become an unapologetic Vancouver booster. That’s the only reason I may share some of Rob’s more positive views of the city and its probable future.

    For the record, I am not sure that all Canadian born folks truly appreciate just how good this entire country is and in particular, just how good this amazing city is. After all these years I still look out at the skyline and thank God for giving me the chance to come here. Surely any place that can have such a powerful effect on people is worthy of a fairly substantial premium on its RE prices?

    Have we already achieved that premium? Have we surpassed it or could there still be some more to come? I don’t know but personally I doubt if prices will continue to move up as fast as in the recent past but I also doubt that the apocalypse is upon us. My bet is somewhere in-between, then after a few years the upward cycle will start all over again.

  57. dignanmaplethorpe

    Geezer
    April 9th, 2007 at 1:35 am

    Up pretty late for an old man.

  58. Moneyfromasia

    Way to go Geezer, “Upward cycle?” It’s a market and markets have there cycles up and down. Long term, the recoveries make gains to where RE is a great investment “long term.”

    There won’t be a apocalypse, do you know why?

    Supporting factors against a crash.

    ~Recent intro of 40 year ammortization.
    ~Low rates
    ~Yes there are jobs ( they aren’t paying enough to sustian anymore rise in RE though)

    I think we all can agree there won’t be a crash as long as the rates stay where they are.

    Last thought for everybody.

    NO spike in rates no crash in market. So get over it.

    Bootom line, corrections of up to 20% are realistic.

  59. Moneyfromasia

    Oops, forgot to mention if there is 20% correction it would take us to 2005 prices.

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