Friday Numbers

Friday saw 322 new listings and 201 sales, for a 62.42% sell/list.   There were 74 price changes.  Inventory reached 12,078.  Over 90s dropped to 1,802, or 14.91%.  The Giants won in the 1st overtime and flood restoration guys are supposed start removing asbestos today in my office.

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69 Comments

Filed under Daily Numbers

69 responses to “Friday Numbers

  1. fishonhook

    How about a little more colour on those numbers Rob 🙂

    Average price etc.

    Thanks for what we get.

  2. fishonhook

    BTW- Rob my realtor friends tell me it is two markets. The upper end where the rich (from here, out east and oddshore) are fighting for properties.

    And then there is the rest. lower and middle, which are only moving if they are priced right.

    Lots of marginal investors with assignments watching their profits slowly erode.

    Any comments?

  3. e

    fishonhook. same thing here amongst my colleagues in the biz. lots of investors still buying downtown condos and renting them out right away (i.e. buy 1 bedroom in coal harbour, and asking $1800 for rent so it carries with 25% down). i.e. buying if it makes sense as rob has mentioned.

  4. jim

    fishonhook:
    Agree completely with the high end being a market unto itself. We are looking to buy under $1.5 on the westside. Every decent house is getting multiple offers, and going over asking. Same price range in West Van is very much slower.

  5. accountant88

    jim
    May 19th, 2007 at 10:27 am
    fishonhook:
    Agree completely with the high end being a market unto itself. We are looking to buy under $1.5 on the westside. Every decent house is getting multiple offers, and going over asking. Same price range in West Van is very much slower.

    Jim,
    Would this not imply that at some point, folks like yourself in the $1.5MM range will buy in West Van instead?

  6. Deedub

    Go Giants!

    🙂

  7. Domus

    Rob,

    thanks for the numbers.

    Did you know you had asbestos in your office? You can sue people for not disclosing that information, it has been done before. They are extremely toxic materials, even when isolated from the walls properly.

  8. newvan

    Will people actually pay $1800/month to rent a 600sqft 1 bedroom? Who?

    I’m renting a 3 bedroom 1200sqft unit in Coal Harbour for $1950, with the same marina, inlet and mountain view as “The Melville”.

  9. e

    newvan: not sure if it rented for 1800$, but thats how much they are asking 🙂

  10. thomas

    west van is much less popular that west side these days. think people want to be closer to an urban area, not so isolated. and that bridge is on its last legs.

  11. Concerto

    SFH rentals West Van are few and far between. Houses too expensive to fit a rental cash flow model. So most houses sold in West Van are for owner occupiers. Equals fewer sales as investers looking elsewhere.

  12. jim

    Concerto: That makes sense. We are currently renting our house from a “specuvestor”.
    accountant88; We are currently looking in Westvan as well, but thomas’s points are exactly our hesitation. It feels a bit too “stepford wife-ish” up there.

  13. Paulb

    Consider N Van Jim. The Cap highlands, Edgemont area is beautiful and you $’rs go a bit further than in West Van.

  14. jim

    Paulb: Checked out N Van at length, and decided it was too dark, too damp. However, whatever we buy has to have a reasonable chance of not plummeting in value over the next 5 to 7 years and that is starting to eliminate Van West. I do ascribe to the theory that if prices go up 5 to 10 % per year for a couple more years(unlikely) then we could stomach a 20% drop. But based on global liquidity starting to tighten,and what’s happening in the US of A, would bet on a bigger,sooner,steeper drop.

  15. millionpitfall

    New Translink board wants to raise property taxes 3% next year to keep up with inflation.

    http://tinyurl.com/2tyqw2

  16. chip

    Something to note about the prospects for West Van.

    Several elementary schools there have experienced a sudden rise in applicants, to the extent that my son’s school now has over a hundred kids on the waiting list.

    This is a sharp reversal from the past — in which the district was planning to close schools — and at odds with most other areas of the city as well, which are still looking to close schools.

    It is my personal experience that housing demand in West Van is less dependent on speculative factors than, say, the Westside, and more in tune with fundamental factors such as demand for good schools, safe neighbourhoods, proximity to the outdoors etc.

    Less speculative activity and more fundamentals may mean West Van’s not keeping pace with the Westside during the tail-end of this boom, but it will probably mean there’s more of a cushion when the market does correct.

  17. millionpitfall

    B.C. Economic Outlook – April 2007

    http://tinyurl.com/2e5qgt

  18. millionpitfall

    In case you missed this headline recently:

    “Employment in British Columbia declined by an estimated 16,000 in April, all in the part-time category, bringing that province’s jobless rate up to 4.4 per cent.”

    What happened to month after month job growth and ever increasing employment in our booming economy?

  19. vanreal

    millionpitfall, Was that article on BC economic outlook your idea of bad news?

  20. VHB

    I put very little weight on month-to-month fluctuations in the Labour Force Survey at the provincial level. The sample size is simply not big enough to distinguish such fine variations from basic sampling noise.

    If the trend continues for another couple months then we have something.

  21. millionpitfall

    vanreal,

    No, I don’t think that is bad news, but certainly a little different tone than past “good news” reports.

    VHB,

    I like spotting new information, if it becomes a trend then your prepared.

  22. jim

    VHB(Camelion Muir) I agree, and further, the jobs lost are not in the home buyer demographic.

  23. VHB

    How did you know my name was Camelion! 😉

  24. Cameleopard, maybe. (sort of like bearbull). 😉

  25. homestyle

    newvan :: I’m renting a 3 bedroom 1200sqft unit in Coal Harbour for $1950, with the same marina, inlet and mountain view as “The Melville”.

    Bet you’ve been in there a while. Market price today would be more like $2950.

  26. Skeptic

    Yup, at least $2,500 in one of the newer buildings.

  27. newvan

    Homestyle — Moved in last August. 10 year old building.

  28. e

    there are some 2 br in melville (brand new), 1800, 2100, 2200. not too bad.

  29. Domus

    I think this summer there will be a major shock for landlords. If construction comes through before August we might see some relief in rental prices. Cash flow negative for many?

  30. millionpitfall

    Here is a breakdown of where job losses occurred:

    http://tinyurl.com/yq4o5x

    Food service industry jobs would be in the home buying demographic. If people are tapped out financially with high mortgage payments, the first thing they usually do is cut down or eliminate eating out to save money.

  31. thomas

    we were originally going to look at west van, but had a couple of friends tell us to reconsider. we have kids, and they told us it’s not really a good community to raise kids, compared to the west side. west side is a bit more intellectual and refined, versus west van which tends towards more superficial. but to each his own.

  32. Anonymous

    Seriously WestVan and Vancouver Westside labour under the same challange. Real estate makes no sense financially right now because it doesn’t make financial sense for investors. Left to just buyers to buy to live in these homes, you can’t justify the current market prices based on average incomes. The math doesn’t work.

  33. thomas

    it’s not the average incomes that are buying these houses.

  34. homestyle

    newvan: “Homestyle — Moved in last August. 10 year old building.”

    I stand corrected. You got a deal. Was it advertised?

  35. Anne

    about the lower end not moving…I have watched Mount Pleasant condos for a couple of years now. To my eyes the market has changed quite a bit this Spring. Most everything sits and sits unless it is very well priced. There are many stupidly overpriced listings and (finally) buyers are seeing it and backing away.

  36. Domus

    Hi Rob,

    back yet from the weekend break? Any hints on how this long-weekend went RE-wise? Paulb?

    Missing data, I guess…..it all gets a bit stale when data dry up.

  37. robchipman

    Its a long weekend, D., and the board is closed today. No numbers. Open house held by one of my agents was slow.

  38. tqn

    “stupidly over-priced listings” never sell in any market, I guess.

  39. Peter

    Interesting article over Vancouver forum that spell out the downside of a real estate boom.

    http://tinyurl.com/2rytqd

  40. millionpitfall

    Peter,

    I think what will happen is an affordability squeeze that will spill over into other areas of the economy. As home prices go up, property taxes go up, translink taxes go up, utilities go up, cost of food goes up, gasoline goes up, etc. People will start cutting down on their spending in other areas, eating out, renovating, etc.

    Since wages are not increasing at the rate everything else is and increasing prices are cutting into disposable income, a lack of disposable income will eventually can have an effect on peoples jobs and so on. You can only slice the pie into so many pieces before something will start to crumble sooner or later.

  41. tqn

    “As home prices go up, property taxes go up”
    the increase in home prices does not necessary mean that property tax will go up accordingly.

  42. jim

    The cpi has doubled recently. The biggest consumers are home owners so they feel the pinch first. The consensus is rates are heading up on top of Friday’s quarter point rise in mortgage rates. So rising home inventory, rising home prices,rising interest rates, Canadian dollar rising. What’s it all mean for home debtors-sorry, home owners? In the words(paraphrased) of Mr. T. “It means pain fool!”.

  43. robchipman

    Peter:

    Lasttime I renewed a mortgage (in fact, every time I’ve renewed) nobody has checked the value of the property.

    Banks don’t want to foreclose. They want to receive payments. In the scenario you link to the mortgage has been granted and the bank ahs the option of continuing to receive payments from the borrower or foreclosing and taking a large loss.

    Is it a realistic scenario, or is it scare-mongering? You tell me. (Take note, I’m not saying prices can’t recede; I’m saying the banks won’t foreclose on you as easily as the linked post suggests).

  44. first_time_buyer

    i agree with rob. I dont think banks would want to foreclose and sell the property for 400K as long as they are getting paid on the loan of 540K. The problem is for those who are not able to support the 540K mortgage. However, with so many real estate connected jobs vanishing, I wonder how many here will be able to afford 540K payments. IMO, even if 5% of recent homeowners are not able to afford, it can have devastating affect.

  45. Barney

    Living on Commercial, I got chatting to someone who lived there through the last major correction (far bigger than anything that we will see again for quite a while) – he told of his sister who bought a place that lost about 40 – 50% of it’s value in a year and the bank actually called in it’s loan (the mortgage) asking for the difference to be repaid. This was done with a number of people and the phenomenom of people “handing in their keys” to the bank and just walking away was not unusual – do other people have experience of this time too?

  46. Domus

    Rob:

    quick question for you. Will tonight’s numbers cover all the sales occurred on the long weekend?

  47. Annon

    If you lost $200k on your $600k house, it must mean the market is really bad. Instead of paying a $540k ($600k – 10% down) mortgage on a $400k house, you can let your bank have that $400k house and buy a new $400k house yourself. You would then just pay a $400k mortgage for a $400k house. So yeah, of course the banks would desperately want you to keep paying especially when the market is really bad. This happened in Japan. Bank loan managers went to mortgage customers and begged them to just keep paying even if the payment is just a fraction of the monthly amount. How fast can one save up $140k? In 2 years, 6 years, or 10 years? Banks have always been good in passing on the risks to others. When the time is bad, why shouldn’t the banks share the risks as well? Why should the banks be protected so that they are always the winners?

  48. millionpitfall

    tqn,

    You misunderstood what I was trying to say. I was talking about price rising in general from home prices to property taxes. I was not relating higher home prices to higher property taxes.

  49. first_time_buyer

    “you can let your bank have that $400k house and buy a new $400k house yourself”

    that is one smart move.

    and who would you get to finance your 400K? the same bank I guess.

  50. Millionpitfall

    Some people have been using their homes as ATM’s, taking second mortgages, etc. It would depend on your personal financial scenerio what a bank would or would not do. This could be higher interest rates upon your mortgage renewal, etc. Everything really depends on what kind of credit risk you are and your debt ratio.

    For instance, friends of mine decided to renovate their home. Maxed out the credit cards and were not in the greatest financial situation to pay off the credit cards when the renovations were completed. Shortly after their mortgage came up for renewal and the bank socked it to them with a higher interest rate. They were hard pressed to find a lower interest rate, this was all due to their credit card debt.

  51. Annon

    “and who would you get to finance your 400K? the same bank I guess.”

    If people today can somehow find help in getting deposit and such from family, friends, and whoever, they will most certainly be able find a way to give up the old house and get another house financed. Banks, 1st time home buyers, speculators …. the market will work out just fine.

  52. Chilli con Carne

    It’s true; banks won’t foreclose unless the borrower forces them to do so.

    Why would banks/lenders foreclose and take the loss?

    They would rather the borrower pay for an asset that is worth less than is owed to the lender.
    Which brings us to the topic of foreclosures in the USA.

    The subprime lending is not the cause of the housing slump, or the record foreclosures, but rather the result of the housing bubble bursting.

    If the bubble had not burst, the “home debtors” could simply finance or sell.

    Just a preview of things to come.

    PS Rob, don’t remove this post because you think Chilli con Carne is not my real name.

  53. jim

    In Canada, you do NOT want to get foreclosed on. You would be unlikely to get a home loan for decades thereafter. And Banks do NOT want to foreclose because, partcularly in the coming down trending market, they have difficulty recouping even the face value of sub 25% down mortgages.
    Chilli con Carne:”The subprime lending is not the cause of the housing slump, or the record foreclosures, but rather the result of the housing bubble bursting”-that is true and overlooked. The cause of the US meltdown was/is buyer exhaustion at the limits of affordability. The US decline vs Canada’s decline(to come) is not cause and effect. Rather it is a similar set of variables and attititudes with a lag time built in because the US is the dominant North American economy and cultural lead.

  54. Peter

    I guess what I want to see is a moderate real estate price which is sustainable. By sustainable, I mean families with decent incomes can afford decent places and with enough money to spend on things like vacations, toys, cars, etc… Real estate is just part of the economy. It is better for everyone if the pie is split more evenly.

    I really hate to see that the whole economy is dead with people paying for huge mortgages and are not able to spend money on other things in life.

  55. millionpitfall

    I think the words your looking for is “being married to your house”

  56. el_bubb

    Peter:

    Good point, it’s almost like the whole city?province?country? placed majority of its eggs into one basket, which isn’t a perfect investment portfolio.

    buy our stocks! we are different! our stocks always go up!

  57. jim

    Paul: yes.
    I know at least 4 couples that have not taken a vacation(away) in several years. All homeowners (home debtors),yet all “can’t afford it”.

  58. Domus

    NWS

    NUMBERS WITHDRAWAL SYNDROME

    Can someone help. How are listings and sales going?

    Eagerly waiting tonight’s instalment.

  59. millionpitfall

    Domus,

    You may need a twelve step program. According to my crystal ball, the listings will be high and the sales in the fifty something percentage range.

  60. Snick

    “Living on Commercial, I got chatting to someone who lived there through the last major correction (far bigger than anything that we will see again for quite a while) ” -Barney

    I don’t “get” the last part of your statement, Barney.

    I think we’ll see a downturn UGLIER than 1981-82.

  61. millionpitfall

    Jim,

    I know several couples in the same circumstances. They rarely eat out, don’t take vacations, buy very little for themselves, etc. These are professionals with good paying jobs, but have overextended themselves financially because they had to buy a house.

  62. vanreal

    The sky is falling. The sky is falling. Millionpitfall maybe your name should be chicken little.

  63. jim

    millionpitfall: It seems to be considered almost noble now to sacrifice everything to get on the property ladder. I have also noticed couples with the attitude: “its ok to splurge on the house;new kitchens,bathrooms.roofs, etc. Its as though this is not consumption because its “adding value”, or creating equity” or “we’ll more than recoup when we sell”. In truth my experience is to renovate for lifestyle or rental needs, and “stage” for resale.

  64. Priced Out

    I blame those real estate porn shows. They will soon be so last year.

  65. thomas

    I have to say, I have a steam shower, and man, is it worth it. Not sure there’s any resale value from it, but I could care less.

  66. robchipman

    Jim and Thomas are right. Renos pay off (generally), if you sell while they’re still new. The longer you enjoy them the less value they have on the open market. You have to get your value from them through enjoyment (which is why you buy a personal residence anyway, right? You make the money with the investments).

    I’m reno-ing my house, and while its fun to say “Hey, it’ll be worth a bazillion when we’re done” the truth is that we aren’t going anywhere for a long time. When we finally sell the custom built ins will probably look somewhere between “cute” and “quaint”, sort of like the built in transistor radio/intercom systems you see in some super hip kitchens left over from the 60s.

    Staging can pay off in a competitive market, and renos can pay in a hot market as well (although they don’t always). I’m not sure that they pay as well in a down market – deferred maintenance can be a freind 2 ways – you don’t spend the money in the beginning, and you don’t recapture depreciation on sale (yes, this is, despite the best efforts of many, a real estate investment blog, so tax treatment does matter ;-).

  67. tqn

    “I know several couples in the same circumstances. They rarely eat out, don’t take vacations, buy very little for themselves, etc. These are professionals with good paying jobs, but have overextended themselves financially because they had to buy a house”

    everyone’s enjoyment is different. you might enjoy buying stuff, taking vacation, eating out while others dont enjoy the same stuff as you do; but they do enjoy their own nests, cooking in their own kitchens, watching the kids playing in their own backyard…I dont see anything wrong with that cuz it’s a matter of personal taste.
    The wrong thing here is that “I have the right to live in this Vancouver city, to own a house and a fancy car, to take vacation, to eat out, to buy lot of stuff”…Yeah right, get real!

  68. realitycheck

    tqn,

    Finally someone who makes sense. You are so right! Maybe a person who buys a house doesn’t care that he can’t afford to eat out anymore but takes pleasure in his house and his yard. I know I do even though I can afford to eat out. Also this sense of entitlement drives me crazy. Maybe Vancouver city has reached the point where only the upper middle class and wealthy can purchase a single family house and the rest need to be content with condos. I would like to be able to buy a condo in Manhattan but I know I never will. That is life!!

  69. newvan

    Homestyle: “I stand corrected. You got a deal. Was it advertised?”

    Yep. My wife picked it off of craigslist. We’ve seen a few similar units near the same price point since then.

    More recent rentals have been advertised here (with their going rates): http://www.castlemanagement.ca/

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