Thursday Numbers

There were 157 new listings today and 153 sales, for a sell/list of 97.45%.  Of the sales 18, or 11.76%, went over list.  Average list price of sales was $578,183, while average sales price was $559,931, or 2.37% off list.  Average DOMs was 42.

There were 80 price changes, of which 11, or 13.75%, were increases.  Average original price was $589,477, while average new price was $13,031 less, at 576,466,  (-1.9%). Average DOMs to price change was 53.

Inventory reached 10,766, of which 2,841 or 26.36% were over 90s.  0.64% of all active listings had their prices reduced today.

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67 Comments

Filed under Daily Numbers

67 responses to “Thursday Numbers

  1. paulb

    What happened to Wed?

  2. domus

    hidden agenda, clearly……just joking!

    PS The crash is coming…..not the adjustment, the crash!

  3. Chinko

    Keep dreaming domus

    zzzzzzzzzzzzz……………

    2008 volume will blow you away!

  4. coco

    CIBC Exposure to Subprime Mortgages at
    C$10 Billion

    http://tinyurl.com/283s48

    (ouch)

  5. Crabman

    Read what the head REALTOR™ was saying about DC in late 2005. Sound familiar?

    http://nvar.com/newsdetail.lasso?articleno=nvarn100831

    BTW, prices down 20% in DC since the peak.

  6. coco

    National Bank of Canada Has First Loss in 15 Years

    http://tinyurl.com/2gunrj

  7. coco

    No subprime investments….

    TD Bank reported its net income soared 44 per cent to $1.09 billion in the fourth quarter as U.S. operations showed growth and the bank’s investment banking division overcame the credit market crunch.

  8. coco

    Royal Bank of Canada ended another record financial year with a five per cent rise in fourth-quarter revenue and profit, despite writedowns linked to the collapse of the U.S. subprime mortgage market.

    http://tinyurl.com/yvwyb9

  9. coco

    Banks, U.S. near deal to freeze subprime rates

    http://tinyurl.com/2jxo8w

  10. coco

    Canadian Economic growth tops forecasts

    http://tinyurl.com/2fk457

  11. blueskies

    crabman: good find!
    maybe “geezer” and “ampa” should read this just for the sake of nostalgia.

  12. coco

    BC Hydro will have to boost electricity rates at least 7.5 per cent each year for the next decade in order to satisfy British Columbia’s goals of electricity self-sufficiency and green power.

    http://tinyurl.com/2obcbp

  13. coco

    The new Translink board would run into the same problem the old board regularly faced — a funding shortfall. Karagianis called the revenue sources for TransLink — now officially the South Coast British Columbia Transportation Authority — “very problematic.”

    “It says they have to raise property tax and raise transit fares before they can invoke additional gas tax,” she said of the legislation.

    http://tinyurl.com/38wqb5

  14. coco

    ICBC introduces new Driver Risk Premium

    http://tinyurl.com/2x3xsk

    (This is in addition to regular insurance rates due to increase next year)

  15. mk-kids

    Thanks Crabman! I especially love the “world class” city references and the whole “running out of land” argument… it seems I’ve heard that somewhere before…

  16. robchipman

    Re: running out of land.

    Anyone have any comments about eco-density and affordability? I’m not sure that the two have to go hand in hand, and yet they seem to be doing so. I’ve heard that Vancouver is going to allow people to live in garages as well as allow rental suites in condos (this probably isn’t cast in stone, and is my paraphrasing of the idea, but I’d swear Susan Anton talked about both yesterday on the radio).

    If that’s the case, and if developers are starting to leave this market because costs (including land costs) are too high relative to profit, do we really understand the running out of land argument? It seems like a paradox: you look north and east and see nothing but forested lands ready to be logged and paved, yet we’re increasing densification and seeing rising prices. If we really do have a surplus of land, why are we seeing changes in the market that seem to ignore that?

    “world class”? I agree. You have to absolutely love that term. It seems to mean everything good, and you can apply it to just about everything. World class city, world class transit, world class homeless people, world class property crime levels….

  17. DaMann

    Crabman

    Good article. It makes me laugh when I hear my friends saying “but the experts all say we will keep going up until at least the Olympics” Hmmm yes the experts. Running out of land and World class. I think every hot RE market uses that crap.

  18. joe6p

    re: TD profits

    i read that TD bank had low exposure to u.s. subprime, but when i look at the td canada trust web site they seem to have exotic canadian mortage products. imo they might be hurt more in a canadian re downturn. any thoughts?

  19. coco

    “if developers are starting to leave this market because costs (including land costs) are too high relative to profit”

    I thought our real estate market was so hot, that people bought properties no matter what the final cost would be. Are you saying affordability walls are a factor in profitability too?

  20. coco

    Problem with rising prices….is it actual demand or is there a lot of hoarding and speculation out there?

    Sure, if your investor who rents out properties you purchase that is one thing, but what about vacant properties, properties rarely used, etc. No one really knows how many are really out there and what will happen if these owners get spooked.

    I know a few people that have vacant properties bought on spec ready to be sold at a moments notice and I’m only one person. That makes me wonder how many others are out there.

  21. Annon

    Any bank that benefited most from US, ie CIBC, Bank of Nova Scotia will suffer most on subprime. I didn’t track TD but I do not believe TD’s subprime exposure is negligible. CIBC was saying that they have only some 100+ million in subprime, and look where it is now? Is the security exchange going to probe into this fraudulent practice? Mislead or misrepresent materials.

  22. blueskies

    That makes me wonder how many others are out there.

    geezer had a thread on another real estate site that claimed he knew several people that collected vacant condos.

    the condo as a “bauble”, a bright pretty shiny thing to be admired but not consumed……

    oh, this is gonna hurt big time…….

  23. robchipman

    coco:

    You thought what you thought. You’re not repeating anything I’ve said.

    Affordability has always been a challenge, and often is for many products. We’ve seen changes in the marketplace that, combined with market conditions, have made huge prices very affordable, despite what people say about median incomes and whatnot (low rates, longer ams, wider insurance, etc).

    High prices are the cure for high prices, so obviously affordability is a factor in profitability. Not long ago a developer was quoted as saying something along the lines of “prices can’t fall becaue fundamentals (by which he meant inputs) are continuing to rise, so prices have to rise”. At the time I pointed out that the logic was sound – as long as we assumed that demand couldn’t weaken, which is clearly an assumption we can’t ever make.

  24. Tony Danza

    Re: running out of land.

    “Ron Shuffield, president of Esslinger-Wooten-Maxwell Realtors says that ‘South Florida is working off of a totally new economic model than any of us have ever experienced in the past.’ He predicts that a limited supply of land coupled with demand from baby boomers and foreigners will prolong the boom indefinitely.”

    New York Times, Trading Places: Real Estate Instead of Dot-Coms, 3/25/05

    Things will play out here exactly as they are in Florida. Land constraints, baby boomers, rich Chinese/Albertan sheiks, rich gold miners, eco-density they’re just diversions from the simple fact that affordability is what drives and supports RE prices in the medium and long term.

  25. Tony Danza

    From MSN (http://preview.tinyurl.com/yrwocl):

    “After listening to quarterly earnings conference calls by companies such as Countrywide Financial (CFC, news, msgs) and Washington Mutual (WM, news, msgs) and reading real-estate journals, Burry came to realize that home-price appreciation was the assumption behind every decision by borrowers, lenders, insurers and ratings agencies.”

    Thank God no one in Vancouver is assuming appreciation when making their RE purchase decisions!

  26. DaMann

    “Thank God no one in Vancouver is assuming appreciation when making their RE purchase decisions!”

    That is such a good point. If you said to someone that their place might go up 20% in 10 years, how many people would buy? Or at the very least pay the prices they are now. To a lot of people it’s just a get rich quick scheme not a place to live.

  27. robchipman

    TD:

    The thing is that affordability doesn’t work in isolation. Restricted land supply (which we clearly have, and I think eco-density is ) contributes to unaffordability, which contributes to densification, which eases affordability…until you’re paying $300+ for 500 sq. feet, at which time the cycle repeats.

    The other thing to consider (whether you like the idea or not) is that stretched ams and wider insurance are examples of how buying affordability gets addressed (and who knows what else the industry has up their sleeves); however, on the rental side of the equation (which powers cash flow and provides the alternative to owning) there have been no innovations to address affordability. Even with favourable mortgage conditions its really tough to get good numbers, and rents have already bumped up considerably. That’s a challenge, and I’m not sure which opportunities will emerge.

  28. Grin and Bear It

    Rob pondered: “If we really do have a surplus of land, why are we seeing changes in the market that seem to ignore that?”

    Because they can. Seems to be the simple answer. Human greed has to be the most powerful forces. Developers will use any ‘argument’ to fuel profits. If the money is there then the land will miraculously appear. I can’t wait until we try the man-made island condos! Should be fun.

    I believe many recent RE buyers have stretched themselves quite thin by buying in this market. I wonder what their quality of life is like now.

  29. Tony Danza

    Rob I agree with what you’re saying, the only thing you’re missing in your cyclic analysis is demand. It’s an extremely complex system, but like any system if you pull out one component, the system won’t function much longer. Who knows what that component is? I just have a feeling that every component in this system will trace back to affordability.

  30. DaMann

    Ha ha Too funny. Was just sitting at my desk working on the computer. We had a guy come in to measure the windows for new blinds. He pointed out my window at the Saphire ( Pender and Bute) he said “do you or anyone in here need a place to rent? I have a new condo in the Saphire for rent if your interested”

    I think everyone and the window blind man are buying “investment” condos DT. The carnage is going to be bad.

  31. robchipman

    G&B:

    Aren’t we saying the same thing? You could say that there is no shortage of land because we could always flatten Mt. Seymour and throw the fill into Burrard inlet. All it takes is the desire and the money.

    I think that the changes in the market (densification, higher prices, longer commutes) don’t ignore the shortage of land, but are a response to it. We re-zoned a huge part of North Van so that Cove and Mountain Forest wouldn’t become Citadel Heights West. But that restricts land supply, bumps up North Van land values, and encourages more towers in Lower Lonsdale (and more development on Coquitlam’s north slope).

    Tony:

    I’m not meaning to miss demand. As I said
    earlier in respense to a developer’s comments about fundamentals: “…At the time I pointed out that the logic was sound – as long as we assumed that demand couldn’t weaken, which is clearly an assumption we can’t ever make”

  32. coco

    Density may alleviate housing demand/affordability but at what cost. There is enough disagreements and fights within stratas now, add more people to the mix in smaller cramped spaces….look out.

  33. robchipman

    Coco:

    You know I’m a sfh on a big lot kind of guy….

  34. coco

    B.C. growth projected to drop, second quarter `a tale of two economies,’ Finance Minister Carole Taylor reports.

    http://tinyurl.com/29hjv7

    “We’ve talked about how the British Columbia economy is maturing and we’ve had some resilience on our own. But at some point what is going on in the States inevitably affects not just Canada but British Columbia.”

  35. coco

    Brink Forest Products Cuts Production …. 35 Jobs Cut

    http://tinyurl.com/2vtg8v

    British Columbia supplies 50% of lumber to the U.S.

  36. vanreal

    DaMann, The window blind man probably owns the company and makes more than you’ll ever hope to see

  37. vanreal

    If you honestly think that the citizens of Vancouver are going to allow increased density in their neighbourhoods then you are dreaming. It ain’t gonna happen folks. Even the east side is full of people now who aren’t going to tolerate it. Sam is going to get kicked out on his eco density ass.

  38. GM

    Coco, I just want to thank you for your wonderful links. I often find that they are the most interesting and informative items on this site. I appreciate your hard work!

  39. kris

    When prices were weak a few years back, there was alot of talk by the provincial gov’t about taking properties in the Valley under 10 acres out of the ALR. Since prices have dramatically risen, this has basically been a non-issue.
    If there is a “real” shortage of developable land, what gives?

  40. kris

    If the prices rose 16% in the 4th quarter of a 4 year cycle and declined by 16.16% over housing starts that had a +/- % factor of -16 1/4%………
    “It’s a buyer and seller market”. So buy and sell…
    Ever read the “Fraser Valley Real Estate View” front page comments?
    Who writes this crap? – A buyer /seller market?
    Who ever it is should at least have to complete the 7th grade.

  41. canyongal

    In response to Vanreal’s comment, “If you honestly think that the citizens of Vancouver are going to allow increased density in their neighbourhoods then you are dreaming. It ain’t gonna happen folks. Even the east side is full of people now who aren’t going to tolerate it. Sam is going to get kicked out on his eco-density ass.”

    I developed multi-family housing in the states for years, and much of the Eco-Density discussions in YVR are following or leading the same discussions in Portland and Seattle. It’s a reasonable discussion about how far away people are willing to commute from where they live, while fuel costs are very likely to become increasingly expensive over time. It’s also about lots of people who are wanting more leisure time given their work schedules, to play with kids and exercise, instead of drive, clean gutters, mow yards, etc. It’s also about acknowledging that life is going to change in the coming two decades, in ways over which we may have little control, but for which we can make some reasonable plans. These plans are unlikely to make most developers happy, because developers always want cheap land, lots of it, taxpayer subsidization for services to the sites, and will always protest any kind of urban growth boundaries. But heck, why should we have to live in the worlds created by the least imaginative developers — I grew up in Arizona where developers have owned government for ages, and people there are SOL when gas goes up or the water dries up, because those communities occupy huge land areas that should never have been opened to development. They are massive car cities, not livable, and probably not sustainable given imminent crisis affecting both water and fuel costs.

    If a large area of the westside is rezoned for duplex, it’s possible that many owners will create an additional unit on their own lot, in the same 3 – 5 year period. When lots of new units come on the market at the same time, westside prices could moderate. And the great part is, these units won’t have to include high-priced land costs as many owners have owned for quite a long time and could do well even at lower sales prices. Many of these would sell to adult children.

    The all-day Eco-Densite session I attended on the westside was a full house, full of affluent, well-educated people concerned that their own children would not be able to live in the neighborhoods they had grown up in, that the neighbourhood was increasingly just for the older folks. Others were employers, who were tired at losing good employees who just couldn’t take the commute from Poco, MR etc. Only one guy walked out because he was pissed. 1/200. Possibly the session attracted a certain segment and not the opposition, or not.

    The eastside is clearly a different story. Smaller lots, more illegal suites, very congested. Of course they don’t want more density — they’ve already got it. That’s why the current Eco-Density limits increased density to the major transportation arterials.

    And Sam…he’ll go out on his ass for so many reasons, Eco-Density is the least of it.

  42. Mightymouse

    Just thought I would share a memory…

    It was around 1998 or 99. We owned a 2000ish sq.ft town-home in the Simon Fraser hills area of Burnaby. Just so happened that the realtor sign hanger thingy was parked right outside our back patio area. I remember thinking at the time, that I should call the strata and ask them to put a limit on how many signs could be hung on the damn thing cause they were hung to the grass and draping across it… I also remember we had this realtor stalker who sent us Christmas cards, magnets, note pads, phoned out of the blue… dropped by when he was ‘in the area’.

    Our mortgage rate at the time was about 5.85% so rates weren’t too high…
    Was there less immigration back then? I don’t think so. Was there way more land back then?… Nope.

    From my couch economist perspective the difference now is the following:
    -CHMC has since changed the down payment required to nil, they’ve also lengthened amortization periods.
    -Loans are (were) easier to attain.
    -Psychology.

    Once the people who can take advantage of all of the changes have done just that, it will be interesting to see what will happen.

  43. News Flash

    “Read what the head REALTOR™ was saying about DC in late 2005. Sound familiar?

    BTW, prices down 20% in DC since the peak.”

    And the real numbers:

    Washington, DCVA-MD-WV

    1 year = -0.33 5 year = 82.86

  44. News Flash

    “Things will play out here exactly as they are in Florida.”

    Kind of like this?

    Miami-Miami Beach-Kendall, FL
    1 year = 3.45 5 year = 114.98

    Actually still up more than Vancouver over 5 years.

  45. News Flash

    “oh, this is gonna hurt big time…….”

    We can only pray we don’t get hit as bad as LA:

    Los Angeles-Long Beach-Glendale, CA

    1 year = -0.07 5 year = 107.86

  46. News Flash

    “The carnage is going to be bad.”

    I agree. After our inventory hits 50,000 like Phoenix we could see a similar crash:

    Phoenix-Mesa-Scottdale, AZ

    1 year = -0.74 5 year = 88.61

  47. blueskies

    nice cherry picking news flash!

    if MoM or YoY doesn’t work well
    try a 5 year time frame and a 10 year one

    since 1850 prices are up everywhere…

    which proves long term perma bulls are always right 🙂

  48. blueskies

    http://tinyurl.com/22nvde

    Instead the experts have been humbled by the depth and breadth of the downturn –

    from Phoenix:
    Phoenix currently offers about 55,000 listings, the highest in the Arizona capital’s history, in addition to an estimated 15,000 spec houses.

    “Builders have now dropped new three-bedroom, single-family homes as low as $130,000,

    it’s all good!

  49. Reknab

    Are there no Wednesday Numbers? What happened…..

  50. vanreal

    If you can get a 3 bedroom home in Phoenix for 130,000, just point me the way cause I want it.

  51. abc

    Newsflash,

    According to the S&P/Case Shiller Home Index Price up to Sept (released Nov 27) the YOY drops are

    Washington: -6.6%
    Miami: -10%
    LA: -7%
    Phoenix: -8.8%

    Notice that the regions I quote have no hyphens.

  52. News Flash

    “nice cherry picking news flash!”

    Miami, Phoenix, LA and Wash DC also have been discussed recently as having “crashed”. Too bad the numbers tell a different story.

    “Instead the experts have been humbled by the depth and breadth of the downturn ”

    I love solid data like this. Forget what the actual sales figures tell us.

    “from Phoenix:
    Phoenix currently offers about 55,000 listings”

    Yup 55,000 listing and prices still only down 0.74% year over year. I guess when Metro Vancouver hits 100,000 listing we should start to worry cause it looks like even 55,000 in a similar size market didn’t cause a crash.

  53. News Flash

    “According to the S&P/Case Shiller Home Index… ”

    They have been spinning a crash for 5 years now.

  54. abc

    Newsflash, your second-to-last message states that Phoenix, not some peculiar subregion of Phoenix, is down 0.74% YOY.

    Please provide a reference so that we can get to the bottom of this matter since I have provided data with a specific reference that it is down 8.8% YOY as of Sept.

  55. Disbelief

    #
    vanreal
    December 1, 2007 at 4:07 pm

    If you can get a 3 bedroom home in Phoenix for 130,000, just point me the way cause I want it.

    Here’s one but it’s a little lower than 130k….. 3 bd 2 bath 895 sq. ft 2644-N58th. It’s listed for $112,000… Fix it up and as the ad says it should be worth $190k… have at it!!!

  56. DeeDub

    Straight from Case-Shiller promotional material:

    …transactions with prices that do not reflect market value are excluded from sale pairs…

    Every methodology – including Case-Shiller – will introduce it’s own biases to the data. That’s not a criticism, that’s just a fact of life.

  57. abc

    Deedub, thanks for your comment. Taking average or median prices has little credibility to me, and for reasons that have been elaborated nicely elsewhere including Fish’s blog. The S&P/Case-Shiller is widely considered the most accurate way to measure valuation changes and while nothing is perfect at least it tries to take into account subtle factors such as reno and neglect. BTW, if you know of another index which is widely distributed and is considered as credible as the S&P/Case-Shiller index, that would be an interesting contribution.

  58. CC

    canyongal,

    your post was a breath of fresh air. calm, well reasoned, interesting. a marked departure from the relentless pap that people post here lately.

  59. News Flash

    abc:

    Go to Rob’s previous thread on November 29 titled “US Prices”. Hit the link labeled “chart”. You will find all the data there.

    There are plenty of people trying to spin a crash in the US. The fact is there are some weak markets but nothing has crashed yet. There is a lot of misinformation posted that is commentary by some biased person trying to spin a crash or media sensationalizing.

  60. Snick

    “There is a lot of misinformation posted that is commentary by some biased person”

    – News Flash

    You mean, like you?

  61. News Flash

    The average year over year price change in the US is +1.79% from the MSM chart.

    Even chicken little couldn’t call that a crash.

  62. Disbelief

    We are all just looking at the data the same data. And while the optimists are looking at it as somewhat differently than the realists and the pessimists. Yes there are people in the business that are spinning that the sky is not falling even when it is (not saying it is now, but such people will keep spinning until it has reached the bottom) …. What we all need to take away from this forum that the possibility of a major correction is likely. The fact is the prices are correcting in the US in most states which should be a loud alarm for us here in Canada to at the very least look at each investment with eyes wide open and not jump in with both feet…

  63. Disbelief

    And some more advice… watch your spending and don’t take any stupid HELOC’s to keep up with your neighbour who just bought that new Jag. Seriously there are a lot of very stupid people out there proving that you didn’t need to be smart to make money in Real Estate…. You need to be smart to hold on to it. A gain isn’t a gain until it is realized (SOLD) False equity is nothing more than that…

  64. DeeDub

    The S&P/Case-Shiller is widely considered the most accurate way to measure valuation changes…

    abc – I *like* the Case-Shiller approach, and consider it a perfectly reasonable thing to track. I just believe it’s important to remember that it presents a viewpoint based on data – not data itself. It has “proprietary” weightings applied to the raw numbers and even subjective filters on which numbers to include.

    Like I said, it’s not a criticism, it’s part and parcel of trying to construct a “one-number” snapshot of a complex system. Distortions are an inevitable result.

    I consider the numbers useful and valuable as long as the limitations are kept in mind.

  65. Crabman

    News Flash,

    I actually own a condo in the Phoenix area (Scottsdale). At the peak (spring 2006) units like mine sold for $250k. The last one to sell was last July for $229. That was an 8% drop, and nothing has sold since, even though 3 are currently on the market.

    As I posted in the US Prices topic, an intersting web-site to check out is:

    http://www.housingtracker.net

    It just data mines the current MLS listings for major US cities and reports averages and medians. Not as good as actual sales data, but it is updated every week. IMO this is much more accurate than the numbers you are referencing.

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