Wednesday Numbers

There were 295 new listings today and 195 sales, for a sell/list of 66.1%.  Of the sales 33, or 16.92%, went over list.  9 of those were on the Westside. 4 were in East Van, 4 in Richmond, 2 in Port Coquitlam,   3 in North Van, 3 in Maple Ridge and 1 in Coquitlam.   There were 2 in Burnaby and 5 in the Fraser Valley.  It looks like North Van may be slowing down a tad, while Maple Ridge might be getting a bump.

Average list price of the sales was $522,593; average sales price was $516,395, a difference of $6,198, meaning the average sale went for 1.07% under list price. 19 properties went for list price. One property went for 8%($280,000) under list while the highest over list was 22% ($216,000) over.

There were 10 million dollar plus properties sold, with  two over $2 million. Average days on market to sale was 39.

There were 89 price changes, of which 18, or 20.22%, were increases. The average original list price of price changes was $531,188; the average new price was $524,737, a difference of $6,452, meaning the average price change was -1.3%.  Average days on market to price change was 60.

Inventory in my target area rose  to 10,919, while over 90s also rose to 1,828, a percentage drop to 16.74%.

0.65% of all active listings in my target area had their prices reduced today. 

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48 Comments

Filed under Daily Numbers

48 responses to “Wednesday Numbers

  1. Domus

    10,919 inventory……could today be the day we hit 11k?

  2. Skeptic

    What difference will it make ? Will the sky fall ?

  3. Jim

    Have to agree somewhat with Skeptic. 11k is only a benchmark for a few(thousand) bloggers.
    However ,inventory IS rising and is a symptom of a housing slowdown, not a predictor. Inventory is a lagging indicator of buyers’ decisions. Price declines are almost a predictor of soon to recover market (notwithsatanding Japan).
    To be really ahead of the curve, sell on the rumour,buy on the news. I expect there to be a rumour of falling prices this fall, and the Vancouver Sun to report it in about 18 months. I would buy shortly thereafter(if I was a market timer-and I am not).

  4. Paulb

    Inventory is rising and sales in the ‘hot’ spring market are falling….. If we continue in this direction prices will fall. It may take until the Nov-Dec slowdown from which we don’t recover this time. Not to mention interest rate hikes to curb inflation which is climbing

  5. tufelhund

    hi rob. any chance you keep track of the average transaction prices in your area?

  6. Domus

    Who talked about sky falling? I price crash is not the apocalypse but rather a regular occurrence which Vancouver experiences every 15 to 20 years. It’s not the end of the world and in fact might be a very good thing for those people who patiently waited for a good time to buy.

  7. robchipman

    tufelhund:

    I do have the information, but I don’t track it. I really should get more of a system to massage the raw data I have (I had an offer of help by email, but the damn laptop got stolen…:-)

    I download several hundred sales and price changes each night, sort them, add some calculations, and post the results. I’m left with daily aggregations, so I can tell you what sales price and original list price was on any given date. I could even re-sort and organize by property description or location. I just don’t do it now based on my rudimentary knowledge of Excel and time constraints.

  8. WoodenHorse

    Hey Rob,

    My offer to help you with that still stands.

  9. Organic

    I heard on the radio this morning that the property taxes are going to double. Will this have an impact?

  10. dignanmaplethorpe

    The property tax increase might double from a 4% increase to an 8% increase.

    Financially: No Impact
    Psychologically: Maybe

  11. e

    Yeah, Vancouver already has cheap ppty tax compared to other cities, so it was due for an increase anyway.

  12. robchipman

    Here’s a quick link: http://www.cbc.ca/canada/british-columbia/story/2007/04/18/bc-taxes.html

    This can’t be a surprise based on recent City news – funding cut for DERA, request for 80 cops turned down, etc. Vancouver takes money to run, lots of people like government spending and want more of it, businesses (not a big source of votes) have been taking it in the ear for years on the tax front, so the city has to do something. In the end there is only one taxpayer, so…

  13. Jim

    Hey all:
    I say we take up a collection and buy Rob a lap top. In addittion the posters there are all the lurkers, trolls,VHB, Freako etc. that consume Rob’s stats secretly. $5 each from all of us should do it. Who’s in?

  14. dignanmaplethorpe

    A collection…. He’s in Real Estate man, has been for many years. He should be loaded by now.

  15. coco

    I’m sure insurance will have most of the laptop covered.

  16. Domus

    So, who believes that today will see the first break of 11k in springtime?

    We ARE in springtime, aren’t we?

    I thought that properties should be snapped up asap in Vancouver, we live in a new paradigm where land is short and crowds are gathering at the gates, pushing to buy apartments whatever they cost…..

  17. Jim

    11k today seems likely. But It’ll take 15k to crack this market.

  18. blueskies

    So, who believes that today will see the first break of 11k in springtime?

    possibly… i’m watching east side SFH and West side condos, 9 new listings this AM usually see
    4 or 5 all day in my price target range….
    hmmmm…

  19. Anonymous

    The weather is warming up nicely, I think we may see a nice uptick in activity

  20. dignanmaplethorpe

    It’ll take 35k man!
    Yeah!!!!
    I know this, I know.

  21. Domus

    So, let me play a game: let’s say 5% appreciation per year (real) for the next 10 years…..it would work out at 163% real appreciation over 10 years.

    A miserly 500k apartment would cost 814 of today’s dollars (I am talking real, not nominal)…..hmmmmm

    How much should be the median earning in Vancouver to support a (admittedly high) 8:1 multiple of real prices on real earnings?

    Simple: 814k/8 = 102k……..Yuppee!!!!

    We are striking it rich: the median household will see its real earnings more than double within the next 10 years to over 100k! At current inflation rate (2.4%) it would mean that the median income in GVRD will be 128k nominal dollars in 2017!

    We are rich!!! Stop working and start booking those holiday tickets! The power of extrapolation will save us!

  22. Domus

    By the way, the economically reasonable multiple (price/income) would be 3. In cities like NY and London it is more like 5…..but of course Vancouver is better than that.

    If I was to use a multiple equal to 5, the real (!) median earnings should be 814k/5= 163k in today’s dollars! Or 210k in nominal terms…..in just 10 years!

    Brilliant! I love to be a housing bull! I feel rich!

  23. dignanmaplethorpe

    “The weather is warming up nicely, I think we may see a nice uptick in activity”

    It just started to rain in South Burnaby, doubt we’ll see any sales from that area tonight.

  24. Domus

    Is this some kinf of Voodoo ritual, or people actually buy homes depending on the weather?

    Southern California should be booming…..

  25. dignanmaplethorpe

    But the weather can’t get too nice, hence the summer doldrums.

  26. robchipman

    domus, where are you going? price/income?

    The only income that matters is the income the property generates.
    An old house in Burnaby costs $600,000. I don’t know what vancouver median incomes are, but a quick web search gave me a figure of about $23,000 for BC in ’03. Let me double that and round it up for Vancouver. We still get a multiplier of 12. Make median income a hun. Its still a multiplier of 6, for an old house on a building lot. According to your approach we crashed years ago.

    What’s missing? Rents will go up. Ownership can concentrate. Median income may not be a determinant. Obviously income has an impact on housing price, but those who can’t own can rent. If we can’t provide cheap rentals, then property will continue to go up in value, because rental supply will be constricted, which it chronically is in this town. (Usual riders apply – RE doesn’t go up straight line forever, the coffee is hot, don’t operate heavy machinery while sleeping, etc..)

  27. Domus

    Hey Rob,

    just a few things:

    1) Not everyone uses housing as an investment: some people use housing, well, for housing really…..

    2) If population is 100 and ownership rate is 70%, only 30% can rent…..this is called oversupply and runs rental returns down….

    3) Mutliple: yes, I can tell you that in most markets people look at price of housing versus earned income as a valuable metric. In the past century this ratio has been on average equal to a value of 3. In some big cities it has been higher, but rarely more than 4. In Vancouver right now is at around 9 !
    I appreciate your rental argument, but unless the world has changed in the past 7 years, I think something is not quite right…..
    On the other hand, if the world has changed I’d be curious to hear your argument for that. I am open-minded and ready to listen to all stories that make sense……

  28. dignanmaplethorpe

    Rob,

    If rents go up along with property prices like they have and income does not follow, we will be living in a city where EVERYBODY is spending ALL their money on housing. The problem with that is if all their extra money is going to housing costs there will be no money left for the average person to spend on anything else and the consuming we have all grown to love will all but shut down. Everyone talks about price to rent multiple but the most important thing price to income multiple. Unless there is significant upward pressure on wages in Vancouver, Home prices and rents cannot continue to go up.

    Now if we become the vacation/retirement/tourist town like many claim we are becoming, the price to income multiple wouldn’t matter as much. But from what I’m hearing, foreign buyers are not as prevalent as they used to be.

    So I think that if Rents continue to be raised every time there’s a vacancy, it will only speed up and make worse the inevitable drop in prices.

  29. dignanmaplethorpe

    And further to the retirement/vacation/tourist town argument. See Phoenix and parts of southern Florida for the resiliency of retirement cities.

  30. Noname

    Rob,

    How much of a rent increase are you expecting?

    The reason I am asking because I still do not see how rent increases will not show up in the inflation numbers.

    I know you have previously mentioned that rent is a small part of inflation but I just don’t see how a basic necessity that a person spends 30-50% of their net income is not a significant portion of inflation.

    Furthermore, with the supply that is being built today, it seems apparent that we are heading down a path of inventory buildup where the specuvestors, unable to sell at a given price, will be forced to rent out their shoeboxes while dreaming that prices would return to their peaks.

    That is what the US bagholders are doing while bleeding money.

    Noname

  31. Anonymous

    dignanmaplethorpe:
    “It’ll take 35k man!
    Yeah!!!!
    I know this, I know.”
    Wow, you’re so witty, and your sarcasm so biting.

  32. dignanmaplethorpe

    “Wow, you’re so witty, and your sarcasm so biting.”

    Thank You.

    p.s. yours isnt…..

  33. Anonymous

    dignanmaplethorpe;

    No wonder you live alone and are flat broke. Can I get fries with that?

  34. dignanmaplethorpe

    I actually live in your basement suite. And I watch you when you sleep :l

  35. Domus

    Anonymous,

    this is usually a serious place to debate ossues rather than insult participant. I wish you stopped with this nonsense.

    You are dragging the level of the conversation down. I don’t care if you are a bear or a bull, you should just stop this.

  36. Snick

    Yes! Such unbridled nincompoopism.

  37. robchipman

    domus:

    Everyone uses housing for housing, whether they’re renters, owners or investors. There may be a common mulitple of 3, but that doesn’t make it a determinant.

    If population is 100 and ownership is 70%, perhaps the owners live elsewhere (offshore, suburbs, whatever). We aren’t in a closed system. Maybe I’m not getting you, but as far as I can see ownership demand and housing demand are two different (albeit somewhat related) things.

    dignanmaplethorpe:

    “If rents go up …we will be living in a city where EVERYBODY is spending ALL their money on housing [and] there will be no money … to spend on …the consuming we have all grown to love”.

    Refer to the usual disclaimers. Don’t operate heavy machinery when you’re asleep. Rents won’t rise until 99% of us are paying 100% of our income to the remaining 1% of us. Nobody’s saying they will. I’m saying that housing cost and ownership cost are tow different things. Owners arguably subsidize renters (you’ve heard the argument). Why?

    Yes, income is important to housing costs and how far they can be pushed, but housing cost and ownership cost are not the same thing. Some pay more to own and rent out. Some pay less to rent. Which one is housing cost?

    We’re not “becoming” a tourist town. Tourism is huge here, and has been for a long time. Vacation town and tourism town are the same thing. We aren’t a retirement town, and if people say that I don’t think its supportable. (Someone coming to Kelowna from Saskatchewan doesn’t make Vancouver a retirement town).

    That said, recall the last paragraphs to the Seattle/Vancouver comparison in the recent Vancouver Magazine. Seattle has Microsoft, we have…Seattle has Boeing, we have…. You get the idea.

    Anyway, rents go up when there are two renters for every place, until one of them decides they’d rather leave town altogether or sleep in the street. If you can’t afford the rent the real question you have to ask is whether the guy competing with you for accomodation cares. He won’t care about you as long as he has money. He’ll have money as long as the economy is strong. A bad economy will bring rents down faster than high rents. High rents won’t casue a crash. If they keep being paid house values will remain strong.

    One of the problems with affordability is exactly the consumerism that you refer to. Think about this fact: when we talk affordability I propose buying a house in order to build long term wealth and the counter argument is “No, because then we couldn’t have the family trips to….Disneyland!!!”.

    I don’t know how old you are, and I don’t want to date myself (at least not too much), but lets face it – saying something isn’t affordable because we’ll have to forgo Disneyland, high speed internet Much Music pre-loaded cash cards for the kids and DVD players in the mini-van seems a tad rich. I’m not saying there aren’t poor people anymore, but still…

    noname:

    You’re bringing up two points. I don’t know how much rent contributes to inflation, but inflation is figured strangely anyway. They say we have very little of it, but we all know it costs us a lot more to get down the road this year than it did last year, and it will cost even more next year. Rent is a part, that’s for sure.

    For increases I expect 4%+, simply because 4% is allowed on existing tenancies, and in my experience we raise new tenancies by more than 4%, but that’s very unscientific.

    The amount of inventory coming on line is a different issue, but its huge and largely unknown. Its clear that you can’t turnaround without seeing new construction, whether its downtown, at King Ed and Knight, or in Whalley. Will we absorb it all? Very hard to say. It will be important.

    However, if you have a tenant in your shoebox, why does that hurt? I collect rent mnth in, month out, and my company’s been doing it since 1969. I don’t think its going out of style. The problem will be for speculators who bit off more than they could chew come downturn time; investors will be fine. What we don’t know now is the split between speculators and investors.

  38. Domus

    Rob,

    I actually think that many people lately have been buying downtown apartments and leaving them empty, just waiting for appreciation.
    This is a typical example when housing is not for housing.

    Another includes holiday homes (at least not main housing).

    I am not sure I fully understand what you mean when you say “If population is 100 and ownership is 70%, perhaps the owners live elsewhere (offshore, suburbs, whatever). We aren’t in a closed system.”

    Wherever owners live, we still remain with only 30% of the population renting. If more than half of the owners had a rental property we would already be in an oversupply situation.
    You can split it the way you want, but it is just supply and demand.

    The bottom line is the same, Rob: we are heading for a big wall and many people are trying to ignore it because they made a fortune in the past.

  39. dignanmaplethorpe

    “I don’t know how old you are, and I don’t want to date myself (at least not too much), but lets face it – saying something isn’t affordable because we’ll have to forgo Disneyland, high speed internet Much Music pre-loaded cash cards for the kids and DVD players in the mini-van seems a tad rich. I’m not saying there aren’t poor people anymore, but still…”

    I’m 28 and own.

    The argument is that if we are spending all our money on housing, we are basically doing the same thing the FED does when they raise rates, we’re decreasing our spending and forcing businesses to lay people off to cut costs.

    You say that raising rents doesn’t cause a crash but I slightly disagree. I agree that the 4% increases won’t do much but raising over 8% when there’s a vacancy cramps spending. And when there’s no spending there are no new jobs, then without job growth there is less migration and more out-migration. Less people need to live here so rents drop as does a Landlords cash flow and yes property values as well. It’s all interwoven and there can be many catalysts for the reaction. So I stand firm with my views on rent increases without wage increases.

  40. Domus

    Rob:

    I forgot to mention people flipping assignments. Is that housing for housing? Are they buying to occupy?

  41. CityZoo

    If rents and housing continue to rise people will have to forego more than just Disneyland trips. Eating out, furniture, new cars, clothing, home renos, etc.

    But then again…Vancouver in a recession due to extremely high cost of living….nah, that could never happen here. 15% to 20% of foreign property ownership, flippers, etc. nah…these people will never sell their “investment” properties that always rise in value.

    I have go pick some money off my tree.

  42. Skeptic

    Domus: “I actually think that many people lately have been buying downtown apartments and leaving them empty, just waiting for appreciation.
    This is a typical example when housing is not for housing.”

    How do you think these people will be affected if there is a downturn or a recession, not that I’m thinking there will be ? If they can afford to hold an empty property, they won’t be too bothered by any of the events that you ‘forsee’.

  43. Domus

    Well, good luck to them. they must be all millionaires because they will be holding a depreciating asset for a few years……

    If you hold on to a 500k apartment, given an inflation at 2.4% and assuming just a slow decline of 3% nominal a year, after 5 years you have lost roughly 1 quarter (25%) of the value of your asset.

    If they love RE so much, well……..

  44. Skeptic

    Domus, you’re right ….. if you use those assumptions. … Its not your math I disagree with, I just have different assumptions

  45. robchipman

    dignanmaplethorpe:

    We’re not spending all our money on housing. If we were we’d be in trouble, I agree. But we’re not. There is a lot of commerce going on, not just housing. There is a lot of demand for housing, and a lot of supply. Prices could go either way, based on that.

    You’re right that raising rent at tenant turnover cramps someone’s spending. Mind you, it gives the landlord a little more to spend. The money doesn’t disappear, and neither does the spending. I actually rent to an employee. Raised the rent, had to give her a raise too. Micro-anecdotal, I admit, but true, nonetheless (and no, I don’t make her buy things at the company store!)

    My argument is that “affordability” has so many interpretations that its largely meaningless. Saving money on housing so that we can spend it on a Disneyland vacation doesn’t prime the economic pump any more than paying more rent so that the landlord can spend it on a Disneyland vacation. Most employed people who want to buy real estate, even at today’s high prices, can. Lots of sacrifices, I agree, but money is cheap and lending is loose.

    Domus:

    If someone is keeping housing vacant, then I’ll grant you that its not housing to them. I don’t run across that much, but it exists.

    If they’re flipping assignments, well, strictly speaking, its not housing because it isn’t built, so I’m not giving you that one (it also doesn’t show up in our daily numbers, fwiw).

    Holiday homes? 1, we’re still talking Vancouver, right? Not the Shuswap? 2, if its a holiday home, then that’s housing, not investment. If its a holiday home here, then they’re using it as housing when they’re on holiday. If you want to argue that conspicuous consumers are keeping prices high across the Lower Mainland because they’re NOT renting their housing and thereby restricting supply, then fine, but I think you’re stretching.

    If, out of 100 households, 30 were renting, and the other 70 were owners, there would be no housing shortage or surplus, if we had 100 houses.

    If, out of the 100 households, we had 10 people owning 70 houses, and 30 owners, we’d still be fine, provided we had demand for the 70 houses, whether it came from 10 owners and 60 renters, or 70 renters, or 10 owners using 2 houses each and 50 renters. However, if we had 100 houses, regardless of who owned them, and 110 households, we’d have rising housing costs.

    Bottom line, we could have 100% of housing in Vancouver owned by guys on Mars. As long as we had substantial demand for the housing, it would be rented. Demand for housing is not the same as demand for ownership. Housing must be affordable, but its also a necessity, which makes it a little different from cars, or Starbucks or flat screen TVs. It can be obtained through purchasing or renting. Owners of investment property can subsidize renters (whether subsidization is the right description for the trade off is debateable, but you’ve seen renters crow about how great a deal they’re getting, so two people can agree that one owns two houses while the other rents one).

    And if the downtown apartments are being kept vacant the owners can withstand most bad economic developments. They already hold property without cashflow. The decision to continue holding or to sell is completely discretionary. It may seem insane to hold non-cash producing property from a Vancouver perspective, but across time and across the world its far from uncommon.

    Anyway, I’m still unconvinced that a mulitplier of median or average income is a determinant. And there’s no way we’re going to break 11k this month. Just wait ’til you see today’s numbers 😉

  46. Domus

    Cool, now I expect a big selling day… not my night, the Canucks lost and sales picked up…..

    We will hit 11k sometime soon, though…..

  47. Skeptic

    We may hit 10k before we hit 11k

    Spring is definitely here now…

  48. Domus

    You seen the numbers yet? Care to share?

    Skeptic, I have no idea why you keep on pushing the argument, but there is only one way for prices to go and it is down…….

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