Wednesday Numbers

There were 188 new listings Wednesday and 217 sales, for a sell/list of 115.43%. Of the sales 33, or 15.21%, went over list. 

Average list price of the sales was $565,581: average sales price was $560,807, a difference of $4,775, meaning the average sale went for 1.18% under list price.  Average days on market to sale was 31.

There were 69 price changes, of which 8, or 11.59%, were increases. The average original list price of price changes was $650,593; the average new price was $630,035, a difference of $20,558, meaning the average price change was -1.51%.

Inventory in my target area dropped to 11,344, while over 90s also dropped, reaching 2,068, a percentage of 18.23%.

0.54% of all active listings in my target area had their prices reduced Wednesday.



Filed under Daily Numbers

19 responses to “Wednesday Numbers

  1. robchipman


    I’ll move your post to the thread you were commenting on.

  2. The unthinkable"Renter"

    So Rob, what is your take on what is happening with the mixed bear and bull days?

    There is an expected rate hike in Sept. and we’ve had one in July.

    I am wondering, with the bank’s constant rate increases becomming a trend, when will the market prices begin to slide to realistic sustainability?

  3. The unthinkable"Renter"

    My idea of realistic sustainability would be around -10% to -15% price declines with current lending pruducts such as recently inro’d 40 year ammortizations etc.

  4. John

    The unthinkable”Renter”:

    A 40 year mortgage is insane. I can’t imagine anyone wanting to wait till 2047 to have the house they bought today fully paid off. Whoever is going for this product and can’t afford what they want at 25 years might want to consider lowering their expectations for what they want in a home.

    As for a drop in prices, prices won’t be that much different at a 10% reduction when you account for the recent and likely coming rate hike.

    You could get a 5 year rate just above 5% in April 2007. The banks have raised their rates during the last little while more than the quarter point that the BOC raised. Today you’re looking at 5.79%, another rate hike can take that to over 6%.

    $100,000 at 5.1% is $587/month.
    $90,000 at 6.05% is $579/month.

    $8 on every $100,000 isn’t really a “Wow, the rising rates dropped those prices, good thing I held out!”.

    If rates continue going up, the market is going to have to drop a lot more than 10%-15% for it to make a difference to a buyers wallet, and also what they can be pre-approved for. The buyer who was pre-approved for $100,000 yesterday might only be able to be pre-approved for $90,000 tomorrow.

  5. Ringo

    My husband and I just bought a house in Van. A longer amortization period isn’t always about affordability. We can comfortably afford larger mortgage payments (and have this set up), but wanted the longer amortization period ‘just in case’. With a large mortgage, its prudent to plan for a possible downturn.

  6. macchiato

    Ringo … so it doesn’t really matter that the interest you pay is absolutely ridiculous?

    My friend recently said he needs a more expensive place, since his mortgage isn’t big enough, they have money at the end of the month they just spend. Of course, plunking down that leftover on the mortgage or shortening its lifespan does not compute.

  7. coco


    Strange example, no one in this city has a 100k mortgage if they bought more recently. Try 250k – 500k .

  8. Coq_Mike


    I think Ringo’s amortization period is a fall back position just in case they lose income or rates go up. They are probably fast tracking the loan (paying extra payments) at this time.

  9. The unthinkable"Renter"

    Thanks John for the heads up 🙂 Whats your opinion on the market over winter to summer 2008?

  10. ADWeaver

    $8 on every $100,000 isn’t really a “Wow, the rising rates dropped those prices, good thing I held out!”.

    I don’t think this theory holds when you consider the entire 25 year amortization period.

  11. Skeptic

    There’s a story in the globe about how the strike is slowing down builders due to lack of inspection services. Wonder what sort of impact it will have on completions.

  12. robchipman


    I wouldn’t call these mixed bull and bear days, to begin with, because I think we should look at weeks, not days. As I see it, lots of sales leads to pressure to list. An agent who has a buyer but no listings has a pretty good sales pitch for a prospective seller. A good lister who knows some agents who have buyers but no listings has an even better story. That’s why we see heavy Monday numbers. Then those listings get sold. Its a strong market self-fulfilling prophecy. Looking at one day in isolation and comparing it to another doesn’t illuminate the scene, but looking at several days (or weeks) does a better job.

    My idea of realistic sustainability is properties that cash flow with 25%-45% down, and rent multipliers of less than 175. Right now that measn I need to get between $1,700 and $2500/month for an East Van beater (low rates/higher downs make higher rent multipliers possible, and vice versa). Rents are moving in that direction, but they have a ways to go. Would a 15% drop in value work? $500,000 becomes $425,000, which makes the rents needed range from $1460-$1900. Rent multipliers are way out, mind you.


    I don’t see a lot of 40 year mortgages, but from what I do see its the flexibility that appeals. You can amortize over 40, but up payments so that you drop the am. Suffer an income loss, or see rates rise, and you drop to your original rate. Or, qualify on a 40 year basis, and if values climb over the year, remortgage at the same income but with less exposure, and get the 25 year am. next year.

    In terms of how much interest you’re paying, over how long, I really think the simple calculation of totalling it up isn’t the whole story. If the rate is good, then the money is cheap – sign up for more debt if you can use it to make more money (simple theory, right, as in “simple, not easy”). If the rate is high, the money is more expensive, so borrow less or pay off faster (don’t pay off the investment property quickly, but do accelerate the principal residence mortgage and get rid of it in 15 years).


    If rates go up and I pay $8/1000 extra today, on a 40 year amortization, and our dual economy (strong west, sluggish Ontario) continues, September’s rate hike may be the last for a while. We might see some pressure taken off, and a dropping dollar (then again, if commodities keep flying outta here…) By next year my $250,000 East Van 1 bedroom may be $275,000. I go from the 40 yr. am to $206,000 on a 25 yr. I’ve paid an extra $16/month, but it gave me the opportunity to own for not much more than renting, and I’ve made a lot of headway. If things go south and I don’t get the 10% increase, I stick with the extra $16/month and do without 8 lattes. In other words, provided I’m ok with staying in my unit, the downside isn’t altogether scary, and the upside can be attractive.

    That said, I’m clearly on the side of getting out from under a principal residence mortgage as soon as humanly possible. Mortgage free ownership is a great insurance policy.

  13. Ringo

    Yes, we are fast-tracking. A longer amortization period just helps us sleep at night. For most people, a mortgage is the largest single piece of debt that you will incur – it makes sense to plan for every possibility. I like to know that if someone loses a job, our mortgage will still be paid. Just because the amortization period is long doesn’t mean we aren’t paying it off as quickly as possible

  14. ObserverX

    And Rob said… “That said, I’m clearly on the side of getting out from under a principal residence mortgage as soon as humanly possible. Mortgage free ownership is a great insurance policy.”

    … and the world was clear title. LOL

    I don’t get it Rob. You spend countless hours trying to convince the readers that the key to building wealth is to leverage RE investments and all of a sudden you say ‘get mortgage free’???

    I recognize you’re talking about principal residence, but think about it … in today’s market, people are hoping simply to be able to buy a principal residence that can be paid off in their lifetime — where’s there money left to invest if they’re busy paying off the home??? You should be encouraging them to max out the mortgage on the home, buy the investment property, and write off the mortgage interest on the home — it’s the only way they’ll get ahead, right?

  15. ObserverX

    I can’t resist …

    And Rob said … “My idea of realistic sustainability is properties that cash flow with 25%-45% down, and rent multipliers of less than 175.”

    … and then ‘oops!’:

    In our exchange on last Thu’s thread, you maintained that the Burnaby duplex was a winner — yet you agreed that after suiting costs, the purchaser would have shelled out $900K+ to obtain at best a rent of $4500/mth giving a rent multiplier of at best 200. The last time I checked my counting table (I haven’t memorized it by heart, yet), 200 is greater than 175.

    Unfortunately I haven’t the energy to dig further back, but I could have sworn that in the early days of this blog, you said that for a place to be a good buy, it needed to cash flow for *no more that 30%, and preferably under 25% down*. Now, when such properties no longer exist, all of a sudden, up to 45% down is fine. Hmmm, I guess it must be that paradigm shift that everyone’s talking about or is it just Realtor(TM) speak to grease the sales?

  16. robchipman


    I don’t advocate leveraging your principal residence to play the real estate market. Others do. It can be profitable. I don’t recommend it. I’m a long term holder. The operative word is “hold”. Other choices are valid, and have worked. They are personal choices. I practice what I preach.

    You recognize that I make the differentiation, so you can’t really pretend confusion. You’re making this particular conflict up.

    I do live in today’s world and market. I know people who are accelerating current mortgage paydowns. They will pay their mortgages off in less than 25 years. It is happening. If paying off the principal residence mortgage is so demanding, perhaps leveraging the principal residence more in order to buy investment properties may be a tad risky. I certainly wouldn’t advise someone swimming in debt to take on more (swimming being defined as “in danger of drowning”). You can encourage those people to borrow more, but please don;t advise me to do so 🙂 .

    A sustainable rent multiplier is one that applies market wide. Currently a property with a rent mulitplier of 200 isn’t bad, especially when it cash flows at +/-30% down. My personal preference is 175 or lower, but I don’t see a conflict between accepting free cash flow at a low down and stretching the rent multiplier (which is one of the cruder metrics). Higher rates will mean rent multipliers must be lower. Interest only loans will mean that rent multipliers can be higher.

    There is a link here to my old blog. Do a search on “metrics”. You’ll find several posts with example properties with metrics. You’ll see examples of 40%+ break evens that I label “good”.

    I haven’t undergone a paradigm shift. I have siad that I use 4 metrics, and that its hard to find properties that have 4 good ones. The Burnaby property had 3 good ones and one marginal one. On a gut feeling level it is a winner (after being in lots of properties you develop a good gut, just as everyone does in their chosen field of expertise). That property was purchased by experienced buyers. Nobody greased anything. They have a different idea of value than you do. As mentioned, so did a mortgage broker and an appraiser, as well as a competing buyer.

    Bottom line: I think you’re manufacturing this apparent paradigm shift.

  17. ObserverX

    Of course I’m needling you a bit, Rob, but I think it’s still a fair question to ask: For what percentage of the population is it realistic for them to be RE *investors* at this time? My gut feeling is that a high percentage of recent purchasers will be paying off the mortgage on their principal residence until retirement with little left on the side. (And of course, since they have no income and no other savings at that point, they’ll just have to sell the house to pay for living expenses — ah, the irony.)

    How do you expect them to become RE investors?

  18. robchipman


    You’re begging for the long answer! 🙂

    First, I don’t expect anyone in particular to become real estate investors. If someone wants to invest in real estate badly enough they’ll find a way to do it, but nobody has a God given right to fee simple ownership of investment property. I don’t think there will ever be enough of a shortage of real estate investors to threaten my business. There may be enough of a shortage to threaten rental accomodation supply (but we’ve actually seen that for decades, right?)

    The market is a long term thing. Right now is a great time to be a RE investor. We’re making money. We’re trading properties and we’re improving our holdings. Oh, wait, you’re talking about people who a) struggle to pay the principal residence mortgage and b) also want to be real estate investors and c) don’t currently own investment real estate and d) look to me for advice. O.K., got ya.

    Advice 1: get control of an income stream that generates a lot of money. Job or trust fund, doesn’t matter. Sending your kids to work may contravene local ordinances, so be careful.
    Advice 2: prepare to sacrifice family time and other enjoyable pursuits in order to get ahead in the short term.
    Advice 3: pay off your principal residence in short order. The shorter the better.
    Advice 4: two incomes are better than one (I’m not saying marry for money, but… 🙂 )
    Advice 5: live on a budget, and set concrete goals that you achieve.
    Advice 6: turn yourself into one of your creditors. Engage in forced savings.
    Advice 7: remember: life is filled with choices. Someone else will make yours for you if you prefer. This is not a drill.

    Enough advice. Your gut feeling and my gut feeling differ. I know recent purchasers on the fast track to mortgage paydown. One just called me for input on a career move. Big jump in pay in trade for a commute and more stress. Why me? To see if we could sell the current house and buy two residences to reduce commute and stress. The increased income lets him execute the plan we made last year even faster. He hadn’t anticipated it. Go figure. Life happened.

  19. ObserverX

    There must have been a message in your last post Rob but I can’t for the life of me figure out what it was.

    “I don’t think there will ever be enough of a shortage of real estate investors to threaten my business.” — Silly me, I thought this discussion was about the financial well-being of the RE investor, not that of Rob C.

    “Right now is a great time to be a RE investor.” — Huh? It’s a great time to buy now or it’s a great time if you bought over 5 years ago? If you’re suggesting it’s the former, then why do you openly admit it’s hard to find a good property today? Yes, I know you’ll respond that there’s always hidden gems, but if now is a “great time” what is it when 20% down, cash flowing properties litter the land? a “*really* great” time??

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