Monday Numbers

There were 274 new listings today and 184 sales, for a sell/list of 67.15%.  Of the sales 43,  or 23.37%, went over list.  12 of those were on the Westside. 5 were in East Van,  3 in Richmond, 2 in Pitt Meadows, 4 in New West, 5  in North Van, 4 in Maple Ridge, 1 in Coquitlam, 5 in Burnaby and 2 in Surrey. 

Average list price of the sales was $609,387; average sales price was $603,887, a difference of $5,50001, meaning the average sale went for 0.78% under list price. 21 properties went for list price. One property went for 9%($440,000) under list while the highest over list was 25% ($235,000) over.

There were 22 million dollar plus properties sold, with  three over $2 million. Average days on market to sale was 33.

15 apartments, 1 duplex, 23 houses and  4 townhouses sold over list.

There were 91 price changes, of which 17, or 18.68%, were increases. The average original list price of price changes was $658,772; the average new price was $657,257, a difference of $1,516, meaning the average price change was -1.5%.  Average days on market to price change was 53 days.

Inventory in my target area rose  to 11,579, while over 90s also rose to 1,889, a percentage jump to of 16.31%.

0.64% of all active listings in my target area had their prices reduced today.  The 14 day rolling sell/list was 59.71%.

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56 Comments

Filed under Daily Numbers

56 responses to “Monday Numbers

  1. first_time_buyer

    Here are some comparisons between April 2006 and April 2007 in Rob’s area

    April 2006:

    Listings 4757
    Sales 3771
    Over 90: 1235
    Active Listings: 8684
    No. of business days: 18
    Sales/New Listings: 79.27%
    MOI: 2.30

    April 2007:

    Listings 5889 (+23.8%)
    Sales 3515 (-6.79%)
    Over 90: 1889 (+65.41%)
    Active Listings: 11579 (+36.38%)
    No. of business days: 19
    Sales/New Listings: 59.69%
    MOI: 3.29 (+43.04%)

    I leave it upto individuals to evaluate it the way they deem fit.

  2. ceejay

    More people are trying to cash out…and a lot of them are, lol.

  3. WoW

    I have to update my prediction – 12,000 by end of THIS week – looks like the leading indicators well entrenched….

  4. VHB

    W0W – won’t happen. Listings will drop by a few hundred since it was the end of the month. Me, I stick by my May 15th prediction for 12K.

  5. John

    first time buyer,

    Thanks for posting that. Based on those numbers, it looks like we’re heading towards a balanced market. Real estate is cyclical so eventually prices will trend down.

    That said, comparing 2007 numbers to 2006 (one of the best years in van RE ever) might be a little unfair. If we had the data (and on this blog we just don’t), it would be more fair to see comparisons of April 2007 to a 20-25 year average of April. Historically we might find that April 2007 has been better than average.

  6. Jim

    ftb:well said.
    Take a page out of Rob’s book and let the numbers do the talking.
    I have some numbers:
    Cost of carying former RE holdings $584/day 365 days a year.
    Being told I sold to soon,am crazy to be shopping now,called a bear,called a bull by 30 somethings that know better:priceless.

  7. Jim

    John: trend.

  8. Paulb

    May 9th for 12k…

  9. WoW

    WHEN does ‘cooling real estate market in Vancouver’ make the front page of the local papers – any predictions on if/timing?

    front page, top headline

  10. VHB

    WoW: I pick July 4th, after the June REBGV numbers are released. The Sun won’t say anything until it is patently obvious and old news.

  11. robchipman

    “I leave it upto individuals to evaluate it the way they deem fit”.

    Good call. Here’s my read.

    “More people are trying to cash out…”

    This could be very true. After all, active listings are up.

    “and a lot of them are, lol”.

    Depends how you define “lots”; after all, sales are down. Not exactly the rush to the exits that has been predicted.

    It will be interesting to see where prices go. What do we call lower volumes with higher prices, should we actually see that?

  12. Anonymous

    “and a lot of them are, lol”.

    Any evidence they are cashing out and not just upgrading ?

  13. rentingsucks

    What do we call lower volumes with higher prices, should be actually see that?

    I think that is called the beginning of the end of a 5 year bull market :-). You know the point when Wiley Coyote goes off a cliff but keeps running really hard. Then slowly he realizes that there isn’t ground underneath him any more…then we all know what happens.

  14. Jim

    Rob:
    We are seeing lower volumes *because* of higher (to high) prices. This is the worst kind of way for an up cycle to end. It means people are giving up, and doing so before higher interest rates, higher unemployment, and before the Canadian/BC economy comes of fthe boil. What happens when the latter 3 situations prevail?

  15. Anonymous

    Rob said: “What do we call lower volumes with higher prices, should we actually see that?”

    Rob, I think we call it “Realtors’ unemployment”…..

  16. robchipman

    Jim:

    There is no question that higher interest rates + unemployment+bad economy equals trouble, but that picture is bad enough that it will damage much more than real estate (some of us have seen those economies before, right? Not so nice).

    On the other hand, how can an up cycle not end with lower volumes with higher prices? It almost has to happen. Rentingsucks’ Wiley Coyote image is only that – it’s certainly not a rule. We’ve seen prices retreat relatively small amounts in the past after hitting record peaks. That does happen. (I’m not saying it will happen now; I’m saying it does happen sometimes).

    You’re right, though: i% up, employment down, economy bad, we’ll see widespread tears (aka buying ops. Keep your powder dry).

  17. /dev/null

    Depends how you define “lots”; after all, sales are down. Not exactly the rush to the exits that has been predicted.

    But aren’t listings the “rush to the exits” (people trying to get out the door, to follow the analogy)? It isn’t how many people successfully get out the door (sales). So increased listings and decreased sales would seem to fit the phrase perfectly.

    Too many people trying to get out of too small of a door never ends well.

  18. robchipman

    /dev/null:

    I’m not sure I can agree. What’s so great about a “rush” if prices don’t fall? (Of course, price drops may be in the future, I concede).

    The idea that mere high volumes of listings is disastrous doesn’t make sense to me. What’s critical is how badly these people need to sell. If they’re not motivated enough to drop the asking price and actually sell I’d conclude that they’re able to hold.

  19. Noname

    Rob,

    How long do you think those 60000 people in Phoenix will be able to hold a depreciating asset?

    Noname

  20. robchipman

    noname:

    Tough question because of the unknowns (at least unknown to me) but the theory is easy.

    Real estate investors tend to be long term, even when they don’t have to be (they have the ability to sell at a loss, but generally don’t choose to; if you can sell at a loss you can often also hold).

    Non-investors tend to hang in because they either want to or have to. With pockets that are less deep than investors they are faced with either walking away from a portion of their downpayment or going further, and reaching into their pockets to make up the shortfall between sales proceeds and the amount required to complete the sale. Some of these guys can’t pay the mortgage, let alone pay the OSB required, so they get foreclosed. Some can’t pay the OSB, but can service the mortgage. They service the mortgage because they can’t sell. A third group can pay the OSB, and can service the mortgage, and so are faced with the decision between taking lumps now or waiting it out.

    I don’t know the breakdown in Phoenix. If everyone bought with zero down and teaser interest rates, look out. That’s probably not the case.

    I do know that I collected years and years of rent on properties bought during the ’81 run-up that saw substantial depreciation. Those owners hung on. I sold them additional properties throughout the 80s and 90s. Many have since cashed out (do the math – buying properties in the 80s makes them how old now?) but I’m probably collecting rent on some of them still. I don’t know how representitive they are of Vancouver as a whole, either then or now, but I do know that they were owners with depreciating properties and they hung on. It does happen.

    I also have clients who own American properties, specifically in Las Vegas. I asked them for their opinion. They aren’t worried about depreciation. They are long term holders. Perhaps not representitive.

    So, how long will 60,000 in Phoenix hold on? How long is string, how high is high? Can’t say. I worked on projects on the I-30 strip in Dallas (foreclosures of historic proportions in the 80s), so I realize that US disasters can be impressive. I also realize that the future is yet to unfold, and the maps are of dubious quality.

  21. ceejay

    Compared to last April sales are down only 7%. Last April was very busy by historical standards, right? That’s what I mean by “lots”.

    Cashing out and upgrading are more-or-less the same (although upgrading may not be so safe).

    Sill waiting for that cheap 2bd+ den yaletown house-sit rental, Rob 🙂

    Cheers.

  22. Noname

    Thanks Rob,

    In that case, I guess it really comes down to what percentage of owners are speculators vs. long term investors.

    Noname

  23. rockandhardplace

    Rob, and others

    I am curious…….I am not sure if prices will go down or not. However, I am getting the impression that very few people forsee apreciation in real estate over the next 6 months to a year. Is this correct?

  24. Domus

    Everyone is free to choose how to invest their money…..some people like RE so much they will be happy to take a substantial loss over 5 years.
    In those same 5 years, stock market would probably deliver a (conservative) composed real return of 35% based on history.

    So, here you have it:

    – if you spend 500k on an apartment and supposing you just lose to inflation (say 3% per year) and there is no nominal change in prices, after 5 years you have: 500k – 70k = 430k

    -if you invest 500k on the stok market, after 5 years you get: 500k + 175k = 675k

    Notice: this is a conservative estimate under the assumption that house prices do not crash or even go down slightly in nominal terms. Also the real stock market return is less or equal the historical average. So I am picking the best case scenario for housing.
    And yet….. after 5 years you can choose between holding 430k or 675k in your hands.

    You must love RE a lot to be willing to sacrifice 245k in 5 years (245-675-430)…..

  25. Anonymous

    if you invest 500k on the stok market, after 5 years you get: 500k + 175k = 675k

    less taxes ?

  26. jojuchst

    You have to pay taxes on your investment ppty also! not to mention commission, ppty tax, upkeep, etc.

  27. $froma$ia

    I really love you guys, your all a good read.

    VHB will your blog come back for the correction?

    Also having a laptop makes for a good toilet read.

    Keeps my wife away from my laptop!

  28. Geezer

    Domus said: “So I am picking the best case scenario for housing.”

    Well, not quite.
    (1) We can all look at the market variables and make our best guesss but I don’t think anybody can say with with your degree of certainty that prices will not be higher in 5 years. I recall when the UK market “bubble” burst a few years ago yet today’s prices in London are way higher than they were then. Of course all the bears are busy screaming “bubble” again and they may or may not be right.

    (2) You completely ignored the rental income of probably $2,000 pm ($120,000 over 5 years – and that’s assuming no rent increases) Of course if you choose to live in it you are enjoying a $2,000 pm benefit tax free.

    Many analysts are saying that most stocks are currently extremely overpriced and a significant correction is due – much like our RE. Your anticipated 35% gain may be highly optimistic and as anonymous said – where is the tax calculation?

    Bottom line is nobody really knows where the stock markets or RE markets are going to be in five years but I would suggest with some confidence that it is very, very likely (though not guaranteed) that both markets will be a lot higher in ten years.

  29. Noname

    Geezer – “that it is very, very likely (though not guaranteed) that both markets will be a lot higher in ten years.”

    I don’t mean to sound like a broken record but the Japanese outcome begs to disagree with your optimism.

    Noname

  30. Domus

    Geezer,

    even allowing for 50k appreciation and 120k rent (which seems very high for 5 years: e.g. 2k per month, net of refurbishments, condo fees and maintenance costs) you’d still be down over 105k in 5 years….that’s at the tune of a 21k loss per year.

    Having said that, I really do not think you are going to make 50k appreciation and 120k of rental income, but even in that case, it seems to me you are better off renting for the time being…..

  31. Jim

    Geezer:
    You are truly a wunderkind.
    “I don’t think anybody can say with with your degree of certainty that prices will not be higher in 5 years”.
    Agreed-no one can predict real estate prices 5 years out.
    “I would suggest with some confidence that it is very, very likely (though not guaranteed) that both markets will be a lot higher in ten years.”
    Yet you feel confident predicting 10 years out.
    Impressive.
    5 years is tough to predict but 10 years is easy. Based on what?

  32. tqn

    “if you invest 500k on the stok market, after 5 years you get: 500k + 175k = 675k”
    not sure about the 35% but will take your word for it.
    questions:
    1.where are the inflation, capital gain tax accounted for in 500k on stock market? doesn’t stock market crash once a while?
    2.if 500k in RE investment, where are the rental income, appreciation etc…?
    I suggest that you paint a complete pictures…i.e plus and minus, pro and con in each investment senario. I hope that you are not a financial advisor or the like!

  33. Domus

    Regarding rent and capital gains in RE, the assumptions are discussed above. All figures are before taxes, though. I am not sure how differential taxation plays out. Also, all figures are in real terms.

  34. Mightymouse

    500K @ 5% (long term GIC) compound interest= $638,140.00

  35. Domus

    Thanks Mightymouse….this just goes to show that even if you buy a GIC you are better off (by nearly 60k) than buying Vancouver RE, over the next 5 years.

    Since this blog seems to be full of skeptics and since i a not a financial advisor, i would suggest many who are currently thinking to buy RE in vancouver to see a qualified F.A. and that will show them the math. My example was a ballpark illustration.

    Still it is quite powerful that, even using further appreciation in RE and upper end returns on rent, you still make more money with a GIC….

    The only case RE is going to deliver better long-term results (yes, 5 years is long-term for many human beings!) is if we get a real (not nominal appreciation) of at least 75k over the next 5 years (roughly 100k nominal). Anything is possible, but I have a feeling it ain’t gonna happen this time…..

  36. Domus

    “if you invest 500k on the stok market, after 5 years you get: 500k + 175k = 675k”

    I am using 35%, which a low-end estimate……even discounting a downfall (which is usually resolved within 18 to 24 months in liquid stock markets), you should be able to get that return within 5 years….

  37. Anonymous

    500K @ 5% (long term GIC) compound interest= $638,140.00

    Less taxes and how much rent do you pay over the 5 years ?

  38. Domus

    Affordability: I know that there are strong disagreements on this, but I think that it is the key to the whole RE market’s future patterns.

    After all, it is what triggered the crash in the US through the reckless lending needed to “afford” things.

    Mohican has an interesting discussion today on this very topic:

    http://langley-financial-planning.blogspot.com/

  39. Domus

    Anonymous:

    you also pay rent….it is called interest and is the rent you pay on the money you didn’t own, but you used to buy……that’s the usual argument about paying someone else’s mortgage…..it doesn’t make much financial sense……

    Example: take a 500k apartment bought with 50k down. To finance 450k at 5.5% over 30 years will cost you roughly $2650 per month. That’s not including condo fee of $250. let’s even forget taxes, which would add another $200.
    It works out at $2900 excluding taxes.
    The rental value of that property in Vancouver is probably below $1800 a month (which is also taxed, but again let’s not complicate things).
    NOTICE: of the $2650 you pay in mortgage, roughly $2000 per month are actually interest, only $650 go to pay back the debt.

    So, who is better off now? If appreciation stop, you are pretty much screwed…..

  40. millionpitfall

    I also agree affordability can cause prices to fall or the market to collapse because it has finally outpriced itself for a huge majority of buyers.

  41. Domus

    Hey I just checked on the Va Sun, and it turns out Gordon Campbell is making only 126k per year…(although he is up for a big rise)….

    Funny, in this RE market Campbell could barely afford a GVRD detached, with not much cash to spare……talking about affordability..

    Does his job come with some accommodation as benefit?

  42. Millionpitfall

    Domus,

    Don’t you understand, Gord had to give himself a big raise to be able to qualify for a higher mortgage and a better house.

  43. Millionpitfall

    Speaking of affordability, I noticed the builders stopped buying 500k tear downs, because by the time they build a new house on the land, buyers for million dollar homes become scarce.

  44. News Flash

    You guys need to cheer up!

    We are in an economic boom with the olympics on the horizon. Life is good.

    (I Notuce you guys are always grumpy around the first of the month…after paying rent?)

    If you missed the real estate boat, too bad so sad keep renting it isn’t the end of the world. Let those who had the balls to buy real estate enjoy the boom.

    My prediction for APRIL:

    Prices UP UP UP!

  45. Jim

    Rob:
    Your blog is devolving. I think you should shut it down . Then you should publish an email newsletter and charge $50.00 a month for a subscription. Let me know if you want some help with that.

  46. Reknab

    “My prediction for APRIL:

    Prices UP UP UP!”

    A fair prediction, may I ask what what evdidence this is based on?

    As an aside I am a credit analyst for a major F.I. here in Vancouver, we approve applications for all of western Canada. We have noticed that the numbers of Alberta based deals (vs. BC) has risen dramatically ove the last 6 months to a year to the point know where greater than 6-7 out of 10 incoming deals are from Alberta. In the past we generally always had a greater percentage of deals from BC.

    We have hard numbers on the ratio of AB vs. BC deals, and though I have no hard numbers on the amount of BC deals 2006 vs 2007, I can tell you the volume seems to be much lower than last year , and the previous 3 years. It is my opinion that Alberta is on fire right now, the filing cabinets for AB are overflowing, BC (Vancouver seems ho-hum). Take this for for whatever it is worth. B

  47. Geezer

    No Name said: “I don’t mean to sound like a broken record but the Japanese outcome begs to disagree with your optimism.”

    Sorry I wasn’t more clear, I was talking about the Vancouver market not Tokyo, I suspect that the fundamentals may be hard to directly compare. If you are saying that some massive local or global catastrophe could prompt a similar scenario in other RE markets you’ll get no argument from me. I believe most things are possible but they are not always probable.

    Domus said: “even allowing for 50k appreciation and 120k rent (which seems very high for 5 years: e.g. 2k per month, net of refurbishments, condo fees and maintenance costs)

    Guilty! I forgot the tax as well as the maintenance fee but I still think it’s a little unfair to make comparisons where the “best scenario” for one investment is bearish and the other is bullish, particularly when they are both at historic high points. Thanks for picking me up on the tax and fees though. 🙂

    Jim said: “Yet you feel confident predicting 10 years out. Impressive. 5 years is tough to predict but 10 years is easy. Based on what?

    I don’t feel overly confident predicting ten years out, thats why I said it’s not guaranteed, but I do think a ten year prediction is a lot, lot safer than a five year one don’t you?

    I agree it’s possible prices could drop but I also think that in time they could be (and probably will be) a lot higher. I have difficulty seeing the major drops that some folks seem to be praying for. My long term optimism is based on a very hot economy, low interest rates, near full employment and increasing immigration all with no obvious major changes in sight. But I admit I could easily be just as wrong as some of the bears have consistently been for the last few years.

  48. Jim

    Geezer:
    “My long term optimism is based on a very hot economy, low interest rates, near full employment and increasing immigration all with no obvious major changes in sight. ”
    And this differs from the U.S. how?
    And fyi,immigration is decreasing.

  49. thomas

    what happenned to london? thought that was supposed to be a crash, but now it’s soaring again. manhattan too, that’s taken off again as well. what the heck, didn’t they hear of the subprime bust?

  50. vanreal

    Anecdotally, two houses near me (commercial drive) sold in less than a week, both for over asking. I am talking this week. Doesn’t sound like a slow down to me

  51. Domus

    “very hot economy, low interest rates, near full employment and increasing immigration all with no obvious major changes in sight.”

    Hey, that sounds very much like California last year…..what’s happening there?

    “what happenned to london? ”

    It happened that, when things were starting to adjust, the Bank of England cut rates because it freaked out…..now everyone is saying that was a mistake, because it is going to make the future crash even worse. If you read the British press lately you’ll have a feeling that nobody (really nobody) believe s ina soft landing for house prices there……

    In general, the comments of the smug wisemen who feel like Warren Buffett because they bought an apartment or two five years ago are just history repeating….many people bought tech stocks 10 years ago, many people bought RE in 1980……they were all great investors for a while…..

  52. M-

    New York Case-Shiller index…
    http://tinyurl.com/24otwh

  53. Jaymo

    Bubble? What Bubble? It’s Global and it just may spell disaster for the over-everaged….

    http://tinyurl.com/38x7yp

  54. Jaymo

    Sorry. It should say over-leveraged.

  55. sherri

    Newsflash you speak like a true veteran investor in particular for real estate. Of course many of us who beleive the market will correct have missed the boat cause its never gonna go down right?

    I here it all the time from folks around here that own a home like its some great investment choice that they made. Or ballsy move as you put it. Its kind of funny.

    Do you honestly believe what you are saying? So the housing market will be closed to only the investors who bought in already? That makes a heck of alot of sense doesnt it.

    Yup your right prices are up up up!

  56. robchipman

    Jim:

    Its an interesting idea. I have to say, though, that I enjoy the give and take. Some of the arguments do get weak and repetitive, though, I agree.

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