Thursday Numbers

There were 321 new listings yesterday, and 161 sales, for a sell/list of 50.12%.  Inventory reached 11,553, while over 90s reached 2,432, or 21.05%.

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34 Comments

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34 responses to “Thursday Numbers

  1. wv

    Fraser Valley’s September number. Sorry , I do not know how to post the link.

    October 2, 2007

    (Surrey, BC) – The average price of a single family home in the Fraser Valley reached $535,572 in September, the highest average price ever, according to statistics from Fraser Valley Real Estate Board’s Multiple Listing Service®. September’s MLS® numbers also revealed steady sales for sellers and increased inventory for Fraser Valley buyers.

    “September numbers show that Fraser Valley buyers and sellers took a bit of a breather after an unusually busy summer market, but we can see that the return to a lower sales level and an increase in inventory hasn’t affected the strength in average prices,” observes Kelvin Neufeld, president-elect of the Fraser Valley Board.

    September’s average price for a single detached home at $535,572 reflects an increase of 8.5 per cent compared to the average price of $493,727 from the same month last year. Average townhouse prices increased by 2.8 per cent in one year going from $312,829 in September 2006 to $321,480 last month. Apartment prices averaged $230,280 last month, an increase of 12 per cent compared to $205,520 during September of last year.

    “In September, the communities of Surrey, Langley and Mission reached their highest average prices on record for a single family home and in August that happened in North Delta and Abbotsford.”

    There were 1,332 sales processed through the Multiple Listing Service® (MLS®) in September, on par with last year when 1,323 sales were processed in September 2006. This marks a decrease of 25per cent compared to the previous month’s sales of 1,763 in August.

    The number of total active listings increased by 22 per cent in one year, going from 6,918 active listings in September 2006 to 8,429 last month. The number of new listings in September at 2,614 was also six per cent higher than the 2,456 new listings received during the same month last year

  2. Hypester

    Ok , spin is spin… Fraser Valley Real Estate, cracks are showing.Examples: Surrey Townhouse YOY +8.5%, thats down from +9.9 % last month YOY. Falling every month when you calculate moving annual total.White Rock down – 3.4 % YOY, Langley only +3% YOY, Abbotsford only +0.5% YOY. FVREB average Townhouse prices all areas +2.8%.
    This is down dramatically YOY. Paying realtors and Lawyers and taxes on sales now means “flippin” and speculators are heading for negative return territory.
    Apartmets are still up 12 % all areas YOY but thats barely a break even when your flippin and flogging assignments.
    No matter what the FVREB spin doctors say, prices are moving down in the outskirts.Thats where it starts.

  3. Hypester

    One final shot… Surrey inventory now at 6.3 months of product at current sales flow.

  4. Mightymouse

    I’m goin with 14K invintory for the end of the year.

  5. doubter

    It seems pretty a pretty desperate bear who will quote declining year over year INCREASES. I used to buy into this stuff. But at a certain point I made the startling mathematical discovery that a year over year increase, regardless of the fact that it was less than last year’s year over year increase, actually means that prices are MORE than last year!

    If you are having troubles with this concept, do the math (a spreadsheet program might help). You may be as surprised as I was to find that a year over year increase, regardless of the relative amounts of previous year over year increases, means that your down payment and monthly payments will be HIGHER than they would have been before the smaller increase of the immediately previous year. That is, if you can afford the property at all, and get this: affordability is ANOTHER aspect of this whole thing that stubbornly refuses to be negatively affected by a lesser increase! And the banks and realtors just don’t seem to want to play along with the argument that a decreasing increase means that one can now afford a home. It seems to defy logic, but I swear it’s true. Try it yourself!

    I propose something truly radical: the only acceptable evidence that prices are decreasing is decreasing prices. Show me the numbers. Show me homes that sold for less than they did last year (or the year before, or …). Then and only then will I believe it. Everything else is simply wishful thinking and I am sick and tired of wishing.

  6. chip

    “I propose something truly radical: the only acceptable evidence that prices are decreasing is decreasing prices. ”

    I think you’re on the wrong blog. Few people are arguing that prices are already falling. Instead the bear’s argument is that they will fall.

  7. doubter

    chip, I know the bear arguments. And I’ve spent about the past three years reading them, and initially subscribing to them. (And from time to time I have seen arguments that prices are already falling.)

    Maybe it’s just that “decreasing increases” aren’t really evidence for anything, particularly if you look back and find the same kind of fluctuations. Why would a YOY increase less than last month’s YOY increase mean that next month’s YOY increase will again be less, and eventually reach zero and then go negative? What warrants extrapolation? Will extrapolation even reach zero in our (home buying) lifetimes, and/or will it take long enough that houses are $2 million?

    I’m mostly interested now in finding out the root cause(s) of this madness. The most interesting new idea I’ve seen her in months is the grow-op issue.

  8. Anonymizer

    “The most interesting new idea I’ve seen her in months is the grow-op issue.”

    I agree, but it’s bothered me for years. I rent on the westside and have moved 5 times in ten years – I’ve seen a few well-tended streets. But within a two block radius of two of the five have been grow-ops. Three of the five had people around with ties to or worked in that “industry”. On one random drive, a Mountie pointed approx. 30 houses controlled by organized crime between E division HQ and UBC. Outside Vancouver, Burnaby RCMP went on TV a few years ago to point the 400 grow ops they knew about but would never get to because of manpower issues. A contractor in Surrey without apparent ties to org. crime got up to 16 houses, all of them bought with cash, before he finally was busted. All anecdotal, but there has to be a Freakonomics issue here, if not an impact on RE…

  9. reknab

    FDIC is proposing a blanket freeze on ALL ARM mortgages to keep them at the low intro rate rather than have them adjust to the higher adjustable rate. All in an effort to stem the foreclosure rates and further associated economic damage.

  10. Westside Matron

    I live on the westside as well and have had four grow-op busts on my side of the block in the past year. Many houses in our neighbourhood are obvious grow-ops but, as has been said, the police can’t get to them all. The scary thing is the apparent biker gangs that are moving in, especially into the bigger new houses with the views. We now have, not only grow-ops, but Hummers and Harleys on the streets, and the possibility of gunfire. Is this what we want in our “liveable” city?

  11. Priced Out

    Doubter,

    V671651 $272,900 – Last year, I went to two open houses for the same size units in this 5 yr old New Westminster building. The asking prices were about $2000 higher last year and one RE agent showed me a recent sale in at over $274,000. I might consider buying in this building when one of these 822 sqft suites is offered at $225,000, if I can get over the noisy location. I figure I could buy there in a year or two once New Westminster has been flooded by all the new condos under construction. Some bears would suggest I wait longer, but I’m looking for a place to settle down not an investment.

  12. Priced Out

    Here is one of the reasons why I’m not too excited about the lower sales: the weather is miserable and everyone I know is sick. I imagine its hard to sell real estate at a time like this.

  13. abc

    From what I’ve seen, this winter is forecast to be unusually cold and wet 😦

  14. ceejay

    hey doubter, here’s a spreadsheet:
    month index = 100 price change %
    1 112.00 12
    2 110.88 -1
    2 109.77 -1
    3 108.67 -1
    4 107.59 -1
    5 106.51 -1
    6 105.45 -1
    7 104.39 -1
    8 103.35 -1
    9 102.31 -1
    11 101.29 -1
    12 100.28 -1

    Here we have a 12 % price increase in 1 month followd by 11 successive months of 1 % price decreases. You are still up $280 at the end of a year, but would you buy given that trend? A positive YOY doesn’t mean that if you buy now you’ll enjoy appreciation. You need to look at the price trends.

  15. Snick

    “You need to look at the price trends.” – Ceejay

    Hmm…what a novel idea.

  16. doubter

    ceejay, I assume your spreadsheet is hypothetical.

    I don’t really care about appreciation; I want a home, not an investment property.

    The problem with price trends is that one can’t necessarily extrapolate from them. I remember negative price trends for two or three months several times in the last few years. But year over year prices have been up 8-12% each and every year.

  17. doubter

    I’m in Seattle this weekend. Noticed a front page story on one of the local newspapers about falling real estate prices. Photo showed a property that had lost $100k in value on about $600k price (not sure whether it was asking price or sale price) since June.

  18. fish

    Dobter

    Voila:
    http://seattlepi.nwsource.com/local/334420_housing06.html

    Look at the numbers at the bottom of the article.

  19. fish

    Since Rob isn’t going tog ive us Friday’s numbers here are some from Sacramento

    http://www.housingtracker.net/askingprices/California/Sacramento-Arden-Arcade-Roseville/

  20. Snick

    “Since Rob isn’t going tog ive us Friday’s numbers here are some from Sacramento” – fish

    I’m likin’ that “take charge” attitude. OOOOh!

  21. Jeff

    cool… prices down 10% in 1 month in Seattle.

    back to 1 year ago pricing in just a month…

    tick tock.

  22. fish

    Jay

    Great article on how things are so out of synch here and the causes are many grow-ops, outside money, rich baby-boomers etc

    here are some quite astonishing numbers out of orange county:

    From the Orange County Register

    Market watcher Steve Thomas at Re/Max Real Estate Services in Aliso Viejo notes the impact of distressed properties in his biweekly summary of housing supply …
    After finding a new way to search for short sales and foreclosures on the market and in escrow, the new findings are disconcerting. Currently, short sales and foreclosures in Orange County account for 12% of the active inventory and 15% of all escrows opened within the prior month.
    Thomas also calculates “market time,” a benchmark of how many months it theoretically takes to sell all the inventory in the local MLS for-sale listings at the current pace of pending deals being made. This index shows the inventory-to-selling ratio continuing to erode. By this Thomas logic, it would take 15.17 months for buyers to gobble up all homes listed for sale at the current pace of deals vs. 14.73 months two weeks earlier and vs. 7.10 months a year ago.

  23. Anonymous

    Portland Condo market dries up:

    http://tinyurl.com/2qgqtu

  24. doubter

    fish, I would put little stock in the one-month 8.9% dip in Seattle median sale price quoted in the article you linked to. It looks to me like anomaly, unless the decrease is sustained. Here’s hoping, and that it spreads here.

  25. fish

    Number crunching

    From craigslist:
    $550000 N/W corner Unit with Coal Harbour Views

    ——————————————————————————–
    Reply to: see below
    Date: 2007-10-09, 11:30AM PDT

    POINTE CLAIRE – 1028 sq.ft 3 Bed, 2 Bath N/W corner unit with corridor views to Coal Harbour. Insuite laundry , open balcony, 2 parking included. Rock solid building with pool, jacuzzi, sauna, steam room, gym and 24 hour concierge. Leased at $1850/month until Feb 28, 2008. 2 Parking stall #70 & 264, no storage locker.

    OK with 30% DOWN
    $385,000 @ 5.5% fixed for 5 years amortized for 25 years.

    Mortgage $2,634
    Tax and Strata estimated at $350
    Lost interest on Down payment AFTER TAX $350

    Total Expenses = $3334 @ Month
    Total Rent = $1850 @ month

    Cash flow negative to the tune of $1500 assuming never empty, no repairs to the building or the unit.

    You would have to increase the rent by 80% to break-even.

  26. Priced Out

    fish,

    I think you underestimated the Tax and Strata by at least one hundred dollars per month. You also need to budget for loses due to damage or vacancies. What about insurance? I bet if you added up all the possible expenses, you would have to double the rent to break even.

  27. fish

    Priced out

    You are right- I have underestimated the costs by probably $200/ month- however I am trying to show that even in the best case scenario the numbers don’t make sense.

    I am sure the bulls will argue that cash flow doesn’t matter – and indeed in a rising market it doesn’t – just like profits didn’t matter in the dot-com boom….or P/E ratios.

    But eventually they DO matter.

  28. News Flash

    Fish:

    “Leased at $1850/month”

    “You would have to increase the rent by 80% to break-even.”

    Why not look on Craig’s List and to see how much a 3 bedroom rents for in Coal Harbour? I will save you the work – they range from $3300 to $9800 per month.

    You can raise the rent the 80% in Feb 08 once the lease expires.

  29. fish

    News FLash

    Lets not let facts get in the way shall we.

    This unit is 1028 sq feet. Which is small .

    So it must really be a 2 bed and den

    Here are the comparisons from Craigslist:

    http://vancouver.craigslist.org/apa/444403830.html
    http://vancouver.craigslist.org/apa/442201409.html

    The unit mentioned is not a premium building. The $3300-9000 are premium buildings with a view and some are twice as big.

    The average for 1000 sq feet in the second tier buildings is $2000-$2400.

    So we have a few hundred room to move up- that should tke care of my underestimation of the expenses.

  30. paulb

    Lets have those numbers ! 🙂

    Fri was very bearish

  31. steve

    News Flash,

    I wouldn’t normally spend any time responding to your ridiculous posts. But, this last one was just too easy to tear apart.

    Here are some Craigslist Coal Harbor rental posts in your “$3300 to $9800” price range that you compare to Fish’s post. Remember, Fish’s example was 1028 sq. feet and listed for $550,000.

    All these posts were from the last 30 days:

    $3500 1700 Sq, 3 bedroom, 2 Bathroom

    $9800 2500 sq. / 3br – Coal Harbour 1st Floor Penthouse

    $4500 1706 sq. / 3br – PRESIDENTIAL 3 BR- penthouse suite- Amazing views-1600 SQ FT. Deck

    $3500 / 2br – Coal Harbour ! Exquisite Unfurnished 1825 sqft-Showing this Week

    $3500 1700sq / 3br – Coal Harbour-1 Block From Robson – Great Location

    $5000 / 2br – luxury suite 1825sqft, water views over Coal Harbour

  32. fish

    I had a nice post with analysis to counter newsflash but Rob must have decided I have posted enough!

  33. fish

    Here’s the abbreviated version.

    Teh average rent for a 1000 sq foot in a 2nd tier Coal Harbour building is $2000-$2200.

    So about a few hundred above this unit’s current rent. About the same as my underestimation of the expenses.

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