Monday’s Numbers

There were 322 new listings today and 197 sales, for a sell/list of 61.18%. Of the sales 32,  or 16.24%, went over list.  9 of those were on the Westside. 8 was in East Van, 1 in Richmond, 1 in Port Coquitlam, 2 in New West,  5 in North Van,  3 in Burnaby and 3 in Surrey. 

Average list price of the sales was $589,712 average sales price was $582,251, a difference of $7,461, meaning the average sale went for 1.27% under list price. 19 properties went for list price. One property went for 15%($120,000) under list while the highest over list was also 23% ($269,000) over .  One property went for $4.00 over asking.

 

There were 18 million dollar plus properties sold with 5 over $2 million. Average days on market to sale was 33.

There were 72 apartments, 7 duplexes, 77 houses and 39 townhouses sold.

There were 69 price changes, of which 4, or 5.8%, were increases. The average original list price of price changes was $634,462; the average new price was $613,966, a difference of $20,495, meaning the average price change was -2.73%.  Average days on market to price change was 36 days.

Inventory in my target area rose  to 11,994, while over 90s rose to 1,864, or 15.54%.  VHB is offically scary.

0.54% of all active listings in my target area had their prices reduced today.  The 14 day rolling sell/list was 60.89%.

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67 Comments

Filed under Daily Numbers

67 responses to “Monday’s Numbers

  1. asun

    O’ Sage VHB, when will we see 13K?

  2. first_time_buyer

    if we cross 12K tomorrow, next big thing is 12355, the highest inventory recorded in Rob’s area on Oct 21, 2006.

  3. first_time_buyer

    oops oct 26, 2006

  4. VHB

    Well, let’s look at the grahp.

    If I were wise, I’d walk away from the table with my winnings at this point. Of course, I am not wise, so I will boldly venture forth with a new prediction.

    May 30th for lucky 13K!

    Thanks for the numbers Rob.

  5. Gadwin

    Wow, VHB’s prediction may come true. Even for bears like me, his forecasting accuracy is a bit creepy.

    For the record, what was VHB’s forecast for this year? Didn’t VHB call a price peak in July (?) Other that, I don’t recall what else VHB predicted and his blog is offline unfortunately.

  6. chip

    Prices still very sticky.

  7. Gadwin

    VHB, obviously, it looks like the inventory pile up is not going to slow down anytime soon. However, the median price has been steadily increasing since the beginning of this year. If the market cannot absorb all the inventory being pushed onto the market this year, when do you forsee a stop in the rise of the median price – either a flattening of prices or worse, a reversal?

  8. asun

    VHB needs a few days like last Friday for May 30th prediction to come true. Also, there is a long weekend coming up, so it might be hard to reach 13K by the end of the month. But hey, who am I to doubt VHB’s premonition?

  9. jim

    Hey all. This is Rob’s blog not VHB’s . VHB quit when he took over at the BCREA as chief economist.

  10. e

    My banker and realtor colleagues say that more and more people (esp the seasoned investors who have been through more than 1 cycle) are cashing out. From a conservative perspective, it is a good time to cash out right now (since this is the first time we’ve seen stalling sales and a marked rise in inventory like this). Also, vacancy is at an all time (IIRC) low (this is usually the case at a market peak as more people rent and less people buy).

    They also tell me that those with presales are getting a little nervous (potential competition).

  11. Warren

    Nice one Jim. I don’t know where all of these VHB fanboys came from, but he’s been wrong on many occassions (as he freely admits). I don’t mean to bash VHB he had one of the best blogs, but he’s retired.

    Thanks for the stats Rob.

  12. millionpitfall

    Looks like the data entry clerk at MLS didn’t take Friday afternoon off as was mentioned by Skeptic & Awum on the last thread, otherwise the sales numbers would be a lot stronger.

    VBH,
    The lines on your graph only go to 14,000 looks like you may have to adjust them higher. Nice prediction, take a bow.

  13. ceejay

    Naive extrapolation suggests that listings will climb to 15,500 by October. What is that – around 4 months of inventory? Does anyone know how this market reacts to 4 months supply?

    Cashing in my bonds…

  14. millionpitfall

    Even if inventory keeps increasing, I think prices will be sticky for awhile until some people really have to sell. Assignments, flippers, the 15% to 20% of foreign owned properties, properties sitting vacant, people who have stretched themselves too far financially, will be the first ones to bail if sales remain lack lustre and inventory keeps increasing.

  15. jim

    I highly respect VHB and all his efforts (he has a sense of humour).
    Anectodaly there is a buzz about this Spring being the top from (some) realtors, 2 of my bankers, my financial planner, a friend that owns a home renovation company and a builder I know. Last night I looked at project house in Kits that just had its price reduced by 100k from $1.25m. It will now sell quickly, but is the first major price reduction i have seen on a property I thought was already priced right. This, combined with Rob’s stats, convinced my wife and I to pass on it.

  16. jim

    If VHB is right that would be 150% yoy at June 1st.

  17. coco

    Jim,
    Million dollar plus inventory has been building over the last few months. Although, you can afford this level, the majority of people can’t unless they have sold another home, have excellent income and investments/savings to do so.

    It’s quite common to see 100k to 400k price reductions on some of the 1.2 and 1.4 million dollar homes in other areas and a lot of them are still sitting unsold.

  18. rentingsucks

    “What is that – around 4 months of inventory? Does anyone know how this market reacts to 4 months supply?”

    Don’t forget that is 4 months of inventory at current rate of sales. If sales slow it could be even higher. A balanced market is about 7 months of inventory.

  19. Paulb

    A very experienced RE professional I know has watched the Van RE cycles for 30 years. He believes that up to 4 MOI prices climb, 4-9 MOI prices sit flat (kind of broad I know) 9+ were gonna start coming down.

  20. jim

    coco: A million is entry level for an SFH on the westside. I would expect it to fall to about 700k by 2009 if we track previous corrective cycles. If not I expect an older single family home on a 33 foot lot on the West side to sell for $11 million dollars in todays dollars by 2022

  21. Ryan

    My prediction is 13,000 listings by June 9th.

    I am confident prices will not fall in the next 30 days

    Speaking of which, when does the bank meet to adjust rates next?

  22. awum

    I dunno, guys, 7 to 9 months inventory looks more “sellers market” than “balanced” to me. FVREB calls anything less than 18% of inventory sold in a month (or over 5.5 MOI) a seller’s market.

    Plus, you can’t just look at MOI to figure what effect there will be on prices. You also have to look at where we are and where we came from.

    Rob emphasizes that people don’t have to sell, making prices sticky. I get that, especially if you bought very recently. On the other hand, consider the attraction of taking your profits when we have seen such an incredible and very recent run in prices. Who would quibble over a $30K drop here or there to make a sale, when you’ve “made” $300K in appreciation in the last two years — when the risk is not selling at all?

    I expect the downward pressure to be greater, quicker, after a bull run like this. It won’t take 9 months of inventory.

  23. awum

    …plus, note that it’s an increase in listings moreso than a drop in sales which is driving inventory at the moment. The potential weakness is more a supply issue than a demand one. You can expect competition among sellers to become pretty fierce.

  24. Domus

    “Rob emphasizes that people don’t have to sell, making prices sticky”

    Rob’s statement is correct over the short-term, i.e. for periods of up to 18 months.
    However, as time elapses, so do life events and the decision to sell tends to be forced upon people. Possible reasons for that are:
    – divorce (I think that more than one in three of all new marriages are ending up that way unfortunately);
    – downgrading due to retirement;
    – relocation (incidentally, there is a lot of talk in the US about people having to accept lower prices on their homes to take up jobs elsewhere);
    – sickness/family circumstances change;
    – upgraders: they may need to sell what they have to buy larger. However, if demand is limited for their units, they can either take a loss or decide to stay put (re: so-called plankton theory of the RE market. They need willing FTBs to give them cash for larger dwellings!)
    – death/inheritance: this will be a big thing for baby-boomers in the next few years. They often have SFH and are turning the other side of age 60: statistically, that’s when your mortality risk jumps. We are talking about a 1 in 20 probability of kicking the bucket at this age.

  25. Domus

    All the above reasons above are relevant even when you have a booming economy. If the economy slows down, then you can add repossessions, relocations due to job search, outflow of migration (by the way, check out the Sauder numbers on population growth in vancouver: BIG slowdown in the past year, we are well below the national average and at about 1/3 of the number in the mid 90s).

    So, Rob is only right for the short-term. After that, you are on your own…..

  26. Gadwin

    It takes time for prices to drop. Prices start dropping when inventory sits there long enough. If all your neighbors start dropping their price, you’d be a fool not to drop your price too.

    The market CANNOT escape supply and demand. If demand stays constant, but the supply continues to increase, there will be an inevitable effect on the price.

  27. aetakeo

    Looking at VHB’s graph, if we’re just roughly following last year, I think we’ll dip a bit by the end of May again.
    ‘Course, should this slowing market be the harbinger of bears, I’d imagine we won’t have last year’s relatively flat inventory numbers over the summer.

  28. Anonymous

    Bears, prices have to stop going up before they can go down…

  29. aetakeo

    Hm. That’s true, Anonymous, and so wise.

    A related observation I have made: the sun also must stop going up before it is afternoon.
    After many years, I am able to predict and plan for afternoons with surprising accuracy, and very often don’t use the sun to tell me when afternoon is coming. For a small fee, I am happy to share my wisdom with you. About the sun, and afternoon, that is.

    Real estate being rather more complex.

  30. WoW

    I think I deserve some kudos for my May 15th/12,000 pick – fyi.

    13,000 – June 15th

  31. Joshua

    “Real estate being rather more complex.”

    I would humbly put forth that real estate is hardly more complex than the multi-billion year old continuous movement of the celestial bodies… however, if you were to replace the word “complex” with “unpredictable”, then I might agree with you.

  32. -A-

    The old supply and demand argument just can’t be sold, when you have rising inventory, and slowing sales.

    This market is headed for the cliff.

    There may be ups and downs along the way, but the crash is inevitable because it has been mainly driven by an aberration. (and a lot of hype)

    You cannot have price appreciation as in a super heated booming economy and the super low interest rates as in a deflating and depressed economy indefinitely.

  33. jim

    I think prices can fall off a cliff. If the market was irrational and exuberant on the way up it can be irrational and despondant on the way down. Fundamentals had nothing to do with the run up, so how fundamentals support prices on the way down?

  34. millionpitfall

    Ryan,

    The Bank of Canada will set interest rates on the following days:
    May 29
    July 10
    Sept 5
    Oct 16
    Dec 4

  35. jim

    I predict 16,ooo by September. The inventory rate of accumulation is accelerating and prices are rising. Since prices will not fall until September inventory will now pile up rapidly.

  36. jim

    Whatever happened to Oracle of Vancity. Maybe Skeptic knows?

  37. aetakeo

    Ah. A philosopher. I appreciate your point, Joshua. Complex vis a vis prediction, indeed.

  38. millionpitfall

    Jim,

    Skeptic disappeared with the MLS data entry clerk that took Friday afternoon off.

  39. Domus

    How is the day shaping up? Paulb, give me a hint!

  40. Skeptic

    -A-: “when you have rising inventory, and slowing sales.”

    Rising inventory, yes that is true, slowing sales, I don’t think that is correct ? When are you comparing to ? Are you referring to last Friday ?

    millionpitfall: I can only wish

  41. Snick

    The one house that went over ist price in Port Coquitlam. I checked that one out.

    Quite nice. Very clean. Listed at 419,900 and sold for 427,000. Not a huge frenzy.

    Same house a few months ago would have been LISTED at 489,000

  42. Skeptic

    MLS V611548 listed $839k last Summer, taken off the market after 3 months. Back on market as V644328, listed at $799k. Sold in a week for $850.

  43. 240

    Skeptic – That’s a shame for the previous owner of V611548. Listed at $839K last summer (I’m assuming 1 year ago for arguments sake). Let’s say he could have gotten $825K (1.67% off list) at that time. In 1 year by holding that house, the owner made $25K for a rate of return of 3.0%.

  44. Snick

    So, who has THAT kind of money? Not most people.

    It’s in a class of its own and you know it.

  45. millionpitfall

    Houses that are on busier streets, in less desirable neighourhoods and that require a lot of renos are not selling at the same frantic pace they did last last spring. So more inventory does cause some lower prices, price reductions and some slower sales. Not overall price reductions yet though.

    Some signs of weakness here or there is certainly better than the smoking hot market where houses sold in a hour or two of being listed over asking price with multiple offers.

  46. 240

    Class of its own or not, the owner lost money on that house because of opportunity costs (easily could have gotten 5% in a GIC). I don’t think that particular example by skeptic supports a bull market.

  47. millionpitfall

    Don’t you find it interesting that Skeptic claims not to be a realtor, yet has access to sales information on a particular house with the particular MLS listing numbers? Hmmm….

  48. Skeptic

    Snick – You’re joking right ? Its probably close to average or a bit below for the neighbourhood.

    240 – we’re talking 8 months. Don’t you think that someone might have offered $825k in 3 months if they thought that was its value ? Probably worth close to $800k when it was originally listed in my opinion. Price was never dropped.

  49. 240

    Skeptic – Without access to further info one can only assume the highest offer that was presented and what the owner might have held out for at that point in time. Fair assumption on the 800K though as that’ll give you a return closer to the YoY benchmark.

  50. Snick

    “Snick – You’re joking right ? Its probably close to average or a bit below for the neighbourhood.”

    Like I said, MOST people do not have that kind of money.

    I’m sure some of the people who buy property at those prices are eating tuna casseroles night after night.

    I say, “Let them eat cake”.

  51. Snick

    “You’re joking right ?” -Skeptic

    No. You are. I can’t BELIEVE that anyone cannot see a major downturn on the horizon.

    You need to do some research, Skeptic, about past asset bubbles throughout history.

  52. Skeptic

    Thanks for the advice Snick. Why don’t you add some web links to your outbursts to try and convince others ?

  53. Domus

    Paulb, where are thou?

  54. Domus

    Rob,

    question for you: what would you consider a drop in sales? Would 160 sales average per day be considered lower than last year? Or 140 per day? Or should we think of sales as a share of new listing and assume higher new listings should be accompanied by higher sales? What’s the metric?

  55. Anonymous

    I got this advice yesterday when discussing the potential sale of my condo in Calgary. It was from my realtor after a few beers mind you: “Sell while you still can. You’ll never see the current price again in your lifetime after adjusting for inflation, or anywhere near it.” He’s a pal but I am wondering if he would turn around and then say:”If the “numbers work” you should buy it” to some prospect?

  56. jim

    sorry that anon 9:42 was me.

  57. Skeptic

    -A-

    May 1 – 14, 2006 – 1,921 sales
    May 1 – 14, 2007 – 2,023 sales
    (someone please check my math)

    Hottest May ever so far ?

  58. jim

    Skeptic: Yup, sales track listings. Higher listings =higher sales. as the sheeple pile on board.

  59. jim

    Oh and 1 more thing.
    Millionpitfall: Skeptic is not a realtor, as I have yet to meet a realtor who is not proud of their profession. He would admit it readily.

  60. Skeptic

    Jim, I assume you are using the term ‘profession’ loosely

  61. As an accountant, I am not surprised about the recent boom of the housing market. Many my clients are making more money recent few years and some of them have invested in real estate. However, I do see a bigger financial gap between the riches and less fortunates…

    Young families are having a tough time these days to afford a home… even though they are making more money.

  62. robchipman

    Domus:

    That’s a pretty straightforward question. A drop in sales could occur 3 ways: an absolute drop (the reverse, for example, of what Skeptic so interestingly pointed out above), a percentage drop (to be fair, I think that if you compared last May to this May you’d see that), or both. We’ll see the third option when this market changes.

    There’s no new metric. Jim is sparring with Skeptic when he says sales track listings. He knows better. We’re in a cooler market than last year. Its still a hot market. If you want to sell for top dollar you have to work for it. If you want to find a good property you have to look like hell for it. Anyone who thinks this is a slow market hasn’t seen a slow market. And since a trend is a trend until it stops being a trend…

    Jim:

    I always say buy it if the numbers work. I also advise against selling just because the market is high. Still, if you’re a trader, why not follow your pal’s advice? And why would it be wrong for him to tell a trader, like you, to sell and then tell someone else to buy if the numbers work? The essence of real estate is win-win.

  63. robchipman

    Skeptic:

    I assume you’re going to go easy on the whole “profession” line anyway, right? Having a few miles under my hood I’ve been screwed by a variety of people, including “real” professionals, as I’m sure you’d use the term. somehow I suspect that if we get into a goat/sheep discussion of the professions I’m going to be the one coming out looking worse for wear, when you were the one they were originally going after.

    (Hey, upon reflection, you ARE a professional! 🙂 )

  64. Skeptic

    Hey Rob, no offence intended, that one was tongue in cheek. 😉

  65. "My handle has been deemed offensive"

    Too all those hallucinating that the real estate market is getting worst or the prices are falling …. keep dreaming cos the day will not come anytime soon yet. All the best to those on board for the ride of their lifetime.
    An advice …. if you can’t afford it, word harder and start saving …. and not keep calling for the numbers to go your way …. cos IT WON’T happen!

  66. jim

    skeptic: you are clearly out of line. Real Estate is a profession. You may have had bad luck with a realtor but don’t damn the whole profession. Ever had a bad doctor, lawyer,accountant,dentist. I have.
    Rob:
    Part of having the numbers work for me is anticipated appreciation or not.

  67. robchipman

    Jim:

    Capital appreciation is obviously part of any property evaluation. Tell me this: can the other parts be good enough to balance a poor short term appreciation outlook? (flipside: can a great ca outlook forgive other terrible numbers?) I think you’d have to answer “yes” – you can’t just pick favourite numbers and ignore others (except as a personal eccentricity, which is fair game).

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