Monday Numbers

There were 102 new listings yesterday and 113 sales, for a sell/list of 110.78%.  There were 53 price changes. 

Inventory reached 10,054 (will we bust 10k the wrong way?), and over 90s hit 2,714 (26.99%).  

That’s a tough market, any way you slice it.  Inventory is low, making it hard for buyers faced with a stubborn seller.  At the same time, as the percentage of over 90s increases it would seem that someone making an offer on one of those listings (especially given the demonstrated tendency for them to be over-priced relative to comparable sales) should slash very hard on price.  With two pressures going in opposite directions I’d expect tough sledding for sales, at least in the short term.

Advertisements

28 Comments

Filed under Daily Numbers

28 responses to “Monday Numbers

  1. WoW

    Rob, the outcome is going to be ugly, 40 year amortization, zero down, come on – demand from the scruffy shoes set will stop once the pendulum swings, and hard it will swing. Its taking much longer than what I expected – so I’ve been wrong. That said, I’m renting a multi-million $ home for a FRACTION of what the full carry (including opportunity cost) would be…if ONLY my wife would see it my way!:))

    In any event, thanks for the update, I look forward to watching the spring market unfold…

  2. Mightymouse

    Well, I figured that it might be prudent to find out what Obama’s views on liquidity were now that Opera’s behind him…

    “Regulate financial instruments to protect home mortgages
    Q: [to Dodd]: The Fed lowered the discount rate for banks to address the mortgage crisis. Should they lower rates for everyone else?
    DODD: Yes, but we also need more liquidity in the market. It has seized up. You can’t get a mortgage in America today.

    http://www.ontheissues.org/2008/Barack_Obama_Budget_+_Economy.htm

    OBAMA: We do need more liquidity, but we’re going to have to not only help home owners who are going to be losing their homes as a consequence of this; we’re going to have to make sure that we’ve got the kinds of tough regulation when it comes to financial instruments to make sure that people who have saved and are trying to get their own home for the first time are not hoodwinked out of it. And, unfortunately, the reason that we haven’t had tougher regulation in part goes back to the issue of lobbying. This is where special interests have been driving the agenda. We have not had the kinds of consumer protections that are in place. That’s why, when we have this debate about lobbying, we have to remind ourselves it has very real consequences.”

    Very political… I’m sure his bail out program looks allot like Bushes.

  3. DaMann

    There shouldn’t be any bailout at all. Don’t people read contracts when they were signing mortgages?! Oh that’s right, it didn’t matter cause their house would be worth another $100k more the next year. Let em rot and the economy will get back on track sooner. Start with this bailout crap and it will prolong the agony.

  4. Tony Danza

    Mightymouse & DaMann,

    The bailout won’t help very many homeowners at all. It has conditions written into it that make it a bailout for the lenders.

    The most telling criterion that must be met to freeze rates is that the mortgage must be secured by a house with equity. Apparently most people unable to afford their mortgage payments have already refinanced all their equity away to attempt to pay the bills. Either that or they had neg. am. mortgages and are in the same boat.

    You can read more about this at the Calculated Risk blog or dozens of other housing blogs.

  5. vomitingdog

    Rob,

    What does very hard mean?.

    Faced with a new property asking $1.15 M + GST, recently down to $1.1M and still no offers, what would you suggest?

    I know what I’d like to pay: $950K but that’s more of a haircut than a shave.

  6. Annon

    Mightymouse, I think only Ron Paul has the true solution and that is to get rid of FED. Everyone else is just “business as usual”. Hillary is becoming almost funny as she started taking older and yougner family members out to try and win women’s votes. If you watch Youtube, you will see Hillary couldn’t keep enough audience interested in what she had to say at many of her speeches.

    In fact, if US gets rid of FED and becomes really prosperous, Canada will be among the first batch of nations to follow suit. That said, it will still take years before things get corrected.

    And while we are anxious about BoC’s rate decisions, lets not forget that 30 and 40 year loans are approved by government agencies. BoC’s mandate is to maintain price stability and look at where we are today. 30 and 40 year mortgage is NOT a solution to housing price issues. Isn’t this a sign that BoC is a big failure of what it was made to do?

  7. robchipman

    Vomiting Dog:

    Slashing hard, in my opinion, means being realistic about price and getting the best price that you can in any given situation. Its a good tactic for all buyers, but not to everyone’s tastes (do you really want to grind the crap out of the young family or the widow? Nor everyone does, even when its clearly in their financial interests. Some buyers are willing to pay more to feel good about their offer (and the reverse holds true for some sellers, as well).

    What is your target listing worth? Does that vary from the list price? If so, why? What is the seller’s motivation? Can you help him accomplish his goal at a lower price than list price? The answers to those questions change with each listing, obviously, but you want to try to find out.

    Finding that information is a lot of legwork. No Realtor worth their salt is going to do that without commitment from you that you’ll buy at a reasonable price, and without loyalty from you. Reasonable price means demonstrably reasonable in relation to the market at that time, because let’s face it: lots of bloggers here will argue that a “reasonable”price has no relation to what we see in the market these days. Loyalty means you won’t pull the plug on the Realtor after he spends thousands in time and effort on you.

    If you’re committed, loyal and realistic you’d offer the lowest price possible that would satisfy the seller’s needs (not his wants). That has no relation to the list price, really, but it must be related to the market in order to justify it to him and you. Your example: list at 1.15, drop to 1.1, you’d offer 950. Go ahead. Write the offer. If I’m the listing agent, and I already told the seller it was worth only $900,000, I’ll hammer him to accept. Are you getting a good deal? Did you slash hard? Or did you fall for a “No payments until 2009 and we pay the GST”sort of pitch? You think its cheap, but its really not. Comparitive market value is clearly critical.

    Once you look at it that way “slashing hard” becomes relative. With our investment/rehab clients we try to do it so that we can build profit into the buy side. Its always, always harder to achieve as much as you planned to acheive, meaning the great projected sale price turns out to be less, or the costs turn out to be more, or the income ended up somewhat smaller.

  8. coco

    Vomitingdog

    Is this a new property that a builder owns since you mentioned GST ?

  9. blueskies

    are there any short sales in Vancouver yet?

    how is the foreclosure market doing?

  10. DaMann

    “Slashing hard, in my opinion, means being realistic about price and getting the best price that you can in any given situation. Its a good tactic for all buyers, but not to everyone’s tastes (do you really want to grind the crap out of the young family or the widow? Not everyone does, even when its clearly in their financial interests. Some buyers are willing to pay more to feel good about their offer (and the reverse holds true for some sellers, as well).”

    Rob a may be reading this entirely wrong but are you telling me that the buyer should have a conscience when making an offer in a declining market? That it should be a consideration when making an offer? I’m failry certain I misread cause that would be beyond rich considering the gouging that has been going on with young families mortgaging their lives away in this flipper market of the last few years.

    Like I said. I must have misunderstood. Not once have I ever heard the buyers situation being taken into account when setting a listing price or accepting an offer. Out of 10 offers coming in I’m almost certain it’s the highest price with the least amount of clauses that gets the deal.

  11. blueskies

    (do you really want to grind the crap out of the young family or the widow?

    the seller will gladly grind the crap out of any buyer, widow or otherwise……

  12. vomitingdog

    Hmmm….

    I hear ya on the legwork. But isn’t that something I could do myself?

    Yes, coco, it’s a new listing. The developer has 2 units (a duplex) that haven’t sold for months. He’s just dropped the price by $50K. But if no one bites, is that really a price drop? And considering that no one has bit in the 4 weeks since the price drop, maybe the developer will become more realistic with time. Or maybe he’s 4 weeks away from selling at his price, who knows?

    Not to get on your bad side Rob, but why should I sign on the dotted line with a realtor here. All I can see is that if I get an agent to help me buy, I’m adding to what I will have to pay. And I don’t know how committed over the next few months I can be.

    How would the agent be able to help me find out what makes this developer tick more than I could do myself? I could guess and say that profit makes him tick. Or I could guess and say that he’s stubborn or has a price fixed in his head. Either way, he’ll either accept or reject 950K and his agent might even be more motivated to get a sale because he/she won’t have to split commission.

    And to make matters worse, I can’t decide if now is the time to sell our place only to owe a few hundred thousand more. To me it seems like buying a stock when the price is up. I know market timing is risky but isn’t that what life’s all about?

  13. Snick

    “Rob a may be reading this entirely wrong but are you telling me that the buyer should have a conscience when making an offer in a declining market?” – DaMann

    Oh, come now. Conscience? Him?

    I think you were reading it entirely wrong.

  14. robchipman

    vomiting dog:

    Like all real estate work, you can do it yourself. The challenge is: can you do it as well as a professional who does it all the time? If so, why don’t you do it full time as well? If you think it through I think the only reason you’d do it yourself and not do it as a profession is because on your own you save some money and the gain is not taxable. Otherwise, why not do whatever you do to earn money (get some overtime, sell some more stuff, moonlight, whatever) and use your time more efficiently. Right now, after all, you’re wondering about the value of these places. That has to tell you something. Give the information to Jeff, for example, and see how long it takes him to give you an answer.

    Think about this as well: how experienced are you at assessing value? How good are you at doing it? How good are you at discovering a vendor’s motivation? Will a listing agent look at you the same way as he looks at another Realtor? Will he share info the same way? How good are you at negotiation and keeping emotion out of the process?

    Why sign on the dotted line? Because its clearly in your interest. If you can’t see that it is, don’t sign. If the Realtor can’t explain why it is in your interest, don’t hire them. You want someone who can assess value better than you, who can negotiate better than you, who can find out information better than you, and who will take better care of your interests than you. If you’re not clear on that, don’t sign.

    You’re really playing around with the old question: why pay a Realtor what the market has determined is a fair wage when I can clearly see that its easy money coming out of my pcoket? The point is, of course, that the market reaches its conclusion in a skewed way (most Realtors starve) and its not easy money. Get a good Realtor and and get value, or, if you can do the job, turn pro.

  15. Jeff

    Rob:
    Very good explanation of why to use a Realtor and the value of a good Realtor.
    I know how incredible hard and smart I work and it bothers me a bit when people think our job is easy or that we’re overpaid.
    I think that a good Realtor can earn a good living but we also work very hard for every dollar earned.

  16. Snick

    “I think that a good Realtor can earn a good living but we also work very hard for every dollar earned.” – Jeff

    Do I detect the stirrings of self-pity? No realtors I know of gave a damn when times were a’boomin’.

    Everyone else works hard, too.

  17. robchipman

    DaMann:

    You read more or less right. I didn’t (and don’t) say that you should have a conscience. That’s your business. But some people do consider things other than cash. Considering things other than cash doesn’t make you Mother Teresa. It just means that a deal consists of more than cash.

    Consider your own statement:
    “I’m failry certain I misread cause that would be beyond rich considering the gouging that has been going on with young families mortgaging their lives away in this flipper market of the last few years”.

    If you were selling, and you felt that young families were being gouged, and you were considering competing offers, would you gouge the young family or take the higher offer from the old rich guy who planned to suite and rent out the house? Would you and your wife perhaps get a little teary eyed as you compared their little nipper with your baby photos on the mantle? It happens, believe me. ast summer I saw it happen to the tune of $15000, and trust me, the sellers knew exactly what they were doing. Hard nosed Asians with sunglasses and Gucci bags lost to an Asian family with two little kids. Go figure.

  18. Jeff

    Snick:

    I guess I’m different because I always give a damn.

    I know how hard people work, I worked as a corporate financial analyst for 6 years before becoming a Realtor.

    Please just acknowledge that most Realtors are just trying to scratch out a living like anyone else.

  19. robchipman

    Snick:

    “Everyone else works hard, too”?

    Really? Some people don’t work harder than others? Some don’t float? Some don’t have cakewalk jobs? Funny, that hasn’t been my experience. I mean, when “everybody” works hard, is anybody working hard? What’s “hard”mean in that sense? Hard like breaking up freighters on the beach in Bangladesh? Or hard like doing office work on a cold day?

    “when times were a’boomin’”

    Times are booming now. Markets have been better than this, true, but not very often. If you think this is a bad market you have no real experience.

    I think Jeff and I are both saying that when you use a Realtor, make sure you get value. Not all Realtors are the same. There’s no self pity in that. That’s a call for smart consumers and competition.

  20. Snick

    Take a hike, creep.

  21. confident

    Snick, you are wasting our time with your thoughtless comments, negativity and abusive tone.

  22. Strataman

    Take a hike, creep.

    Snick follow your own advice.

  23. $fromA$ia

    Snick your not a Jackass but your being a Dick.

  24. $fromA$ia

    Rob, when I sold my house it was to a single mom with three kids. After 6 months I went to my old house to get the mail. She came to the door with a really upset look on her face. Apparently here tennant started a grow op in her suite downstairs. Anyway the city got involved and she had her hydro cut off and she was stuck with the clean up and fixing costs while the Prick renter walked.

    The good news is that she sold the house a little while after and pocketed $20k.

  25. jesse

    “[L]ast summer I saw it happen to the tune of $15000, and trust me, the sellers knew exactly what they were doing. Hard nosed Asians with sunglasses and Gucci bags lost to an Asian family with two little kids. Go figure.”

    I can believe this too and I too have seen it happen. It isn’t always about the money. In that case it could have been the seller doing a favour for his neighbors. It could also have been the seller didn’t trust the higher offer was real — a common trick is to make an offer then find deficiencies galore in an effort to ratchet the price back down. Even with agents acting as mediators you need to trust the other side.

    I always like to think good people get better deals in the end.

  26. coco

    vomitingdog,

    The builder has to pay a carrying costs every month that this duplex doesn’t sell.

    If the builder is desperate to sell and the carrying costs are starting to hurt, the builder will reduce the price again and again.

    I have seen some builders reduce 100k – 200k if their homes are taking too long to sell and they are getting cash crunched on their carrying costs.

    A realtor told me it is best to include the GST in your offer when purchasing a new home.

  27. tqn

    “Do I detect the stirrings of self-pity? No realtors I know of gave a damn when times were a’boomin’.”

    You got treated the way you treat others. It’s a fair game!

  28. robchipman

    $:

    “Apparently here tennant started a grow op in her suite downstairs. ”

    Its a surefire way to wealth, right? Start a grow op in your basement suite! 🙂 Unreal.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s