Monday Numbers

Once again, an unimpressive listing day for a Monday. Last time I said that we caught up on Tuesday.  We’ll see what happens this time.

186 new listings, and 169 sales, for a sell/list of 90.86%. 

Inventory is at 11,282, while over 90s are at  2,583 (22.89%). 

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42 Comments

Filed under Daily Numbers

42 responses to “Monday Numbers

  1. Gadwin

    For those of you not aware, Edmonton’s market is panicking right now. Owners are slashing prices by 40K (or 10%) down to a median price of $417K:

    http://www.edmontonsun.com/News/Edmonton/2007/08/27/4450482.html

    The meltdown has reached Alberta to the east. To our south, Seattle is crumbling. How long will Vancouver hold out for?

    Gadwin

  2. thomas

    the bright spots noted in schiller’s price index, which was released today, pointed to particular strength in seattle and portland, while almost all other cities posted declines. clearly the north west is different, not just vancouver.

  3. joe blfzk

    If those Seattle prices are YOY, they may not reflect the most recent situation.

    A CNN newscast late last week singled out Seattle as having the highest recent inventory increase among major US cities.

    Scary stuff!

  4. Jay

    I’m new to the the RE market but did get a bit of RE a few years ago. A deal by today’s standards. I cannot believe people continue to buy at these prices. I want to get some more property but now just seems way too risky.

  5. vomitingdog

    Was just in the Okanagan and saw quite a few for sale (and sold) signs up. Does anyone know anything about that market? Is it hot? Has it cooled? Lovely views from the Naramata bench, that’s for sure!

  6. Anonymous

    Nice one Gadwin!
    Great Scaremongering.

    This is directly from your link:

    “There’s twice as much inventory in residential real estate today as there was year ago at this time,” Re/Max agent Abe Hering told Sun Media. “If your supply mushrooms tremendously, inevitably the only product that will get consumed is the one that’s best priced.”

    How’s our supply situation?

    Rob posts it daily and its been hardly “mushrooming”. Oh, but keep your eyes tightly closed & those fingers crossed bud.

  7. fish

    Anonymous.

    I suspect ALL assets are getting repriced. It started with US housing and despite those who thought the problem was contained (eg Paulsen) it has now spread to bonds and the stock market.

    However it is not just in the US. Foreclosures are rocketing in the UK, and Spain is in serious trouble with over-building and over-pricing.

    This will the first housing drop that I can recall that :

    1) is Global
    2) Was not preceeded by a recession, but may cause a recession.

    Vanocuver and Seattle and Portland are very robust areas, economically and have a lot to offer geaographically…will that mean they are completely immune from this carnage?

    I doubt it, but anything is possible.

  8. New Investor Rob

    Still waiting to see increases in inventory. When I first started on this blog a few months back, everyone was giving their predictions for the 13000 mark. Although I do expect increases in inventory the lack of inventory increase tells me two things.

    1. Everything that the Bears say is self evident is not exactly as it seems, or at least not on their time lines.

    2. People are toying with the market. The list versus sales numbers that we have seen in the last few months would require the inventory to go up. Its not going up! What this means to me is that people are toying with the market to see if anyone will bite on what they think the value of their place is worth. When no one bites they are taking the property off the market because they can afford to and because they feel in the long term they will get the money they want.

    I’m an investor with a slightly above median house hold income. I’m not expecting any price gains on my investment property until at least late spring of 2008, and I’m ok with it.

    My guess is that there are similar people out there who believe in a certain value for their property and aren’t in a hurry cash out until they get what they want.

    They question is how long can they wait.

  9. Anonymous

    But didn’t you hear Gadwin?!?!??!!

    There’s “crumblings” “meltdowns” “panickings” all over the place and its coming for VANCOUVER!!!!!!!!

    OH MY

  10. Gadwin

    > Anonymous wrote:
    > How’s our supply situation?

    Have you checked the latest Fraser Valley numbers? If not, I think you should check it again and compare the inventory to last year:

    “The number of active listings in July at 8,376 is 35 per cent higher than July 2006 inventory which sat at 6,200. A total of 3,120 new listings were added to the MLS® in July, compared to 2,657 new listings added in July of last year. ”

    http://www.fvreb.bc.ca/press-releases.php

    WTF will the market do with the extra 2,176 listings in the Fraser Valley versus last year?

  11. fish

    New Investor Rob

    I think both your points are correct.

    There is a saying for stock analysts that goes…’ask me where the market is going, but don’t ask me when’

    I guess that way you can always be right because ‘eventually’ the market will correct, or will rally.

    the same is true for RE. The numbers don’t make sense at present, even with the beauty and the Olympics, and the mountains.

    however things can stay irrational for a long time. The NAsdaq was silly at 4000, it was way over-valued. It went to 5000+/_ and then lost 75% of it’s value.

    So while it is easy to say when something is over-valued, it is impossible to say when it will come down to earth.

    When prices go up so long and so strong , there is a usually a violent correction in the other direction…see the NASDAQ, gold in the 70’s and RE in Florida.

    What will happen in Vancouver…we will have to wait and see.

  12. New Investor Rob

    Gadwin

    This blog isn’t watching the Fraser Valley numbers its watching Robs area.

    All I’m saying is that for at least 4 months people have been calling for inventory to hit 13000 and its not even getting close.

    Does that mean inventory hit 13000? No. Does it mean we don’t have more inventory than last year? No.

    It just means that for 4 months a good chunk of the Bears have been very wrong on their guess and timing.

    I would give them a break if they said inventory would go up in the fall, but they said it would be up right now, and it isn’t.

    If you go back to my original comment all I said was that “Everything that the Bears say is self evident is not exactly as it seems, or at least not on their time lines.”

    Plus you took the only negative number out of a page of positive numbers to share. It was the second highest freaking sales in July ever and prices year over year are up at very nice looking numbers.

    Granted this is a press release and they are spinning their numbers but all is not bad in the Valley yet.

  13. WoW

    I’ll give you that (lack of listing surge, as predicted). Still, I beleive listings are higher than last year?
    Still waiting for a listings surge to tell me the tide has turned.
    Rob – any sense (once 90day pre-approvals are done with) that the banks are tightening somewhat on their lending practices?

  14. Gadwin

    >New Investor Rob wrote
    >Plus you took the only negative number out of a >page of positive numbers to share. It was the >second highest freaking sales in July ever and >prices year over year are up at very nice looking >numbers.

    Check the sales for Edmonton and Calgary earlier this year. It started out strong as well. The problem is, by June, the median price didn’t flatten. For some reason in Edmonton, the median price took a reversal and now, everybody in Edmonton is panicking and trying to run for the door.

    What is happening in Alberta is very disconcerting. I was expecting flat prices for a while, but everything is imploding there quite quickly. I would hazard to guess that the stampede for the door in Edmonton is also related to the rash of credit crunch and subprime news that is hitting the media, day after day.

    Gadwin

  15. New Investor Rob

    I’m hearing we should have a credit crunch in Canada, but the people on the ground keep telling me that its easy to get a mortgage.

  16. Anonymous

    New Investor Rob
    August 28th, 2007 at 1:37 pm

    “I’m an investor with a slightly above median house hold income. I’m not expecting any price gains on my investment property until at least late spring of 2008, and I’m ok with it.”

    What % price gains do you expect to see on your investment property between now and late spring of 2008?

  17. News Flash

    “The meltdown has reached Alberta to the east.”

    What do you consider a meltdown? Rising inventory to normal levels with no decline in the median prices and still huge year over year gains?

    “To our south, Seattle is crumbling.”

    Seattle is up 9.8% year over year.

    “How long will Vancouver hold out for?”

    Hold out for what? Normal inventory levels and single digit year over year price gains like the places you mentioned?

  18. News Flash

    “Check the sales for Edmonton and Calgary earlier this year. It started out strong as well.”

    Wow Gadwin has discovered real estate is seasonal and slows during the summer months.

    I get it it. Anything less than an extremely hot market with record sales and prices is a crash.

  19. FTB

    News Flash said:
    “Wow Gadwin has discovered real estate is seasonal and slows during the summer months.”

    I thought real estate picked up in the summer and slowed in the winter. Can anyone describe the typical annual cycle to me?

  20. paulb

    traditionally winter and summer are slow for RE.

    It is getting tougher to finance stated income loans etc. prime is still no problem. According to a mortgage broker I know, sub prime is also alive and well in Canada according , although it looks like the breaks are getting jumped on quickly for those types of loans.

  21. robchipman

    FTB:

    FWIW, the summer and winter slowdown phenomena is over-emphasized. Bigger market moves dwarf that stuff. Last year’s summer slowdown lasted until January. The year before we powered right through.

  22. blueskies

    preemptive planning?

    http://tinyurl.com/2o4jaj

    they are suggesting you keep your credit record spotless….. in case

  23. Strataman

    >New Investor Rob wrote
    >Plus you took the only negative number out of a >page of positive numbers to share. It was the >second highest freaking sales in July ever and >prices year over year are up at very nice looking >numbers.

    So it’s a guess; no bear that I know has said for sure it will happen at mm/dd/yy.

    Also I would suspect that amateur Vancouver buyers may be the last to know about a downturn. Most don’t even know there is a downturn in the states! Most are incredibly nieve!

  24. The unthinkable"Renter"

    Whats next for the market Rob.

    The banks have skimped out on our pre approval mortgage amount from $570k to $480k.

    Are the banks tightning thier belts?
    We were late in getting our pre approval because I am back at work now for 3 months and the interest rates we missed out on as well. Now its 5.8% we could of got 5.29% 3 months before if I was working :(.

    After this massive Hard On of a run up, is it not rational to hope that prices may soften 10%???

  25. robchipman

    Blueskies:

    I think he’s suggesting making sure your credit record has no errors, and suggesting that too many credit cards might hurt you.

    It’s always a good idea to maintain a great credit record if you want to get credit from someone other than a lender who specializes in lending to people with bad credit scores. If you let it get stained it will haunt you longer than any short term credit crunch.

    That means establishing credit, if you don’t have it, and maintaining it if you do. If you don’t have credit its likely because you don’t buy on credit from people who report to the credit bureau.

    Interestingly, beacon scores, a method of reducing the information on a credit report to a number, can be brought down by too many enquiries. Too much mortgage shopping can hurt!

    UTR:

    A 10% correction isn’t unthinkable (how many times do I have to say the market will change). I’m not touching the question of whether hoping for a correction is rational or not 🙂

    What are you getting for 5.8%? What kind of term? Are you using a broker or a bank?

  26. Anonymous

    “I’m not touching the question of whether hoping for a correction is rational or not.”

    Yeah! The Best Tulip Bulbs Anywhere!

  27. The unthinkable "Renter"

    Mortgage under Invis (Broker) 5 year term 5.8%

    Funny thing is that they offer us our borrowing number ($480k) not at 25 years ammortization but at 40 years…. They obviously want us to buy!!!

    Sneeky Gits!!!! Grrr…..:(

  28. The unthinkable "Renter"

    Anonomous… you can play with my Tulip Bulbs anytime.

  29. vanreal

    there is an article in Time mag this week about the US housing market. It states that even within cities there can be a huge difference in price. To paraphrase the article, apparently in Denver, while house prices are dropping in outer suburbs, they are still increasing in inner city trendy areas.

  30. vanreal

    unthinkable renter, the banks probably reduced your pre-approval amount because interest rates have gone up not because of credit tightening

  31. The unthinkable "Renter"

    Thanks, Vanreal both of our thoughts kinda go hand in hand? Right?

  32. coco

    Unthinkable renter,

    Some people think the fever in the housing market is comparable to the tulip craze in the past. Read about it here:

    http://tinyurl.com/45hrw

  33. coco

    Saskatchewan reigns as Canada’s hottest housing market.

    http://dcnonl.com/article/stats/24177

  34. employed

    Seattle is right up there with California 29% and Florida 30% at 22% subprime as one of the highest in the country. The subprime mess will effect even the PNW. Vancouver will not just keep rising into oblivion as most “experts” predict. This is not how the capitalist system works. Vancouver is way outside economic fundementals and it wont sustain. It will correct you can quote me when it does. I predict 25%low-50%high, it has managed to push on longer than I would have expected as did Cali, Ariz and Florida did last year but chickens finally came home to roost. Things just have a way of working themselves out, you cant predict there timing and wont do that here but the market will drop the question is when not if.

  35. robchipman

    employed:

    “Vancouver will not just keep rising into oblivion as most “experts” predict”

    What experts predict this? CREA has a recent history of having to revise its predictions upwards because it has consistently undershot price appreciation. I’ve certainly said, since this blog began, that continual price appreciation is a fantasy.

    I remember, prior to Y2K and the dot.bomb, being told all the time that we were in a new, digital world and economy, and that fear and greed didn’t matter anymore. I really can’t equate what the “bulls” are saying now with what I heard then about the new tech economy.

    It seems to me that most “bulls” (and I use the quotes because the lable gets applied so loosely) believe that “bears” ahve been repeating the same argument for so long, and have been wrong for so long, that they don’t have a lot of credibility in terms of predicting the time and degree of a correction. That’s hardly the same as saying we’re in a new real estate economy and a correction won’t come.

  36. employed

    Rob what do you mean the bears have been wrong? Have you not read the papers and seen what is happening in the US? Is it not a crumbling market? Did we not predict this? All I am saying is the same will happen here.

    I feel most RE people are calling for a soft landing after the olympics for Vancouver? Are they calling for a correction? I have not heard anyone calling for a correction.

  37. employed

    ROb
    Another note, i said “most” not all experts call for continual appreciation. You may not but you are calling for a decline like me?

  38. Anonymous

    “It seems to me that most “bulls” (and I use the quotes because the lable gets applied so loosely) believe that “bears” ahve been repeating the same argument for so long, and have been wrong for so long, that they don’t have a lot of credibility in terms of predicting the time and degree of a correction. ”

    I guess the same could of been said about how wrong the bulls predictions were in 1996 – 2000, 1989 – 1992, etc. too.

  39. The unthinkable "Renter"

    coco Thanks for the link, I tell you the dollar is worthless today.

    The banks just want to make sure you can make your interest/mortgage payments while the going is good sooner or later the value of money will increase. The bank will want their money back with rate increases and housing prices will then correct!!!

  40. robchipman

    Employed:

    Simple question: who are the experts who called for (or are still calling for) continual appreciation? Were they actual “experts”, or are you talking about your brother in law?

    How were bears wrong? Simple. They’ve been calling a top too long and too often. If they followed their own advice they missed the chance to book some great gains. If they gave the advice to other people they cost those people money.

    We all know the fable of the boy who cried wolf. Some think that the lesson is that the wolf eventually came (he did, but that’s not the lesson, clearly). The lesson is that calling for disaster too soon, without reason, costs you credibility, and the loss of credibility can cost you even more. I think a lot of bears should probably own up to that.

    “I feel most RE people are calling for a soft landing after the olympics for Vancouver? Are they calling for a correction? I have not heard anyone calling for a correction”.

    I don’t think you’re listening. The mystery of this market isn’t that it will rise forever, but that it hasn’t stopped rising yet. That confounds most of us. What it doesn’t do is point to a clear “best before” date. The spectre of a correction is clear to most of us.

  41. abc

    RE bears have also made excellent money over the last 5 years if they were in stocks instead of RE. I even know one who was bold enough to short US home builders and that certainly worked well for him. So a RE bear can be wrong about Vancouver RE and still make a fine living 🙂 The bears who lose are the ones who are perpetual pessimists and sit on cash or gold.

  42. ObserverX

    This bear sat on gold for a half dozen years starting back in ’98 and did pretty well.

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