Wednesday Numbers

We’re back on the previously established January track: 226 new listings today and 70 sales for a sell/list of 30.97%.  How low can it go?

Inventory climbed to 8,285, of which 2,371, or 28.62%, were over 90s.

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30 Comments

Filed under Daily Numbers

30 responses to “Wednesday Numbers

  1. tommy

    Rob by the way it is wednesday .

  2. WoW

    Thanks Rob. Glad (as a bear) to see the listings surge (would you define it that way?).

    Have a great day (another sunny one….)

  3. Snick

    Rob,

    Quick question. Did you or Aaron Best happen to share your “thoughts” about where our market is headed with the chump who bought that dump on King Albert St. in Coquitlam?

  4. Newcomer

    Snick, that’s an odd question. Why would an agent representing the seller counsel the buyer?

  5. WoW

    Rob, with homebuilding in the US at a 27-year low, couldn’t we import cheap tradespeople from the US to help with our booming construction industry? And the more construction jobs, the more robust the economy, the more RE goes up, right? Hmm, maybe not.

  6. AmPa

    Sales have slowed down because the investors all made money big time last year, and so they extended their holidays.

    Just wait till they come back in March. I predict 46% increase in condo prices this year for Vancouver area, and 53% increase for Coquitlam.

  7. WoW

    AmPa, with your doctorate in RE trends, how can anyone in their right mind doubt your prognastications.

  8. An

    WoW, will AmPa’s prediction be closer than your 13,000 inventory made during the summer?

  9. WoW

    I doubt it. Good point An. The interest rate hike drove buyers into the market, then the reversal of interest rates caught me by surprise (somewhat), and delayed the invevitable, imho. But thanks for calling me out on that, you are probably right, perhaps AmPa is right on the MONEY, eh! Guess you should get off the internet and go talk to your local friendly RE agent and buy away. Have at ‘er.

  10. BOBBYBEAR

    Vancouver is a leaf on the tree. When the tree starts to tremble….watch out.

  11. blueskies

    Ampa:

    I predict 46% increase in condo prices this year for Vancouver area, and 53% increase for Coquitlam.

    you forgot the “-” and the “.” in both figures

    s/b -4.6% and -5.3%…… too much caffeine?

  12. Newcomer

    “Vancouver is a leaf on the tree. ”

    Well said. In economic terms Vancouver is entirely dependent and reactive, simply because it produces nothing, which is to say that it does not generate any wealth of its own. It is completely unprotected from external trouble.

  13. hello

    as low as 10% i’d say

  14. Grin and Bear It

    Over 90’s still seem rather high. I haven’t kept close track of them but they seem to be up there. Am I wrong on this one?

  15. blueskies

    Bush, Bernanke back plan to stimulate weakening economy

    http://tinyurl.com/256jyz

    excerpts:

    …..economic stimulus package to avert recession

    …..that to deal with this softening in the economy

    ……deepening economic crises that has shaken much of the nation

    a good if somewhat sobering read…..

  16. robchipman

    tommy:

    Thanks!

    Snick:

    A smart guy like you should know how agency works, and should be aware of the ethics involved in agency relationships.

    It would be unethical of me to try to insert myself between a principal and their agent, regardless of the motivation.

    The buyer retains an agent for that agent’s advice, not mine. If they wanted my advice, they’d retain me.

    My opinion of where the market is going is simply that: an opinion. You shouldn’t confuse opinion with fact. A buyer always has the option to hear an opinion, identify as such, and govern his actions accordingly (i.e, proceed or not proceed). After all, my opinion (or for that matter, yours) may be wrong.

    I think you’re missing another point. You don’t know the buyer’s motivation anymore than I do. Its possible that the buyer also feels that the market is due for a correction of some sort, but feels that it will be later, rather than sooner. It could be that the buyer will reno and flip the property on the basis of purchase price plus value added. If so, my opinion of what the future holds is moot; the buyer has already factored that possibility in.

    Last point: you call the buyer a chump, and call the property a dump. You said pretty much the same about 1060 Hoy Street last year. Bought in May ’06 for $355,000, sold in December for $413,000. You were wrong then. Whatmakes you right now?

    WoW:

    A robust ecomony is a positive for real estate prices, certainly, but I’m sure that there isn’t a direct correlation. I’m sure that we can see low, and even falling real estate prices in some robust economies. Why not? In other words: strong economy = usually good for real estate, but not necessarily the deciding factor.

    Do you agree with me or not? 🙂

  17. robchipman

    Blueskies:

    We’re seeing what I predicted, right? CBs will seek to avoid recession, and instead embrace the danger of inflation.

  18. WoW

    Rob, I agree with you on one thing quite strongly – that THE CURE FOR HIGH PRICES IS HIGH PRICES…this is something that should be taught to all grade 12 students and construction worker alike.

    Your stats and comments are always appreciated, please don’t take all of my counter arguments personally, I enjoy the tete a tete. That said, I believe, as you do, that fundamentals are out of whack, and market forces eventually will right this. Either by rents moving up DRAMATICALLY, or the other option, we know what that is. AmPa of course has a different opinion…

  19. WoW

    I should add, should be taught to RE agents as well. Not all of them understand this. But they do understand that getting the deal done = commissions, without doubt.

  20. robchipman

    WoW:

    I don’t take the comments personally. What mystifies me is how someone like you can assume that the short term gain will outweigh the benefits conferred by a sustainable business model, and then state the asssumption as if it were fact. Curious, no?

    At the bottom of the whole subject I think that you and I (and for that matter -A-) agree on an awful lot more than some would care to admit.

  21. WoW

    Thanks Rob. My comments on ‘some RE agents’ is NOT AT ALL directed at you – I hold you out (albeiet we haven’t met in person, but I have some insight to you via this blog) as one of the few (not to say that a lot don’t, but my view is that MOST don’t) RE agents that adds real value. You will make money in good markets and bad markets. Perhaps more in good than in bad, but you see where I’m going. I betcha thousands of would-be long-term RE agents, who choose this career to help folk’s “realize the dream of home ownership” will not be in the biz 3 years from now.

    At the bottom of the whole subject I would confer with your opinion.

    Cheers.

  22. WoW

    Oh yes, Rob – not to push the envelope, BUT….if you had to BET on RE direction over the next 12 months, how would you lay your bet?:))

    Assume: 5% downpayment, on an investment property
    Reasonable assumptions on interest rates, and RENTAL NET (if ANY) cashflows

    What’s the outcome – if the investor makes 5% on the ppty (sale/net rent, etc.), he/she is up 100%. If they are likewise down 5%, they lose 100% of their investment (oh, the power of leverage)?

    I open the question up to the board, for fun. If this scenario played out in Alberta over the past 6 months, its a potential bankruptcy outcome, as the losses sustained would have been well in excess of the original investment.

    That said, I’ve been astounded by the gains made in this market, wish I had made a few million on it…oh well, missed it, maybe next time.

    Now – bets, everyone…

  23. AmPa

    WoW, you can still make millions. Come and buy some of my Spectrum assignments.

    Only $550,000 for a 480 square foot. That’s a small price to pay to live right by stadium, and the safe injection site is within walking distance.

  24. blueskies

    Assume: 5% downpayment, on an investment property

    any investment property would require 25%+ down unless you have a very cozy arrangement with the bank….

  25. WoW

    AmPa – let’s meet and get the deal done!:))

    I couldn’t pay you that for your place, as you and I both know it will be up 55% in 12 months (that’s your guess, isn’t it!:)). It wouldn’t be fair of me to take your future profits like that.

    Good luck with it.

  26. WoW

    blueskies, I don’t know exactly what can/can’t be done as I own no RE right now. I had thought CMHC was allowing little if nothing down, even on investment ppties? Perhaps I’m mistaken on this.

    AmPa – hmm, a bear in bull’s clothing? Welcome to the dark side!:))

  27. blueskies

    I had thought CMHC was allowing little if nothing down, even on investment ppties?

    as far as i know they will add 300 basis points to the mortgage to cover the insurance on default on a no-down property purchase, but 300 basis points would make the deal a money losing proposition cash flow wise….

  28. robchipman

    WoW:

    First, I’m on record already as having predicted single digit increases this year. Second, 5% down around here has almost always translated into neg cash flow. 25%-40% is more likely. Third, I’m sticking with buying what you can hold – if the market goes up 5% and you’ve put 5% down you’re up 100%, true, but on $400,000 that’s a $20,000 profit. $15,000 of that goes to commission. You paid PTT in the beginning. You’re behind already. Clearly, if you want to make 5% net, after costs, in one year, based on the face value of the property, you need more than a 5% nominal increase.

    But aren’t you speculating about the best way to use a tennis racket in a hockey game? The idea is to buy good product on favourable terms, hold long term and have other people’s money pay for the use of other people’s money, all underpinned by your covenants and a capital contribution, right? Its not “buy, hold one year, and sell no matter what”. For your set up to be a potential bankruptcy scenario in Alberta the player has to be someone who should never have been in the game.

    Blueskies:

    You’re incorrect. The days of the 25% down requirement are long gone. When you talk about an insurance premium you’re already talking about less than 25% down, and that’s insured. In my experience most investment properties are easy to finance (as in, easier to finance than principal residences).

  29. WoW

    Rob…Rob, Rob, Rob….Rob, Rob, Rob…how do I put this…hmmm…ummm…hmmm….don’t you realize that a lot of folks in the pool can’t swim? They just don’t realize it yet, because the water level has been low for so long – let’s see what happens as it rises. I presume many will drown. As the pool empties, be assured that I will dip my toe in.

    Logic and emotion are two different things. We both AGREE that fundamentals (let’s call this a logic based ptofview) are not supported. Could this market be underpinned on emotion? Ever heard the cliche, that there is a thin line between love and hate? Let’s see what happens if/when it gets crossed.

    In every market, all through history, this line has been crossed. It will be crossed here – eventually.

    Rob, there are a lot of naked hockey players on the ice. And they have no idea what the rules are. Even you must know this. Or, perhaps, the masses have it right this time, utopia at last. Above median price increases (and above rent/income, etc. etc. etc. etc.) forever. Are you and AmPa roomates?

    Ha ha – tete a tete. Work on your arguments, and base them in logic, and historical human reactions.

    Fear and Greed. And Fear.

  30. robchipman

    WoW:

    Back the truck up. Base my arguments in logic? Historical human reactions?

    You asked what would happen if someone bought with 5% down, in the face of contrary fundamentals, witnessed a downturn and was forced to sell, and concluded that they’d be facing bankruptcy. I simply pointed out that people shouldn’t put themselves in that position. Still, your basic premise lacks a bit of logic – how do you go from a neg cash flow investment on day 1 to bankruptcy on day 365? Aren’t you leaving out some pretty important assumptions and ignoring some pretty common safeguards and obstacles?

    I don’t have a lot of personal experience with people in the position of not being able to swim (if you work with me I won’t let you do it). The people that I see buying investment real estate can hold. The people I see buying primary residences can also hold. (Both statements assume that nobody suffers a crippling injury, divorce, death int he family, etc). I’m interested in repeat clientele, so their loing term financial health, as well as their opinion of my advice, matters to me. Qualification is important, which is why I’m pretty quick to the personal questions (“How much cash do you have for your purchase, and where did you get it?” kind of thing).

    I therefore have to ask: when you ask me whether I realize ” that a lot of folks in the pool can’t swim? They just don’t realize it yet”, where do you get that info? Is it fact? Anecdotal? Opinion? My info on it is clearly anecdotal – I only know the people I represent. Where is your info coming from?

    What is going to happen that will force these guys to sell should we have a downturn in prices, and what is going to allow them to sell? Remember, wanting to sell at a loss requires that a) you don’t mind taking the loss and b) that you have the cash on hand to take the loss (you can’t transfer title on a mortgaged property without paying off the mortgage and associated transfer costs). Its easier, in other words, to realize a paper gain than it is to realize a paper loss.

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