Friday’s Numbers

There were 303 new listings Friday and 215 sales, for a sell/list of 70.96% the sales 44 or 20.47 went over list.  12 of those were on the Westside. 8 were in East Van,  3 in Richmond, 2 in Port Coquitlam, 2 in Pitt Meadows, 2 in New West, 3 in North Van, 2 in Maple Ridge, 3 in Coquitlam, 6 in Burnaby and 1 in Surrey. 

Average list price of the sales was $551,400; average sales price was $543,288, a difference of $8,112, meaning the average sale went for 1.35% under list price. 19 properties went for list price. One property went for 43%($379,000) under list while the highest over list was 25% ($50,000) over .

There were  22 (again) million dollar plus properties sold, with  two over $2 million. Average days on market to sale was 37.

There were 89 apartments, 4 duplexes, 62 houses and 38 townhouses sold. 

14 apartments, 1 duplex, 19 houses and 9 townhouses sold over list.

There were 122 price changes, of which 15, or 12.30%, were increases. The average original list price of price changes was $553,556; the average new price was $540,734, a difference of $12,822, meaning the average price change was -2.14%.  Average days on market to price change was 45 days.

Inventory in my target area rose  to 11,318, while over 90s dropped  to 1,602, or 14.15%.

0.95% of all active listings in my target area had their prices reduced Friday.  The 14 day rolling sell/list was 65.34%.

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28 Comments

Filed under Daily Numbers

28 responses to “Friday’s Numbers

  1. asun

    43% underlist? Are you kidding me? Is there any certain circumstances with that sale?

  2. Domus

    Bearish numbers, in my opinion.
    Strange market, hard to predict where it will go in the next few weeks.
    Easier to predict long term, always in my opinion (long term is down if you had not guessed).

  3. Johnnyrent

    (also posted on Vancouver Condo)

    Here’s some interesting grist for the mill from the Chicago Tribune http://tinyurl.com/2uadgl

    Many of us know that the continent’s number one real estate booster, David Lereah, has resigned his position as chief economist and spokesperson for the National Association of Realtors.

    What may come as a surprise are his remarks post-resignation which represent a profound about face replete with dire predictions. As evidence, his last official appearance for the NAR is a speech to realtors in Washington DC. Asked for a hint of the thrust of his speech, Mr. Lereah said “I am going to say, look, guys, we all have to face the music,’ Lereah said. ‘We strayed from [economic] fundamentals, and we’re paying for it. It’s not an all-out bust, not a crash in real estate, but it is a recession. This is going to cleanse the markets and in the long term this is what we have needed.’”

    What I find interesting, beyond his prediction per the article that the US will enter its first real estate recession since the great depression, is the emphasis he places on prices straying from fundamentals.

    There has been much debate on local RE blogs about whether and to what extent economic fundamentals ultimately govern RE prices. It would seem that the industry’s most high-profile RE cheerleader is in no doubt about the matter.

    Mind you, its different here.

  4. robchipman

    Fundamentals do govern real estate prices, within boundaries, which is why we can depart from them both ways to one extant or another. I can’t agree, Johnny, that there has ever been serious debate about that (which I guess is the same as dismissing any claim that “It’s different now, we’re in a new economy”).

    (I’ve got a caveat for that, in that inflation, while reported to be very low, sure doesn’t seem that way. You could argue that’s new. You could also argue that in spite of inflation RE stays within the wide boundaries, but that we have to view nominal prices through the real price lens).

    The market will change. History doesn’t repeat itself, but it does rhyme. I think the big questions (what’s going to happen with China/India, whither the US economy, are we on a new, long term inflationary tack, and how does that all relate to interest rates and money supply) are more interesting questions than whether there will be a crash or not. Even if we ignore those bigger questions and stick with a crash/correction scenario, the key has always been “How much and when?”

    It will be interesting to see what else Lareah comes up with. I’m not sure I call his comment “It’s not an all-out bust, not a crash in real estate, but it is a recession” a “dire” prediction, but we don’t know what else he’s going to say in the near future. It will also be interesting to see if his status as shill evaporates if he changes his tune (I mean, once you decide a guy’s a liar, do you trust him because he changes his story?).

  5. Snick

    “Even if we ignore those bigger questions and stick with a crash/correction scenario, the key has always been “How much and when?”” -Rob

    Much more and sooner than many people would expect, IMO. These things usually take people by surprise on the upside AND the downside.

  6. bakakuse

    I’m a bear but I agree with Rob 100% that inflation is pushing this market higher and higher. Too much money chasing too few assets, and the central banks have not been pre-emptive in raising rates or have been as surprised as I’ve been at the continued strength (probably the former).

    People receiving inheritances, downpayments from parents, speculators, tradesmen and realtors with more money than they ever had, uranium and oil stock investors over the last few years, and let’s not forget the “immigrants” with suitcases and carry-on bags full of cash buying up everything (wink wink) are all causing prices to churn higher.

    The BOC will probably have to raise rates but it probably won’t be more than 100 basis points, bringing the overnight rate to 5.25, will that kill this market? I’m in no hurry to buy, and I do believe a time will come-for who knows what reason- when a few are in a hurry to sell, or I’ll just be priced out forever.

  7. accountant88

    Rob,

    Thanks for the detailed stats.

    Noticed that 19 of the 62 houses sold were above list price. That’s 31% or 3 out of 10 houses! Wow!

  8. Skeptic

    Domus: “(long term is down if you had not guessed)”

    Snick: “Much more and sooner than many people would expect, IMO. These things usually take people by surprise on the upside AND the downside.”

    Boring to hear the same old mantra being repeated without any reasons why. Just repeating it will not make it happen.

    Bakakuse: The BOC sets rates to suit economic conditions all over Canada, primarily with reference to inflation. The bank is probably more interested in the RE market overall, rather than individual cities, like Vancouver. I do agree that inflation would appear to be higher than the official rate, look at gas prices for example.

  9. Domus

    I would repeat why (incomes not keeping pace, over-borrowing, economic slowdown in the US, demographics, oversupply, slower immigration). These are documented facts, like them or not.
    They have also been discussed extensively, with a faor amount of opposition from bulls who refuse to see reason.
    I am not going to report the arguments in each simple post, but I am happy to report the conclusion: Vancouver’s RE is set for a substantial fall. Many people will feel the pinch, especially does who jumped in late and stretched their borrowing. If you are considering to buy now, think again.
    As usual, this is my humble opinion.

  10. Snick

    “I would repeat why (incomes not keeping pace, over-borrowing, economic slowdown in the US, demographics, oversupply, slower immigration). These are documented facts, like them or not.
    They have also been discussed extensively”

    -Domus

    There are your reasons, Skeptic.

  11. coco

    What I find most interesting is the turn to condos and townhouse purchases. Houses are selling, but not as fast as they did last year. Is affordability getting in the way? I have seen a few ads in our local real estate paper, “deal fell through, back on the market” a view times now.

  12. coco

    That should be a few times, not a view times.

  13. Skeptic

    Domus/Snick, these are all inconclusive ‘reasons’, not ‘documented facts’. Sure there’s been some discussion but I don’t remember everyone agreeing with your perspective on each of these issues.

    Might be good spacer topics for Rob between the daily numbers for us to have at it during the week. I’m interested in the views of others here as well.

  14. Domus

    Skeptic,

    I was n ot hoping to convince you. To say that, for example, oversupply is not a fact means you are either blind or malicious. Take a drive. Talk to people. Look at the sky over downtown.

    To say that the economic slowdown in the US is not a fact (but, as you put it, an inconclusive reason) is again twisting the truth. Go to the CNN or Bloomberg websites and see what the big news in the US is….

    Same goes for all the other elements of my list above. I was not expecting you to agree with me, but I now finally understand that, short of being completely blind, you must be either malicious or have some vested interest.

    Will you come up and tell me the sky is not blue next?

  15. robchipman

    Domus:

    Skeptic has a good point. You’re engaging in the time honoured debating technique of presenting theory as fact. Its acceptable to do it, and the theory may have some strength, but we all benefit by recognizing the difference between theory and hard fact. (You’re also using the less honoured, but older and more common debating technique of attacking your opponent’s motives instead of answering his points).

    Over-supply looks obvious to you, so you call it a documented fact. However, our supply is still selling, so it isn’t “over-supply” yet. Future supply may be too much, but we haven’t seen that yet, either. We are selling more slowly than past years, but we’re still selling at a fast pace.

    Over-borrowing is in the same category, although perhaps slightly less so. In the States there is a sub-prime problem, so over-borrowing is a fact. Here we haven’t seen the same issue. Money is still flying out the lender’s doors, and there are indications taht it will get easier, not harder. Its a fact that there is a lot of borrowing (and that may be troubling) but there is no proof that there is over-borrowing.

    Your other points could well be factual (I’m sure someone, somewhere, would dispute them even if I won’t). Slower immigration and US economic slowdown on there own are facts. What isn’t a fact is that they are undisputable documented causes of real estate slowdowns. In other words, they can contribute to a slowdown, correction or crash, but their effect could also be over-ruled by other things.

    Incomes not keeping pace and demographics are clearly subjective. Property prices are paid by a combination of other equity and mortgage funds. Income only has to keep pace with the cost of mortgage funds, and almost does so by definition. The unknown is the role of other equity, whether from other property, parents or some other source. Until you can address that you can’t call the income issue a fact.

    Demographics? What does that mean? Boom, bust, echo? Boom and simply bust? That really scary graph in “An Inconvenient Truth”? You can call “demographics” a fact, but when you use it that loosely you may as well throw in “weather”.

    It seems like I’m splitting hairs, but I don’t think I am. A reasoned argument is no less valuable because we recognize that some parts of it are still speculation. After all, you’re trying to predict the future, and that’s a tough chore. If your argument has any merit it will stand up without confusing theory with fact or the personal motive attack.

  16. John

    Domus:

    That’s an ad hominem debating tactic. Just because you claim Skeptic is blind, has malicious intent, or vested interested doesn’t make his point (that your reasons are undocumented facts) incorrect.

    Taking a drive to check out the oversupply sounds like anecdotal evidence to me.

    I’m not saying you’re wrong, but at the very least focus on attacking Skeptic’s argument, not Skeptic himself.

  17. Domus

    Rob/John:

    respect your view but I cannot change the way things are.

    Given current demographics patterns there is an oversupply of constructions. If you use StatsCan numbers and then you take VHB estimates of new housing units you will see that’s a fact.
    You may not call oversupply because maybe people are still willing to buy those properties at the moment. But from a pure arithmetical perspective that’s what it is.

    As for incomes, I am a bit exhausted to have this conversation: incomes are dramatically lower that house prices in the lower mainland. By any historical standards this is unprecedented. I call that incomes not keeping pace with house prices. This is a fact (just look at the price income ratio over time). Will this have an impact on prices? This is an opinion. in my opinion, yes it will! In your opinion it will not. But why do you insist denying the fact?

    I am not much for personal attacks and I don’t mean to be rude to skeptic. However I cannot accept that people twist facts. I acknowledge I am not the oracle: I can be wrong. Based on facts I develop an opinion (e.g. we are in for a big crash in Van RE). You can question my judgements and draw different consclusion based on the same facts. You should not however question the facts.

    I hope I am not coming through as arrogant, because I truly don’t mean to be. But I find that some things need to be accepted from both sides.
    If you don’t, maybe there is not much reason for talking.

  18. robchipman

    Domus:

    No offense (in fact, you’re making me smile). You can’t say “If you take these numbers and combine them with this guy’s analysis you get a fact”. The fact stands on its own.

    You can say “There is X amount of supply coming onstream this year (fact) and if you combine that with VHB’s analysis (non-fact) of Statscan numbers (fact) you can come to a reasonable conclusion (which is still not a fact).

    When I say that we don’t have oversupply now I’m saying that the supply we have is being bought at close to list price (fact)within short time frames (fact).

    When you say incomes have not risen as fast as house prices you are stating a fact. When you say property prices have reached unprecedented levels in the Lower Mainland you are also stating a fact. Combining the two in isolation and deciding that it wil have an impact on prices is, as you say, an opinion. Frankly, its a well reasoned opinion, but it does ignore a few issues. What it isn’t is a fact. The same facts that you used to reach it could be used by someone else to come to a different conclusion.

    Nobody is really denying the facts you present. Skeptic was saying (and I’m agreeing with him) that you apply the label “fact”a little too generously.

    Incomes not keeping pace with property price is a fact – its clear that incomes have simply not increased as fast as prices. No dispute.

    Over-supply is not a fact. That there is an increased supply is clear. That it is too much is not. You can’t call it “twisting the facts” when someone points out that the current “over-supply” is, by and large, being absorbed.

    I don’t find you arrogant. I suspect that you’re so passionate about your position that you’re blurring the lines between facts ( by definition almost indisputable by reasonable people) and the conclusions you reach based on the facts that we agree on.

  19. Domus

    Rob,

    VHB’s estimates of the flow of new unit completions is pretty accurate and based on developers’ information. It is a fact.
    For incomes, I never stated as a fact the coming crash. The fact is the RE price – Earnings ratio.
    It is pretty amazing right now. Then you can draw your conclusions.

    Skeptic takes a frankly aggressive attitude to people disagreeing with him/her. I do not enjoy this kind of attitude in a discussion. That’s all.

    Having said that, I actually consider myself (maybe at fault) as being as little passionate and detached as it gets about housing. But I truly believe that my list above is, by and large, a list of empirically proven facts.

  20. robchipman

    Domus:

    I like that you’re passionate enough to respond, and to take the time to craft your answers.

    RE price/earnings ratio is out of tight now. I agree, and it is a fact (I have some qualifiers, and see a direct link between this and the post about Jeff Brown).

    VHB’s numbers about oncoming supply can also be regarded as a fact. Fair enough.

    I can agree with your fact that P/E is tight, but disagree with your conclusion, because, after all, I’ve got a fact on my side too: its demonstrable that the income generated by a property is not always the determining factor in its value.

    I can agree with your number about future supply, and accept it as fact, but disagree with your conclusion: supply has long been pegged as excessive, yet in fact we’ve absorbed it.

    I don’t think anyone is disagreeing with the empirically or almost empirically proven facts (I’m certainly not). Its the opinions/conclusions that are called facts that are attracting the fire, and really, that’s fair game.

  21. Noname

    Rob said – “supply has long been pegged as excessive, yet in fact we’ve absorbed it.”

    Bears are simply saying that the supply is not truly being absorbed.

    IMO, a condo being bought and left empty so that it can be dumbed back onto the market 3 years later is NOT absorbtion. It’s basically taking a property off the market for 3 years and the absorbtion is only an illusion due to its short term temporary nature.

    Now, where bulls and bears disagree is to what extent speculation is happenning.

    Bulls argue that people will move here and the excess supply being built will be ‘truly’ absorbed by people actually living, working and staying long term.

    On the other hand, bears are simply saying that there won’t be any significant migration moving to BC and the excess supply will be lingering on the market while prices drop restroring the supply/demand balance.

    Conclusively, bulls argue people will be moving here, bears argue people won’t be moving here. It’s that simple. Who is correct? Who knows? We will see.

    Of course, there is the perspective that says that people won’t be moving here, yet prices will stay high. IMO, that perspective is nonsense since given current population and supply numbers, if people are not moving here then the market will be flooded with houses which won’t be sufficient to maintain high prices.

    Noname

  22. M-

    These links cover demographics, supply, and population growth. The “baby boom echo” is more like a petering-out of the boom itself. There is no sudden group of boomer kids pushing through.

    Demographic profile, and census dwellings count: http://tinyurl.com/yv7gar

    GVRD housing and population statistics: http://tinyurl.com/2k944l

  23. Skeptic

    Domus and all, sorry to start this conversation and then delay responding, been flat out with work and other things.

    Anyway, one of the points raised above is immigration, the stats are here: http://www.cic.gc.ca/english/pub/facts2006/facts2006_provinces.html

    If you look at Vancouver it looks pretty constant, sure 2005 was higher than 2006 but 2006 is still close to or above the medium term average. Can you please explain why you think immigration is a negative factor ?

    On the supply side, sure the crane count is huge, lots of condos being built. Will there be an oversupply problem in the future ? Maybe. Will it affect the whole market or just the condo segment ? Good question, what do people think ?

    The other factor on oversupply is completions. Lots of these developments are way behind schedule, so instead of the market being flooded, delays are stretching out the completion of these projects. It sounds like the delays are due to shortage of people, skilled tradesmen, etc.

    As to my attitude, I try to be clear and direct, not aggressive. If you post something on the internet that can’t be factually backed up, you should be prepared to be called on it. I don’t think I’ve been disrespectful (apart from calling you doomus once 😉 ). In fact, if you can quote facts from reputable sources, I’ll be happy to agree with you. If you can come to logical conclusions based on the facts, I’ll concede that also. If you continue to post what I consider are non-factual one sided opinions, I’ll continue to respond.

  24. Domus

    Skeptic,

    here are some replies to your notes.

    1 – Regarding immigration: try and find a table at Statscan documenting immigration rates since 1970. You will see that we are well below the levels experienced in the 1990s. (You might get lucky and find one such table on the bears’ blogs – I have seen them many times. VHB used to have a permanent link on his page, but now there is no access.) My point: immigration is definitely not collapsing, but it cannot explain growth. If anything, it has been shrinking in the past 10 years.

    2 – Maybe it is condos that they are building? Whatever that is, it represents housing units which will be future supply. Shortage of workers + building costs are slowing down things: fair enough, it might just mean that we will have a bumper effect when they all flow in. You seem to agree that there is a huge inventory run-up in the pipe. It will get to the market at some point.

    My conclusion, was the following: population is not jumping up, supply is going to jump up: unless loads (really loads!) of foreigner buy into Vancouver RE, we will have a discrepancy between demand and supply. What then? My guess is that prices will go down. Yours is that they won’t (for some reasons yet unknowns).

  25. Domus

    “If you continue to post what I consider are non-factual one sided opinions, I’ll continue to respond.”
    What was non-factual among my reasons for a crash? You agreed the US crisis is clear and present. Fact.
    Price-income ratios are as high as ever. Fact.
    People using highly leveraged mortgages ((check CHMC)). Fact.

  26. Skeptic

    On the immigration thing, it would be helpful if you could provide a link to the chart you are quoting (if you’re making the case, provide the link, it will strengthen your viewpoint). However housing prices have been going up strongly for around 5 years give or take and the immigration figures have been relatively constant over this period. Nothing appears to have changed, so why should we expect an impact on real estate from this factor. Have you got some insight into the 2007 numbers, are they changing ?

  27. Skeptic

    On the affordability issue, have you stopped to consider that perhaps the problem is incomes and not home prices ?

    Take a look at this graph: http://cuer.sauder.ubc.ca/cma/data/HousingPrices/housing-real-pctgrowth-vancouver.pdf

    What its basically saying is that over the period of the graph, home price increases have averaged 3% in constant dollar terms. When the link to this page was posted on Rob’s site, there was discussion from Bears about what a poor investment housing was over the long term because it really only tracks inflation or a little better (and someone posted a link to a 100 year chart as well). If that’s the case, maybe house prices aren’t the problem, incomes not keeping pace with inflation are.

    I’m sure you could use your ratio method to analyse gas prices and incomes and come to the conclusion that that ratio is out of whack as well. Does that mean that gas prices must come down ?

    In any case, how the affordability issue plays out is that ftb’s buy smaller places (i.e. condos) or get further from the city, i.e. Maple Ridge or choose to rent.

    These are all complex issues, however I don’t see the sky falling in and the 20%+ price declines that you are predicting as a result of them.

  28. Skeptic

    Sure the US is having a crisis, agreed. It hasn’t played out in prices yet though (it may do). What we’re seeing is lots of inventory. In fact its surprising that the inventory has gone up so much and pricing has been affected so little.

    The US is a different country, do we expect some impact, yes probably. Will it cause the sort of catastrophic price drops you are hoping for ? Doubtful.

    Also remember that the US is gearing up for an election and the politicians there are all aware of the sub-prime fiasco and the size of that problem. I wouldn’t be surprised to see the politicians turn this into an election issue and try to support/bail out those affected. Historically, the US holds things together well during election years.

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