Tuesday’s Long Weekend Report

There were 290 new listings today and 176 sales, for a sell/list of 60.69%. Of the sales 34,  or 19.32%, went over list.  11 of those were on the Westside. 4 were in East Van, 4 in Richmond, 4 in Port Coquitlam,  4 in North Van, 1 in Pitt Meadows,  2 in Maple Ridge, 1 in Coquitlam, 2 in Burnaby and 1 in Surrey. 

Average list price of the sales was $551,616, while the average sales price was $544,206, a difference of $7,410, meaning the average sale went for 1.34% under list price.  15 properties went for list price. One property went for 18%($30,000) under list while the highest over list was 19% ($103,000) over .   A 2.2 million property went for 4.4% under, but that is $100,000.  Average days on market to sale was 31.  That number seems to be dropping.  

There were 10 million dollar plus properties sold with 2 over $2 million.  That means million dollar plus sales represent 5.68% of all sales.   If we take all million dollar plus sales out of the equation average price drops by about $75,000, and DOM drops to 30.

There were 91 price changes, of which 16, or 17.58%, were increases. The average original list price of price changes was $586,162; the average new price was $571,469, a difference of $14,693, meaning the average price change was -2.09%.  Average days on market to price change was 50 days.

Inventory in my target area rose to 12,148, while over 90s rose to 1,957, or 16.11%.

0.62% of all active listings in my target area had their prices reduced today.  The 14 day rolling sell/list was 64.42%.

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31 Comments

Filed under Daily Numbers

31 responses to “Tuesday’s Long Weekend Report

  1. jim

    Still good to be a seller, tough to be a buyer.

  2. first_time_buyer

    jim

    what made you make that comment. its may, and sell list is at 64%, what u want sell list to be? 24%? my impression is that the market has tilted towards buyers.

  3. Domus

    It’s always good to be the seller….you are the one who gets paid!

    Whether you are always paid what you expect is a different issue, especially when times are changing right now!

    I was quite curious about this weekend’s number: I had made my mind that if they came through strong and with loads of sales, then it would mean another strong warm season for RE. Now I am quite confident the market has turned: not even 300 sales on a 4 day weekend in May? Something is finally changing……

  4. robchipman

    Domus:

    Sales written this weekend won’t get reported immediately. Subject sales need the subjects removed (anywhere from a few days to two weeks). The new sales numbers, therefore, always lag. Listings, on the other, can be entered as soon as they get signed. No waiting period.

  5. Ken G

    The market has turned. Investors are gone. I have spoken to many that have money and currently own properties in Vancouver. They are the first to tell me I am crazy to buy anything right now and that this thing is going to take a dip. Rob, what do you hear out there?

    The rental market is just crazy right now. Everyone is renting. I am curious who is buying right now. What kind of folks are buying into this market?

  6. Snick

    “What kind of folks are buying into this market?” -Ken G

    Aren’t there supposed to be three types of people in the world?

    a. Thise who make it happen

    b. Those who watch it happen

    c. Those who say, “What happened?”

  7. jim

    first_time_buyer:

    A sell list ratio above 60% is a sellers market (I didn’t invent that btw-its industry norm). A sell list ratio 40 to 60% is a balanced market, a sell list ratio below 40% is a buyers market. You need the average sell list ratio below 40% for 6 to 8 weeks to call a definitive market turn. That’s all, interpreted another way, I mean the path of least resitance, if you are in the market now is selling.

  8. jim

    Snick:
    Aren’t there supposed to be three types of people in the world?

    a. Thise who make it happen
    b. Those who watch it happen
    c. Those who say, “What happened?”

    There’s alot of “c”s over their head in debt right now for example carrying a suicide mortgage, and banking on home appreciation surpassing inflation and their own fully loaded carrying costs. Is that what you mean?

  9. Johnnyrent

    Jim

    I don’t know enough about RE ratio norms to dispute your figures; they seem reasonable under normal circumstances. I don’t think we have normal circumstances however. I think that the market is being driven in largest measure by irrational exuberance.

    In any event, some quick, unscientific math. Let’s say that including the weekend, the market averages 150 listings per day and that the sell/list ratio averages 65%. This would increase total listings by 52 per day or 1,575 per month. Take away, say, 300 expiries and you net 1,275 additional listings per month. If these averages prevail for the balance of the year, we’d end up with over 20,000 listings, including those already tabulated. I could be wrong on my allowance for expiries on the other hand I could be overly conservative on listings averages.

    In my scenario, it may be that the ratio could still be cited as a buyer’s market in theory but I think with that number of total listings, and its effect on irrational exuberance, it would be anything but. I’ll double check, but I don’t think all of the US markets that have tanked or are tanking as we speak have sell/list ratios at or below 40%. What they have is an excess of unsold inventory and major shift in psychology.

  10. jim

    Johnnyrent:
    first_time_buyer commented on sell list ratio. That’s what I responded to. Taken in isolation sell/list ratio is not that useful. So I agree with you.
    MOM is probably needs to be considered. Along with total inventory for sale versus historic norms. Perhaps the most overlooked stat is the percentage of total home stock for sale. If there are 100,000 sfh in a given area it makes a difference wether 5000 are for sale or 25ooo are for sale. The biggest risk to a bull market is that current homeowners decide to cash out en masse. This is what happened in Pheonix for example last year. That swamped all the piddly ass stats which otherwise are market baramoters.

  11. e

    johnny: listings usually slow in fall when people wait for spring again. of course if people are all rushing for the exits, then they may just want to sell it fast.

  12. first_time_buyer

    Jim

    I never said that it has become a buyer’s market. I said a sell/list ratio in 60s means that market is turning towards buyers. Compare that with sell list ratio of 80% last year and you will get an idea, how strong the market was. Nobody expects the sell list to drop to 25% overnight. I only refuted that it is not a seller’s market anymore and it is tilting in favour of buyers.

    There are lots of novice investors out there in this sinking ship. They will be the last to look for life vests. Right now they are those who are contributing to half of those 60%s we see. Just imagine whats going to happen, when they start diving out with or without the life vests.

  13. robchipman

    1st time:

    You didn’t refute Jim’s observation. Saying that the current market is tilting towards a buyers market is like saying, in January, that winter is titling toward spring, with the clear difference that spring may well come sooner than a buyer’s market.

    It is a tough time to be a buyer on two counts: its hard to find good product at an attractive price and its unclear how long the current run up will continue. (For those who want to tell us the the crash is imminent, take a quick gander at my blog during 2006, and compare that with the gains in the market since then. The future is uncertain).

    You can claim that there will be lots of novice investors out there when the great reckoning occurs. I’d argue that its possible that the novices who have just entered the market may emerge unscathed and that the ones who pay the price haven’t entered the market yet. Can you say with confidence that I’m wrong? (Also, once more, why would the majority have to dive out of the market?)

  14. J. Cannibus

    Rob, I am sure when you see signs of a correction you will let us know.

    BTW, have you been buying lately?

  15. jim

    Rob: what I like is your “Chance the Gardener” moment (from the movie “Being There” with Peter Sellers).
    “Saying that the current market is tilting towards a buyers market is like saying, in January, that winter is titling toward spring”.
    Put another way Rob is saying a just a Spring follows Winter a buyer’s market follows a sellers market. “There will be new growth in the garden.:)
    We need to distinguish between a trend and and a state. We are trending towards a balanced market but are still in a sellers market. The trend is real but fragile and may yet reverse. My money is on a buyers market commencing in October and lasting about 6 years.

  16. whybuywhenucanrent

    It’s not going to be a buyers’ market until prices drop into “affordability.”

    It will stop being a sellers’ market when buyers stop buying.

    So what’s it called when the market is stagnant as heck, nobody is buying because they can’t afford to, and nobody is selling because they can’t stomach the loss or cough up the difference on negative equity properties?

    Seems like there could be a big patch of this stagnant range on the horizon–might only take a 10-20% price drop for sellers to get mighty uncomfortable, but a 30-50% price drop before it hits something resembling affordability.

    In any case,
    Whybuywhenucanrent

  17. jim

    whybuywhenucanrent:
    Why rent when you can buy?
    “It will stop being a sellers’ market when buyers stop buying.” or when alot more people decide to sell than there are willing buyers. Or when people learn that real estate is a consumable good for most people and not an “investment”. Or when affordability limits are reached in enough market strat to tipp pschology towards not buying. Or a million other reasons.

  18. robchipman

    If you bought a year ago, and bought for personal use, a 20% drop won’t bug you much. You’re not selling anyway.

    If you bought a year ago for investment, and the numbers worked for you…well, same thing.

    If you bought a year ago planning to flip, and prices drop 20%, you’re underwater. Unless you deep pockets you can’t sell.

    In other words, whybuywhenyoucanrent’s point is valid. Just because sellers can’t make double digit appreciation doesn’t mean it will be a buyer’s market if by “buyer’s market” you mean “affordable” (as it is usually described).

  19. e

    what a lot of people i have talked to have done was they have sold their properties when the market was in an established decline (recall the last cycles, prices dropped steadily for several years). they did this to protect/crystalize profits. then they bought back when they could buy back similar for x% below what they sold it for. this protects them from further downside.

    friend bought a house in early 90’s for 800 (cash), sold in mid 90’s for 1200. bought smaller condo for 300. invested the 900 at 15% (bull market) till 2000, lost 10% in 2000, and again in 2001, and put in money market for 2002 (scared). bought back similar house for 810k, in 2002.

    900k become 1.5M by 2002 (even after losses). bought back the similar house for 810k. that house worth 1300M now. his equity is 1300+700+300 = 2.3M

    whereas if he sat on the original house he would have been at 1.3M.

    not rocket science (he basically sold at a substantial plateau) basically took 1.5 housing cycles — a time which most people will live through. was it worth the gamble for him? yes. even if he was stuck with his condo, and prices still kept on going up, he would have enough from investments to buy back that similar house anyway. however, because of the cycles, he was able to capitalize, and now lives in a 1.3M house, with rental from his 300k condo (1200/mo after expenses), and pretty much guranteed income from his 700k “nestegg” — which is invested very conservatively in long term corp bonds with coupons of avg 6%. thats around 56k/yr. not bad for not working (and enough to support his family considering there are no mortgage payments to worry about).

    needless to say, he is pretty comfortably retired now. and no, he is not selling right now. he has accomplished his goal (retired at 38, and spending lots of time with his family).

  20. Anonymous

    I assume he was very financially savvy to accumulate 800k by age 23 (?), or it was a generous parental contribution!

  21. jim

    e; So your friend at the age of 24 had 800k cash and bought a house. Such a house would likely sell for $3million today or more.Now he’s a 38 year old retiree. Time to move to Florida buy shoes (preferably velcro) that match the belt (white of course) and complain about the governement FULL time.That’s an amazing story.

  22. Johnnyrent

    e – $800 Gs at 24. Lucky sperm? Lotto win? Dot Com windfall? Drug deal?

  23. $froma$ia

    Lol, no maybe he has a real brown nose and works at a message parlor.

  24. bearette

    drug dealer.

  25. News Flash

    e: I like your story.

    Another thing your freind could have done is bought four 800k houses with 25% down in the 1990’s. Held them until now, collected rent paying off the mortgage and he would have about 10 million in equity right now.

    He may not have had all the fun trading online during the dot com bubble, living in the small condo and moving around, but he would have 4 times the wealth.

  26. e

    jim: ~25 years old at the time. out of univ at 21. investment banker on the street for a few years. saved up 800k.

    NewsFlash: no, in the early 90’s those houses were 800k, went up to 1200, down to 800, back to 1300k.
    if he bought 4, he would be worth 4*500+800=2.8M. 600k mortgage at the prevailing 8% or so rates back then * 4 — no way he would have qualified. and at the time you could not rent a suburban mansion for that much either!

  27. Domus

    Rob,

    so how are those numbers shaping up?

  28. e

    NewsFlash: sorry, i forgot to give you the #’s.
    600k @ 8% = 4600/mo. rent at the time was 2k for such a house. ppty tax was around 6k/yr. 37,200/mo bleed per house. 4 houses = 150k bleed a year. he couldn’t afford that 🙂
    bleed for 12 years and there goes all the profits.

  29. sharma

    e: Was this during that asian meltdown? I still kickmyself back then for not selling! Would be nice to be retired. I’ve been working way too long.

    Timely you should mention. Today:

    “Stocks initially rose, lifting the Dow Jones industrials briefly above 13,600 for the first time, after the market got a fresh load of deal-related news that included a possible bidding battle over aluminum producer Alcan Inc. But the excitement waned after a media report that Greenspan expressed concern that China’s stock market — which has recently been hitting record highs — could eventually see a sharp decline.”

    Perhaps another asian meltdown? That would not be good for the global markets.

  30. News Flash

    e: your story gets better:

    In the 3 years out of University he made about 500k a year (plus since he saved that amount after taxes). Then he takes all his money after making so much from investments and puts it into a house only to sell a short time later to invest the money back again in equities except this time he can only get 15% so he goes back and buys a house again and retires. Very interesting story.

    BTW

    Check historical interest rates and rents. If there was that much negative cash flow in the 90’s with 25% down todays prices must be a bargain.

  31. e

    News Flash: i guess you are not familiar with investment banking (esp working in the US).

    and i am not mistaken on the rent figures. these were mansions at the time. the bungalows that were torn down were renting for $1k (today 1.5-1.6k) the similar mansions right now rent for 2.5-3k/mo. kind of like how a similarly valued west side $1.3M house rents for $2.5-3k/mo right now.

    i think the interest rate is not far from the truth. back then you were lucky to get prime+2.5%. (well, at least thats what i was paying).

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