The Bubble Has Burst!

The Bear’s Bubble, that is! 🙂  (Sorry, I couldn’t resist!)

There were 244 new listings today and 225 sales, for a sell/list of 92.21%. Of the sales 29,  or 12.89%, went over list.  10 of those were on the Westside. 3 were in East Van, 2 in Richmond, 3 in Pitt Meadows, 4 in North Van,  2 in Maple Ridge, 1 in Coquitlam, 2 in Burnaby and 2 in Surrey. 

Average list price of the sales was $515,831, while the average sales price was $506,002, a difference of $9,829, meaning the average sale went for 1.58% under list price. 21 properties went for list price. One property went for 12%($50,000) under list while the highest over list was also 11% ($62,000) over . 

There were 9 million dollar plus properties sold with 2 over $2 million. Average days on market to sale was 33.

There were 114 price changes, of which 12, or 10.53%, were increases. The average original list price of price changes was $622,674; the average new price was $604,420, a difference of $18,254, meaning the average price change was -2.39%.  Average days on market to price change was 45 days.

Inventory in my target area dropped to 11,994, while over 90s dropped to 1,875, or 15.63%..

0.85% of all active listings in my target area had their prices reduced today.  The 14 day rolling sell/list was 63.93%.

Advertisements

73 Comments

Filed under Daily Numbers

73 responses to “The Bubble Has Burst!

  1. Domus

    Hmmm, somehow I think you might be calling victory a but too soon, Rob…….sum up the listings for the past 6 days and then do the same for the sales……….how bullish is that?

    I think the real bubble is bursting already, and it’s not the bears’ bubble. But, as usual, this is my opinion.

  2. Domus

    VHB,

    so you got it quite right! You called the peak!

  3. Domus

    Now, for all those guys hoping to retire on RE speculation, here is a link I found a while ago document Vancouver’s population growth (in %) versus the average growth in the rest of Canadian cities:
    http://cuer.sauder.ubc.ca/cma/data/Population/population-pctgrowth-vancouver.pdf
    I am genuinely amused by Rob’s title tonight. But hey, it is your blog and I am grateful for the numbers. So enjoy the ride as you can…..

  4. Domus

    And here is what CMHC regional economist Carol Frketich said today (hear, hear, even them are acknowledging it now):

    “for the past few years, B.C. has been building new housing faster than its population growth warrants. And as employment growth slows, Frketich expects new housing construction to remain at a still relatively high 30,000 units per year over the next five years.”

  5. Domus

    So, supply exceeding population growth with a trend towards deterioration…..these bears must be crazy, though!

    Sorry for overposting Rob, this is the last (promised) for a while…..

  6. Reknab

    How does inventory drop from 12060 to 11990 when there were still more listings than sales?

  7. robchipman

    Reknab:

    Expiries.

    Domus:

    The smiley means its a joke. Not to be taken too seriously. Take a look at the tone of the past few days. Bordering on sheer jubilation for some bears, based on a few good days numbers.

  8. Reknab

    Is a rate of 100 expiries per day normal? Can this not be included in the stats as would be of benifit to be able to track this accurately would it not?

  9. Domus

    Rob,

    you must give it to the bears. They are a patient lot. What is a little jubilation after all?

    Seriously, what’s you take on the wild swings in supply we are observing? Sales are not very volatile, but listings are all over the place.

  10. socal investor

    Just got back from NYC yesterday. Tuesday’s paper said there y o y prices for condos are up 23%. Marin county in Norcal median price is over 1 million-first time for any county in CA and with San Fran prices up across the board. Went to DFW area 2 wks ago and a realtor said she laughs at the people trying to put low ball offers in. Vancouver’s on fire too. Large metro areas are proving to be riding out the storm regardless what side of the border theyre on, even here in the OC prices are holding up.

  11. Domus

    Socal investor,

    patience, patience. Prices will give in. The slower the process, the harder the hit. In fact, guys like you shoukd be happier for a fast adjustment: suffer now and be done with it. But if this turns into a prolonged stall, then the “Japanese nightmare” is not just a bears’ fantasy.

  12. first_time_buyer

    LOL. no wonder, the numbers showed up at 9:30 as against 12:30.

    The next 10 days hold the key. The sell/list ratio for first 12 days of May 2006 was 64.43% and for last 10 days it was 93.22%. Would like to see what this year brings.

  13. robchipman

    1st time:

    Here’s the real reason for early numbers: I wanted to watch Lost at 10:00 😉

  14. first_time_buyer

    ok rob, you are excused. why dont u watch “Lost” everyday or is it that you are “Lost” in adding spin to numbers 😉 or looking for some bald guy – with some vague theories for support 😉 – from a site visited by a bunch of realtors and mortgage brokers ;-).

  15. Home Depot’s stock could be used as an indicator of the whole housing market. HD seems to run out steam this year… I’m actually surprised the stock’s price is still pretty sticky…just like Vancouver’s house price 🙂

  16. mike

    Rob, you really don’t need to explain the joke. If people don’t get it, it’s really their issue… not yours.

    My one annoyance about this blog is that it’s waaaaay too defensive.

  17. Man, there’s a lot of liquidity out there. If I had to guess, the 2-earner professional couple have made the most difference in the sales numbers for Vancouver, and the extended family+renters have kept the market up in the Valley. In my area of work, where wages run from 70-100K+, the only people we’ve been able to recruit during the last few years are those coming as a couple to 2 new jobs. Singles and single high-wager-earner families won’t come no matter how great the winters are. In Mission, where i keep my weekend house (new subdiv, 4-5 bd houses, prices in the 400 range) the street looks like a used car dealers lot. Garages are full of “crap” and each house contains at least 2 familes or 3 generations of one, and 3-5 cars, most of which are forced onto the street. My point is that the pool of 2 big-earner famiies and people willing to live in a collective have increased, and this trend is keeping the market going. And I don’t see any signs of a slowdown yet…except in Domus’s migration chart.
    Not holding my breath to buy in Vancouver yet, anyway.

  18. jim

    So the boom lasted what, 6 years, and the correction lasted 3 days? Sounds about right Rob. I guess the next plateau will come in 2017.

  19. Ken G

    I dont know why people live and die on each days ratio. Lets keep track of the trends here. The US is a mess and its only going to get worse, if you dont believe that you are not looking at reality. Vancouver will cool off as well, its just how much will it cool. I think this will have alot to do with the economy and interest rate hikes. Lets see what inflation does at the end of the month. The inventory is clearly rising not falling no matter what yesterdays numbers were.

  20. millionpitfall

    The list/sell is swinging back and forth. This is usually a sign of a adjusting market. Where it is adjusting to is too hard to tell yet.

    I don’t think one day of heavier sales means the bull market is back on, nor do I think a week of bear sales that a correction is underway.

  21. Ken G

    Hey you want a housing crash? Easy vote NDP in the next election and you are going to see one!

  22. millionpitfall

    Last year listings cooled off before May long weekend and picked shortly after. Will it do the same this year?

  23. jim

    What’s happening now is called an inflexion point.
    The great economy/business/jobs killer is stagflation;prices rising while demand abates. We may approach that in the housing market if prices continue to rise along with rising inventory. If inventory falls back to say, 9000 or less then the housing market could experience a soft landing. If prices rise a further 10 per cent this year andinventory hits 16000 by September I would look for a steep and rapid pull back this fall carryed over into next spring and for several years there after. Time will tell…

  24. Priced Out

    Ken G – Thanks, finally an easy solution.

  25. /dev/null

    Inflation up in April:
    Core inflation strongest in four years

    “The biggest contributor to overall inflation increase was housing, particularly mortgage costs, which rose at the fastest pace in more than six years. The 5.6-per-cent mortgage cost hike was primarily driven by higher prices paid by consumers for homes.”

  26. tqn

    Rob,
    when i read the title, i thought that the 50% crash had come and i would be out in full force buying at 50% discount side by side with the bears!

  27. realitycheck

    great title Rob, The bears on this blog (which seems to be about everybody) crack me up. If the numbers are in their favor they are all jumping up and down about the bubble having burst. If the numbers aren’t in their favor they all say well one day doesn’t mean anything.

  28. Noname

    realitycheck said – “If the numbers are in their favor they are all jumping up and down about the bubble having burst. If the numbers aren’t in their favor they all say well one day doesn’t mean anything.”

    To be fair, the bulls behave in the exact same fashion.

    Noname

  29. Hypester

    Just got back from SO CA, maybe there are some 1 Mil houses selling, but rampant mortgage frauds and realtor complicities and flipper destructions are underway.Of course this would never happen at the West Coast of Canada !
    Have a look at the California meltdown.
    http://www.ocfliptrack.blogspot.com/

  30. Domus

    realitycheck,

    I don’t think that your description of most bears is correct. All we point out on day like yesterday is that there has been a trend towards a weaker market and it has been lasting a few weeks, if not months.
    It is possible that from today onwards that trend reverses (although frankly unlikely) but that does not mean I should take yesterday numbers as confirmation of a new bull run.

    To be honest the opposite is true: as soon as some number appears that lends some hope to the bulls there is a surge of bottled anger exploding on that side. To be quite clear: usually people describe the bears as being said and angry for missing the train. One would not come to that conclusion reading these comments: it seems to be that the bulls are the angry and frustrated ones, counting the days before the demise of this market.

    I have a theory about this: deep down even the biggest RE suffragette knows very well what is happening. They realize this market is on its last legs. But it is difficult to let go and accept the end of a period of almost free money and appreciation. The brightest ones take a low profile and start liquidating whatever RE excess they don’t need. The less bright scream and kick, and get angry with the rest of the world…….hanging on to the dream that the market will start going up any day soon.

  31. millionpitfall

    Not sure why a bull would not want a pull back in prices. If a bull has not over extended themselves financially, even bulls can buy more properties at cheaper prices in a bear market. But…then again if you put all your eggs in one basket, that is another story.

  32. lazy 1st time buyer.. with cold feet

    bubble burst? nice title. it may come back to bite you.

    could someone remind me why it is time to buy in vancouver again?

    all i see are arguments that the bull run is complete.. the “bears” are concise and have a point. could a “bull” break down, in more concrete terms, why its good for me to take the plunge.

    and if someone mentions the olympics one more time, i am seriously going to punch myself in the stomach. we will be lucky if feb. is not rainy and muggy in ’10 and even if it isn’t, i didn’t move to Lillehammer after witnessing its beauty did you?

  33. first_time_buyer

    my lazy alter ego, olympics olympics olympics (thats three punches in your stomach );-) . You better stop wathcing news, there are atleast 7 mentions of olympics. hehehehehe.

  34. robchipman

    Mike:
    My nature is probably to be waaaay more offensive, rather than defensive, but I’m trying to be a better person 😉
    I don’t think we’ll see a repeat of last May (weak sell/lists early, strong ones later). Just my opinion on that, but 1st, I don’t subscribe as heavily as somne to the rigidity of annual cycles (spring and fall high, summer and winter low), plus, I really think this year is different from last year.
    Domus:
    You should take a look at that Bank of Canada report on duration dependence. If nothing else it makes it clear that its very tough to predict the end of the upswing (although there is a lot of other gold there as well).
    1st Time:
    BawldGuy is smart. When will you see the light? 😉
    Inflation/stagflation? Daily numbers are fun, but I agreee that longer term trends and the whole inflation issue is much more important.
    Anyone notice that the mysterious East seems to be improving, RE-wise?

  35. lazy 1st time buyer.. with cold feet

    ha ha.. . nice one first_time_buyer. i quit the news long ago and only watch that cheesy real estate channel on novus. makes me feel luxurious..

  36. jim

    realitycheck:
    For example you just showed up on the heels of today’s bullish numbers. I’ll just move over so you can climb on the band wagon.

  37. CheapMan

    No worries, just watch today’s numbers.

  38. Domus

    CheapMan,

    are you Paulb in disguise?

  39. tqn

    how about setting up bull posting days on mon/wed/fri and bear posting days on tues/thurs/sat. that case, bears can wish for 50% crash and bulls can wish for a long lasting run! No more argument!

  40. smart

    Do the day to day numbers really matter?

    Does the inventory numbers really matter?

    No, if it is a bubble the real inventory pile up will happen after the bubble has bursts.

    As with all prior crashes, there will be people still paying too much until the 11th hour.

    This is the 9th perhaps 10th hour

  41. realitycheck

    It looks like I poked a few desperate and angry bears with a stick.

  42. jim

    realitycheck:
    Wow 2 posts in 1 day you must be really excited about your recent home purchase.

  43. Annon

    I find inflation in Canada is pretty bad. You can’t get a decent food court meal for $5. You need $7.5+. Gas/electricity are both high. Housing is high. Tax is high. But maybe Canadians in general are all making decent income and that no one seems to care about the rising prices. Even cell phone plans and TV subscriptions are expensive and yet Shaw/Bell/Telus are all making record profits. All and all, consumers are boldly spending. No wonder the housing price won’t drop and keeps going up.

  44. ryan

    here’s a good question. I don’t know if any of you would have access to this kind of data, but during the late 90’s RE doldrums, what were inventory and sales numbers like in the GVRD?

    I remember when we bought a house in ’99 we got it for around 25% off the previous sale price in ’96.

    If inventory back then was similar today but it was just the sales that were far lower then the bubble could burst anytime the buyers wake up and smell the coffee. If the inventory was at 19,000+ then you know that even if sales slow down we still have months to go before nominal prices fall. I think by December ’07 real (inflation adjusted) prices will already have fallen compared to today’s prices. comments?

  45. Gary Lau

    ryan,

    I think the primary difference is that there are better marketers out there this time around. you have builders, realtors, news papers, etc telling everyone the market will only go up, but what’s behind the scene can be completely different.

  46. Domus

    ryan,

    don’t expect price drops in the next months. Canada is in many ways a backwater for the US: what happens there in terms of economic cycles (RE, technology, you name it) is to a large extent mirrored in Canadian developments. Maybe it not one to one, but historically it is close to that.

    In the US we have sticky prices, with bagholders who are unwilling to recognize they were hardly done by. In an age of low interest rates and low unemployment, these people can resist reducing prices for longer. Of course the stalemate will eventually break and prices will start going down.

    I tried to illustrate this reasoning to reality_check earlier on: people owning RE should wish for price adjustments which are swift. Protracted declines will be far worse for them.
    However, I think we are still at the denial stage for them…..

  47. East Van

    Bobo said:

    “It looks like I poked a few desperate and angry bears with a stick.”

    Show a little class, or the bears will unleash the wrath of the tick tock guy on you

  48. Domus

    …..another category which should pray for flexible prices is realtors: the only way to avoid a collapse in transaction volumes is for price to adjust. They will have every incentives to put pressure on sellers to lower prices, when the moment arrives.

    it will be interesting to see realtors changing sides, fighting the corner of buyers to close a contract. I expect many will lose their jobs when volumes collapse, especially the once with no experience from past slowdowns.

    History repeating…..

  49. tqn: thats crazy talk! everyone knows the future of the market hinges on these arguments.

  50. $froma$ia

    Rob, that house on Venables…is it still for sale?

    You told me there was offers going in a month and a half ago and that if I liked it , that I should make an offer as well. So is it sold or were you just giving me the gears?

  51. Paulb

    Busy day…..today is another killer day for bulls!! ……..enjoy while it lasts

  52. millionpitfall

    Flipper panic? A few flippers in panic mode to get their houses listed in our neighbourhood. One reduced the price after the first week it didn’t sell. The other putting up the place for sale before all the renos were complete. Renos were sloppy and rushed. A pig with lipstick to say the least.

  53. cube

    Fraser Valley Real Estate board working late today to enter listings.

  54. Macchiato

    Entering listings … I find this process interesting. It seems like listings are dropped off at the Realty Boards and entered only at the board offices.

    Is this true? if so, why would this glaringly inefficient process be used? Why can’t a realtor enter their own listings and fax or send scanned copies of listing agreements?

    what am I missing?

  55. vanreal

    hey jim count em 3 posts in 1 day!! Speaking of tick tock where is tulipmania anyway. He seemed to have disappeared at the same time as vhb ended his blog. coincidence?

  56. jim

    East Van:”Show a little class, or the bears will unleash the wrath of the tick tock guy on you”.
    Ok THAT is the funniest post of 2007 . Kudos. I am not worthy. LOL. (means laughing out loud). 🙂

  57. Chinko

    Yo bears!

    Someday the market will go south. Sit tight and keep waiting. The day will come. Keep renting. haha!!!

  58. thomas

    what’s the point of being a bear if you don’t profit from it? you made no money on the way up, nothing to be made on the way down. do you think you’ll call the bottom and actually buy when the market turns? seems unlikely. true bears are investors, who actually take risk, versus people who just missed out on an investment, are upset, and hope and pray for a crash to feel better.

  59. Priced Out

    I’m not a bear or a bull really. Just a guy who wishes his hometown hadn’t been overrun by greedy speculators. I’ll buy when something I want is in my price range. That may take a while.

  60. thomas

    when the girl you’re with doesn’t meet your standards, maybe it’s time to lower your standards.

  61. Priced Out

    As long as renting is relatively cheap, I’m happy to rent and have a nice place to live. If I have to wait a few years to buy, so be it. I can save and have fun. Unlike my condo-owning buddy at work who is drowning in debt, is depressed all the time, and eats instant noodles for lunch.

  62. notwedordead

    thomas,

    I didn’t buy five years ago, I rent, and yes i get upset, but not from missing out. I’m upset by the revolting upswing in material excess over the last few years, fueled by the same cheap money that has helped drive up housing prices. I’m less upset, more deathly bored really, by real estate gains being the talked about at parties and around the water cooler. There is a weird sense of entitlement and an illusion of arrival with the middle class these days that feels dangerous. I don’t need to pray for a crash, a luschiously big juicy one is on it’s way all on its own.

  63. Priced Out

    Also I don’t have to lower my standards with regards to Women. I have the love of my life and she’s smart enough to agree with me about not buying for a while.

  64. M-

    Some of us bears did profit on the way up– I bought during the pause in 2004. Things seemed expensive, but not outrageous.

    Now prices have gone beyond outrageous, all the way to insane, and goshdarnit my wife and I want to *keep* the value gained by appreciation, so we’ve recently sold.

    Now we’ll wait until sanity has returned to the market.

  65. robchipman

    Moneyfromasia:

    Your memory is a little flawed. I told you that the property had to be sold in short order, not that there were offers on it. The deal didn’t come together (someone else bought the house that the Venables sale hinged on).

  66. Chinko

    Sanity? It’s here all these time. What were you waiting for M-? Trying to be a psychic? Keep predicting. See you here in three years time and still renting. Wish you luck. ; )

  67. $froma$ia

    “little flawed”, how dare you! LOL

    Yes, I must be flawed but I would still consider buying with you 😛

  68. bubbaloo

    I’m with you priced out. I’m not as interested in making a quick buck as I am in having a decent place to live. As a renter I can put money away every month and sleep peacefully at night. There is a downside to renting but what can you do? I didn’t line up for tickle me elmo and I won’t line up for a condo. This insanity will end eventually. It’s a fad.

  69. robchipman

    Seriously, money, the vendor needed a quick sale to proceed with another purchase. There was a short time frame within which you could make a good deal and allow him to proceed. It was a narrow window, but a real one.

  70. $froma$ia

    Wow, too bad. I didn’t clue in on the type of opportunity with a short windo timeframe you were trying to convey. The feeling I got is that it’s a good deal at asking price and if I don’t take it somebody else will. You gave me the feeling that is was a low asking price. When I see $489,000 and it’s a hot market, I begin to think theres not much bargaining room and value, therefore I feel not very interested.

  71. $froma$ia

    My end perception of what your trying to convey doesn’t necesarily mean it’s your efforts to mislead me. My wife says though that women are better comunicators then men though.

  72. robchipman

    You need to develop a relationship with a Realtor based on commitment and loyalty. You’ll get better communication. It really does start with you. The agent can help, but you really have to be the driver.

  73. $froma$ia

    I am responsive and receptive don’t forget you have my criteria and you get a commission in the end.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s