Tuesday Numbers

Short numbers tonight. Sorry, reno and hockey took priority 🙂

 There were 281 new listings and 190 sales for a sell/list of  67.62%.  Looks like the bulls stopped to smell some flowers.

 There were 95 price changes. 

Inventory hit 12,410 (VHB, where are you?) while over 90s rose to 2,216, or 17.86%.

The 14 day rolling sell/list was 71.30%.

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50 Comments

Filed under Daily Numbers

50 responses to “Tuesday Numbers

  1. el_bubb

    why flowers??? water! heat creates a mirage! bulls need water. the more bulls stop to drink watter the more bulls realize that it’s all a mirage.

    simple.

  2. Snick

    Or, some more of that kooky Koolaid.

  3. kfinancials

    I don’t think the market has turned yet. It will soon though. People still think Real Estate is the safest investment. Of course this is clearly wrong. Many of the investors who place 20% could not only lose their down payment, but could go into negative equity. Anyways, like one of the blogger states, tick-tock, tick-tock.

  4. Chinko

    Stay renting folks while I am laughing to the bank.

  5. General Zod

    …as the bank is laughing with you. Ode to compound interest working against you as the air begins it whine out of the bubble.

  6. Alsan

    The markets usually have their steepest curve before a correction. Remember NASDAQ index between September 1999 and March 2000?

    It moved from 3000 to 5000 (or a 66% gain) in just 6 months. Then it resulted in a correction.

  7. jesse

    “The markets usually have their steepest curve before a correction.”

    The housing market is not NASDAQ. The dynamics are very different owing to the relative opacity of current (not last month’s) pricing and longer time to complete transactions.

  8. John Glenn

    Interesting article that shows that the US decline is still in the early stages. Remember that with any bubble it always goes on longer then people expect. The same is true with corrections. The US has not gotten near the “Hopelessness” stage which will be the bottom.

    The US will get much worse and we will follow. Anyone who disagress is fooling themselves.

    U.S. Consumers & Housing
    The dynamics of consumer credit have
    changed dramatically over the past few years.
    New laws, improved technology, and new financial
    engineering products have changed
    the way consumers perceive the relative importance
    of the loans in their debt portfolio.
    The credit card companies have emerged as
    the clear winners. In 2004, the Bankruptcy
    Bill was passed wherein credit card lobbyists
    convinced legislators to alter the private
    terms of the loans they had with their cardholders,
    and make it much more difficult to
    write off credit card debt during bankruptcy
    proceedings. This reduction in risk to the
    card companies did not result in an accompanying
    reduction in the “price” of credit for
    credit card holders, with rates remaining at
    the 19%+ level. The invention of the “credit
    score” has further boosted the relevance of
    credit card debt to the consumer. The “credit
    score” is an overall creditworthiness rating
    between 330 and 830 using data from the 3
    main credit bureaus: Experian, Transunion,
    and Equifax. As we understand it, it’s calculated
    simply using the number of late payments
    and lateness of payment, not taking
    into consideration the relative “importance”
    of the items bought on credit. A late payment
    on your house is worth the same as a
    late payment on your cell phone. This scoring
    system may not be in line with the importance
    to the overall economy, which takes a
    bit more of a hit when consumers default on
    their mortgage, rather than on their loan from
    Visa to buy that movie ticket to “Die Hard
    7.”
    If you’re skeptical that this is the case, just
    look at a recent study by Experian. They
    show that borrowers with credit scores of
    620 or below are 30 days late more often with
    mortgage payments than with payments on
    bank-card debt. Priorities have changed for
    these late-comers to the housing market. Be-
    ing kicked out of their new homes and forced
    to move back to apartments and other rental
    units is less of a threat to these borrowers
    than to have their daily spending money cut
    off for the latest shoes, haircuts, and iPods.
    The American dream appears to be changing
    from owning your own land, to owning your
    own flat-screen television. Maintaining your
    “lifestyle” is now increasingly the key to happiness
    for many consumers.
    The result of this change in consumer mentality
    is simply that sub-prime (and probably
    higher-rated) loans are more risky than we
    ever thought before. Therefore, the effects
    to the economy in the long-run, through defaults,
    are potentially more damaging than
    most economists are predicting. The housing
    numbers announced this week have been
    dismal, and clearly show that the downward
    trend is solidly intact. Many market watchers
    had been hoping the traditionally-strong
    spring and summer housing season would reverse
    the negative trends developing, however,
    it appears just the opposite is occurring.
    As we noted the other day in the MIR, financials
    continue to underperform the overall
    market, and we think this is a clear sign that
    the insiders are slowly beginning to see the
    full size and scope of the coming credit picture…
    and it doesn’t look like a warm, cozy
    night by the hearth.
    Christie, Les. “Putting the card before the house.”
    CNNMoney.com June 25, 2007

  9. Domus

    Forbes magazine, yesterday’s issue:

    http://tinyurl.com/226o8w

    Title: “Don’t buy that house!”

  10. robchipman

    There you go. More facts. Moving to the suburbs might make you lonley. Better rent!

  11. Kun Elin Gus

    “Inventory hit 12,410 (VHB, where are you?) while over 90s rose to 2,216, or 17.86%.”

    Maybe VHB, might be hanging out with Satv.And you wouldn’t have any idea where Satv is do yah Rob?

  12. Domus

    Regarding the rezoning of Kits, here is an article from Price Tags, referring to a recent visit we received by Atlanta’s planners:

    “Vancouver’s strategy of density and transit is a stark contrast to the Atlanta region’s road-oriented sprawl.

    Atlanta mayor Shirley Franklin said walking around downtown Vancouver at all times of day told the story for her. On every street, she says the crowds were a mix of shoppers, tourists, students and workers – all walking.”

    Of course, unless building constraints are cancelled, it will be impossible to build density in central areas like Kits. What we would be left with is the Atlanta’s model……

  13. Paris Hilton

    Rob, will you please send me Aarons phone num?

    Also, why is our market falling apart , but Vancouver isn’t yet?

    http://www.dqnews.com/ZIPCAR.shtm

    And Falling it is in California, Is it because it doesn’t rain as much?

  14. $fromA$ia

    Lol Paris, better buy now or become a squeegy street bumb.

  15. deb

    Isn’t end of June kinda late to list? Do people really buy homes over the summer? That seems like a lot of listings?
    How about the coastal towns with the nice beaches. Do they do a lot of sales over the summer in your opinion?

  16. Skeptic

    Paris Hilton: “Also, why is our market falling apart , but Vancouver isn’t yet?

    http://www.dqnews.com/ZIPCAR.shtm

    And Falling it is in California, Is it because it doesn’t rain as much?”

    The weighted average of the numbers for California that you have linked to is a price increase of 1%. I guess we have different definitions of falling.

  17. -A-

    Skeptic/Aaron:
    “The weighted average of the numbers for California that you have linked to is a price increase of 1%. I guess we have different definitions of falling.”

    Even Paris wouldn’t buy that one. People don’t live in a weighted average priced home, some have taken a real haircut haven’t they?

  18. fish

    Skeptic- even if we accept your weighted average increase of 1%…that is less than inflation…which depending on who you believe is 2.2-3 +% a year

    So RE is now not keeping up with inflation.

    I suspect this is just the beginning of the debacle. There are :

    1) reset of ARMs with short rates 3-4% higher.Long rates 2-3% higher.
    2) Mortgage Cos are tightening ++
    3) Sub-prime is toast, so only well qualified buyers can get loans
    4) The drop in sales volume is affecting realtors and mortgage cos..capital one laid off 2,000+ today.

    This is just starting…

  19. Skeptic

    “some have taken a real haircut haven’t they?”

    Yes. And some people have made a bundle of cash too, haven’t they ?

    “So RE is now not keeping up with inflation.”

    Whatever, is that the best argument you can come up with ?

    I was merely interpreting the numbers in response to Paris Hilton’s comment that SoCal was falling. Some areas are, however on average, the market is still rising. Facts are hard to dispute.

    I’m not saying that SoCal won’t decline (on average), it probably will, however based on the figures in the link, it hasn’t yet.

  20. fish

    “Whatever, is that the best argument you can come up with ?”

    It is not an argument – it is a fact. California housing is dropping in real terms.

    In my opinion it will drop a lot further.

    Infaltion will probably continue up, but real estate will probably drop by double digits.

    that’s my opinion based on the analysis I have done. We will have to wait and see if it is right or not.

    We can argue all night, lets wait and see what the facts bring.

  21. socal investor

    Talked to a res appraiser today in Long Beach, he’s crazy busy. Talked to my trusted commercial appraiser on the phone last week trying to get him to do an appraisal on an apt building, he said dream on I’ve got 15 on the books and I want to go on vacation. The westside of LA is still going up according to who I’m talking to. Was in competion (yes competition) on an offer on an apt building in Compton (yes Compton-no rent control)You can’t go down any street in my OC city that there’s not a major renovation going on a home. Sorry guys, I’m still not worried, actually I’m getting excited!

  22. Johnnyrent

    Social Investor

    I’m certain that there will be excited home buyers on the Westside of Vancouver long after a correction in the Lower Mainland takes hold. Ultimately, however, and as history shows us, eventually even the hottest areas within a given area succumb to a correction, and in equal order of magnitude. It just takes the hotter areas with the higher priced properties a little longer. The wealthy aren’t any more inclined to catch falling knifes than the rank and file; they are just able to withstand deeper cuts.

  23. Snick

    Social Investor,

    We know how much you people “down there” ( in Ca., etc.) like to talk about yourselves. You ARE the centre of the unviverse and all that.

    But…we like to talk about Vancouver RE here, so there.

  24. Skeptic

    Socal investor, welcome to the blog, don’t worry about the bears, they’ve been singing the same song for years.

    Its good to hear its not all doom and gloom south of the border.

    Johnnyrent, can you present any actual data to back up your statement: “as history shows us, eventually even the hottest areas within a given area succumb to a correction, and in equal order of magnitude.”

  25. Skeptic

    Snick: “But…we like to talk about Vancouver RE here, so there.”

    Just because you don’t like what someone has to say, there’s no need to discourage them from the blog.

    If my memory serves me correctly, its been the bears who have consistently been pointing at SoCal and the US. Don’t complain when someone feeds it back to you.

  26. socal investor

    Hey, I respect what you guys have to say, otherwise I wouldn’t be reading. I own up there, so that’s why I have an interest in what you guys are saying. Don’t you appreciate some input from someone who’s in the trenches down here buying and selling real estate for my own portfolio rather than only hearing what you’re reading. Sorry if my comments are a little self-absorbed, but when I read comments when you clump all of CA going in the tank, you have it wrong, wrong, wrong.

  27. Snick

    I’m not. I just get tired of people “down there”
    who like to hijack everything. It’s always about “them”.

    Oh, and don’t worry…what he/she/it says is a crock. The Ca. market is heading for the dumper. Whether YOU or he/she/it want to believe it or not.

    Hmmm…, on second thought, I don’t really care what you think OR believe.

  28. Skeptic

    Snick, why do you bother to read and post if you don’t care ?

  29. Hey, aren’t socal investor and Paris Hilton the SAME PERSON? I smell a conspiracy. I mean, she just got out and socal and Paris post at nearly the SAME TIME! location location location!

  30. Domus

    I am with Fish and Snick about SoCal. I think time will be gallant and show that this time is not different than any other bubble before. It takes time. Patience, my friends, patience……

    Just one small thought: houses certainly provide a service (we live in them) but they are hardly productive capital in the same sense as machines that make medicines and computers, or general HoTech equipment. RE has just become a vehicle of speculation, but appreciation is hardly based on a “new value added” in housing: we are not being healthier, faster, more effective, better connected because of housing. The intrinsic value of the object is the same that has ever been…..just more proof that when sentiment turns, the slide will be long, maybe slow but certainly painful.

  31. Johnnyrent

    Skeptic

    VHB featured many an article citing statistics of past Vancouver corrections wherein the Westside fared no better in the final analysis than any other part of the Lower Mainland.

    Back to you. Do you have any statistics which show that significant run ups in Vancouver real estate prices have not been followed by a correction?

  32. Domus

    ….ah, and I forgot to mention, I am also very much in agreement with our long-term friend, Johnnyrent…..

  33. robchipman

    Johnny, I think it was the “equal order of magnitude” part that sounded…stretchy.

  34. Skeptic

    Johhnyrent, can you post a link to one article, if VHB posted many, surely you can locate one ?

    I never said that a correction isn’t coming, I just disagree with the timing and severity of it compared with a number of other posters here.

  35. jesse

    “we are not being healthier, faster, more effective, better connected because of housing.”

    Actually I would argue you are, by choosing a good neighborhood with good neighbors and good schools, indirectly increasing you and your childrens’ productivity and future wealth potential. That is partly why North Shore and Van West are so highly priced. But there are rentals in these neighborhoods too 😉

  36. tqn

    “But…we like to talk about Vancouver RE here, so there.”
    “I’m not. I just get tired of people “down there”
    who like to hijack everything. It’s always about “them”.
    Oh, and don’t worry…what he/she/it says is a crock. The Ca. market is heading for the dumper. Whether YOU or he/she/it want to believe it or not.
    Hmmm…, on second thought, I don’t really care what you think OR believe.”

    Everyday, I see endless links and information debate about the U.S and the California stuff…going down. Then, we had a cali. investor made comments about his investment and was told to shut up! And I was thinking that bears should have some class too??

    “Patience, my friends, patience……”
    It’s painfull to see the price is getting a way further and further!

  37. Domus

    Jesse,

    the same neighborhoods offered the same “services” 5 years ago, at much lower prices to buy.

    If you live in the North shore, the neighborhood has not changed and made you healthier and prettier in the past 5 years. The appreciation is in great part pure speculative activity. The fundamentals have not changed. Only income (marginally) has gone up, but prices have jumped more than that.

  38. Domus

    “It’s painfull to see the price is getting a way further and further!”

    This is why many people buy….because they get frustrated and they commit to enormous debts.

  39. robchipman

    Domus:

    Some fundamentals have clearly changed. Rents have started following prices up. I bumped on North Van rent $200 per month and had no market resistance. I just rented a 1 bedroom for $2,000, and I have East Van bachelors that I rent for $750.00.

    Fundamentals are contentious in any event. Supply of land is restricted in NVD. Homeowners have opposed developing green space, and as a result large lots with big trees are now in fixed supply. That will lead to further capital appreciation, and has been an obvious long term trend to many observers, but some will dismiss potential CA as a non-fundamental (although you yourself have expressed a requirement for it prior to investing).

    All markets are driven by fear and greed. I think that speculation is more closely equated with greed, and its easy to point an accusing finger at speculators. However, I think its fair to admit that most buyers aren’t speculating, and are probably motivated more by fear than by greed. (“many people buy….because they get frustrated and they commit to enormous debts” vs. “The appreciation is in great part pure speculative activity”).

  40. Johnnyrent

    Skeptic

    Alas, VHB is no more and his data is no longer posted. If you go here: http://langley-financial-planning.blogspot.com/ however, today this site has a chart of Westside Vancouver bungalow prices from the mid-seventies. You’ll see three run-ups followed by corrections. This is not precise however by my calculations Westside bungalows retreated 33, 30 and 18.5% respectively. I think this more or less coincides with degrees of correction for the Lower Mainland as a whole.

    As the chart clearly illustrates, the current run-up not only sets a precedent for degree, but also for duration (adding 2007 into the equation). This run-up is very long in the tooth and extreme in relative terms. This is why I believe a correction is imminent, although it will be a slow-moving train wreck rather than an implosion, and it will be severe.

  41. tqn

    “This is why many people buy….because they get frustrated and they commit to enormous debts.”

    and their debts will be retired after 25 years or less!

  42. Domus

    TQN,

    unlike the 70s, when inflation helped pay your debts, you are going to repay everything in very real terms until your 25th year of mortgage. There is more to life than housing repayments, i would like to tell young people. Renting does not mean being poor…..

  43. jesse

    “If you live in the North shore, the neighborhood has not changed and made you healthier and prettier in the past 5 years. The appreciation is in great part pure speculative activity.”

    I agree speculation plays a big part. Another thing that can affect prices is changing fundamentals in other areas. For example a different neighborhood has increase in crime or its school board makes huge financial gaffes. Families perceive (and FEAR) their quality of life and future earnings have gone down in these areas so will pay more for better neighborhood (in this case NVan). An economist would say they made a rational economic decision based upon what risks they see ahead by comparing viable alternatives and costs/benefits, right or wrong.

    I assume the “fundamentals” you speak of are current and future quality of life. And yes that probably hasn’t materially changed since last decade in the same proportion as price increases. Some recent market entrants are getting a worse deal than 5 years ago but they still think it’s worth it.

    People buying at current VanWest/NorthVan prices are speculating in part on future fundamentals. So maybe we are talking the same thing in a way.

  44. tqn

    “you are going to repay everything in very real terms until your 25th year of mortgage.”
    I assume your landlord giving you free rent (if you rent, of course).

    “Renting does not mean being poor…..”
    You said what you think. I dont recall, at least myself, ever said that. I, and my family members, were renters before becoming homeowners; and nothing wrong with renting. I do respect my tenants. Whatever lifestyle you are comfortable with, it’s your choice.

    “There is more to life than housing repayments”
    How do you know that homeowners making housing payments have less life? Probably, homeowners eat out less, because they invite their friends over their houses for more entertaining activities; or they just want to spend time cooking in their own kitchens, or work on their own backyard. What is your description about having more and less life?

  45. Domus

    tqn,

    I am sure you have an enjoyable fulfillling life. Good for you. Not that I am bothered.
    I am just saying: sometimes it is better to rent than to buy from a purely economic perspective. i believe now it is such time.I realize some people attach emotional value to owning: in this case I have not much to tell them…….but renting is, some times, the smart choice. It certainly would have been a smarter choice for many thousands in the US who are in foreclosure right now and could have bought something larger, better, cheaper if they had waited a bit longer.

  46. tqn

    “but renting is, some times, the smart choice.”
    again, noone is denying this. it is a no brainer.

    Socal Investor, your US is mentioned again.

  47. robchipman

    I think its worth noting that many of the foreclosures now happening in the States were sub-prime teaser rate mortgages with low or 0 down.

    Domus’ read is that those borrowers lost out and could have bought more later.

    Some I know would reflect that the borrowers actually lost next to nothing, and wouldn’t be able to qualify for a regular mortgage now.

    I do recall many stories about why US mortgage practices were so bad, and there was no shortage of no equity borrowers (including people on social assistance and illegal aliens). Some of those guys bought for less than rent. My understanding, based on information from people in the mortgage business, is that they have bad credit now, but no other financial loss.

  48. Domus

    Subprime borrowers with 0% down of course forego also agency costs (realtors), taxes, lawyers.

    In addition, they might still not qualify today: but if they did, they would probably be able to snap up comparable properties for lower prices in many places.

    If they had even a 5% downpayment, as in many cases, they lost that as well.

    One last thing: according to Bloomberg, Roubini and Calculated Risk there are growing signs that foreclosure are spreading to other types of mortgages called Alt-A. These are mostly self-certified mortgages, with at least some money down.

    Yes, my read is that thousands lost a bit more than just their credit records……

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