Monday’s Numbers

There were 229 new listings yesterday, and 98 sales, for a sell/list of 42.79%.  Inventory hit 9,364, of which 2,324,  or 24.81%, were over 90s.

I also received an email today promoting brand new Orlando 1 bedroom condos for between $195,000 and $205,000.  Who’s ready? 🙂

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111 Comments

Filed under Daily Numbers

111 responses to “Monday’s Numbers

  1. “It looks like this…

    First, the multiple bids end.
    Second, sales slow and inventory builds.
    Third, builders offer incentives.
    Fourth, the resale market also start offering incentives, burying St. Joseph and probably praying to St. Jude, or bargaining with their gods to get them out of this mess and they will never fool with real estate again.
    Price cuts and more price cuts.
    Rinse and repeat.
    Prices eventually stall when seller wishing prices drop to what they owe, and no fool has rushed in to bail them out.
    Foreclosures spike.

    All downhill from there, baby.”

  2. coco

    Thursday’s and Friday’s numbers would be nice too.

  3. coco

    That should be Wednesday, Thursday & Friday.

  4. robchipman

    coco:

    They probably would be nice, but I didn’t have internet access at the cabin you see in the new masthead picture. Sorry 😉

  5. coco

    “I also received an email today promoting brand new Orlando 1 bedroom condos for between $195,000 and $205,000. ”

    Quite highly priced considering an entire house is being auction for about the same price or lower.

  6. coco

    Personally I don’t like all the crime in Orlando.

  7. beans

    This is not meant for anyone in particular, but what is the point of publishing/posting daily sales-to-new listings ratios for trend analysis? While some would disagree, we are looking at an industry with high transaction and search costs, assymetry of information, and many other issues that are unlike stocks. Real estate cannot be traded on the market instantaneously, trading volumes are so small on a daily basis and can be thrown off by so many factors including weather.

    Analytically speaking, there is no way to monotonically transform this data to obtain a strong trend. Time series can only be seasonally adjusted if they are monthly or quarterly. Even weekly data won’t do.

    This is just my two cents on what seems to me as garbage in garbage out in many cases. No offense Rob, I do enjoy this site and I think many of the posters bring up some valid anecdotal evidence and good arguments. However, what is lacking is hard and defendable data outside of these daily variables, MSM newsfeed, etc. Statistics Canada has a lot of relevant data that people here have not looked into.

    While many here lambast the supposed industry shills people on their analysis and comment, at the least they are commenting using alot of hard numbers. This was of course an uncarefully worded rant, but the point is that daily numbers don’t mean much in real estate, volumes aren’t high enough for there to be a “technical trading” method.

  8. coco

    I forgot to mention the home insurance rates in Orlando are very high too.

  9. Newcomer

    Bottom line, inventory is flat after end of the month delisting. It still feels a long way off. We are not even at “ballooning inventory” yet. Would folks just hurry up and capitulate already!

  10. Strataman

    beans Statistics Canada has a lot of relevant data that people here have not looked into.” Says who? Ever since I have looked at this site all relevant data are examined regularily, including stats Canada. I find even daily stats interesting without assigning a trend to it which by the way few people on this site do. For instance a particularily beautifull sunny day appears to be a prime time to sell, whereas a rainy crappy day apparently isn’t. Long weekends seem to be dead either way, and finally a lot of people on this forum have fun with it? So whats the problem? It’s the numbers!

  11. Dignan

    Anecdotal…..

    MLS®: V669175

    They’ve just reduced the price to $2,988,000, this house sold in May 2005 for 2,600,000. Hmmmm.

    I know another House in Went Van that is selling for the same price it was listed for in 2005 as well.

  12. Snick

    “I also received an email today promoting brand new Orlando 1 bedroom condos for between $195,000 and $205,000. Who’s ready?”

    That’s certainly “no deal”. Last summer in the Orlando area, we saw brand NEW SFHs listed at 160-175K.

  13. SC

    Thanks for the numbers, Rob.

    I will pass on the Orlando condo. I rather have my money invested locally. Too much uncertainty in Florida. With so much glut in inventory, it may be difficult to get a stable tenant let alone a high possibility of continuing decrease in prices.

  14. Cool Guy

    Do you believe in what economist predict???
    Here is the prediction in Thursday, July 28, 2005:

    A new report by the TD Bank Financial Group says Vancouver and Victoria are the two Canadian cities at greatest risk of a potential housing bubble.

    WTF? Make sure you get a hard copy of it before they take it down!!! It’s almost 2.5 years passed since then. Properties have gone up by 40%. Sometimes they are paid to produce phony reports.

    http://tinyurl.com/2amwer

  15. -A-

    Rob, Bean is trying to tell you the same thing I keep telling you; simply put, your numbers don’t mean anything.

    The numbers are meaningless and redundant, but the dog show is entertaining.

  16. beans

    Thanks -A-, I didn’t want to be harsh in saying the numbers are meaningless. Not to say I agree with all of your views here.

  17. -A-

    beans, your welcome, and I am glad you don’t agree with my views, but doesn’t mean I don’t value yours.

  18. robchipman

    Get a room, you two!

    Beans: can you predict the future from the daily numbers? No. Can you get a feel for what the market is doing right now? Absolutely. When we see 100% + list/sells I can predict more multiple offers and higher success when pushing prices.

    Can I predict when the bubble is going to pop, as som many desire? Again, no, but I think that’s a mug’s game anyway.

    The daily numbers tell you what actually happened. There’s no arguing that. They’re tracks in the sand. They’re factual. They’re verifiable. What you make of them is up to you.

    Every day through January you saw lots of listings come on line, low sell/lists and an inventory that grew, but didn’t balloon. Are you going to be surprised by January’s results on prices and volumes? (And that’s not prediction – its just math).

  19. -A-

    Rob,

    “Can I predict when the bubble is going to pop, as som many desire? Again, no, but I think that’s a mug’s game anyway”

    Freudian slip- do you think there is a bubble to pop.
    Watch Rob dance.

    Actually some might have missed the other Freudian, slip, the one about the room- I’m not in the least interested in anybody whose name is Beans, but Rob is either aroused or interested.

  20. Cympl

    “This is not meant for anyone in particular, but what is the point of publishing/posting daily sales-to-new listings ratios for trend analysis?”

    It’s called housing porn – watch Home & Garden sometime. It’s not about the math. Everyone’s into real estate, tracking prices real time etc…just like the stock market in, oh, 2000.

  21. Strataman

    Rob; “but I didn’t have internet access at the cabin you see in the new masthead picture” How did you enjoy the stay at my cabin? 🙂

  22. Snick

    I don’t know about Rob, Strataman, but I was concerned about those frayed towels in the bathroom. They were a tad dingy, too.

    Not to mention the inordinate amount of fluff buildup under the bed in the smaller bedroom.

  23. Strataman

    Snick “Not to mention the inordinate amount of fluff buildup under the bed in the smaller bedroom.”
    Snick!!! Thats the outhouse!

  24. $fromA$ia

    Sigh, more wishfull thinking…….

    Sorry guys the crash/correction is nowhere near on the horrizon. You’ll have to vacate and begin comments after 2010.

  25. $fromA$ia

    Oh I must be Dumbnuts for not knowing that Strataman is a good standing rentor that takes very good care of his landlords holdings.

  26. $fromA$ia

    Silly ball diddler, mayber if you steel your landlords wife you can have a go at half his assets!!!

  27. robchipman

    -A-:

    That’s it, -A-, Freudian slip. You caught me. I secretly know that you’re right – I just can’t admit it.

    Can you remind me again what it is that you’ve been saying? Is it a crash of a specific magnitude by a specific time, or is just that I’m an immoral psychopath? Or is it both?

    (Predicting when the bubble will pop is a mug’s game because whether there is or isn’t a bubble is irrelevant. Buy any real estate anytime when the metrics are good. Why would you worry about a bubble, as opposed to, a Tamiflu resistant strain of H1N1?)

  28. alexcanuck

    BTW that cabin looks great. Is that where you were? Don’t ever forget the difference between the monetary value of property and the weekend at the cabin ( or your idea of a perfect weekend away) Two different worlds, don’t mix them up

  29. Strataman

    $fromA$ia
    “mayber if you steel your landlords wife you can have a go at half his assets!!!” and 100% of his liabilities? Not on your life! 🙂

  30. robchipman

    alexcanuck:

    That cabin’s on a friend’s ranch where we spent one afternoon and night (green horse threw one guy in the snow leading to excessive usage of the term “horse whisperer” 🙂 ); we then took off to another ranch and played some pond hockey.

    You’re right about valuations, btw.

  31. -A-

    Rob, Cheap shot, I noticed you tend to bite, scratch, and even go for the sand in the eyes when you’re on the matt.

    Confirms my suspicion about your sense of right, wrong, fair play and all those other intangible principles you probably will never understand.

    I am not a certified clinician, but in my view you do exhibit sociopathic tendencies.

  32. satv

    Just another example prices are steel at 742,494 with low low interest rates we are still at rock bottom prices Vancouver B.C.Rocks.

    *Investor from with in provinces of Canada,America and Overseas are buying in Vancouver.*There is no mortgage problem here as *real estate is poised to *virtually never go down.*Consistently ranked in the top cities of the world.*Future olympics city,Very limited *’land mass’everyone have desire to live here and watch rain in *’High Defination’ on *I-MAX original screen.*No down turn in site for decades to come.Vancouver B.C with *more slot to go UP in the *BEST PLACE ON EARTH*. http://www.bc150.gov.bc.ca

  33. dingus

    Cool guy

    Yes, two and a half years ago, a bank said we were ripe for a fall.

    What does that say about where we are now? Conditions have improved? Or we are Wile E. Coyote (are you in, genius?) hovering in mid air, having sprinted off the cliff, oh, two and a half years ago.

    And are you suggesting some bear paid TD to write that report? That makes total sense!

  34. hgit

    Beans

    I think the numbers that Rob posts here are very useful. (It would be good to have more data points and a lot more historical information – but Rob gives us what he can and that is better than nothing.)

    At the end of March we will have two complete years worth of historical data from the same reporting area. Tell me how that cannot be an advantage when trying to predict (or guess) what might be going to happen?

    I agree that the information presented here is not enough to “trade” on. But I would not discard it as “garbage in” because of that. It is one stream of knowledge to use in developing an investment strategy.

  35. News Flash

    Jan stats out…detached up 1.65% month over month.

    I wonder what the Spring will look like?

  36. domus

    “I wonder what the Spring will look like?”

    I wonder what the next 5 springs will look like……

  37. Dmello

    Rob.

    Back to my question i asked before you left…
    Ive been seeing quite a few listings come back online this year that were apparently Sold last year. They can’t be flippers as most of them are only 2-3% more than they sold for, some less. Did these places really sell? and if not, is it legal for a realtor to mark them as sold on MLS even though they didn’t ever really sell?

    Here is one example… I can dig up more…

    #3008 1199 Seymour St.
    originally listed mid last year and marked as ‘SOLD’ in November for $874,900.

    http://tinyurl.com/yvthuv

    Now, here is is listed again today for only $25,000 more?

    http://tinyurl.com/ytxnj3

  38. $fromA$ia

    Ha all of a sudden theres life to the market and SATV makes a showing.

  39. blueskies

    total REBGV listings per pauls’ site:

    10048

    I wonder what the Spring will look like?

  40. Strataman

    “Ha all of a sudden theres life to the market and SATV makes a showing.” I think thats more because he is being driven out of Vancouver Condo Info quote “Thanks, my eyes have been filled now get lost!” one of many! 🙂

  41. -A-

    Hgit:
    “It is one stream of knowledge to use in developing an investment strategy.”

    Save yourself some time and effort and just burn your money.

    Rob’s bogus and amateurish data is as useful as a horoscope.

    Rob is a good BSer, and probably makes a good living at it, but don’t take this nonsense too seriously, after all wouldn’t all those gluttonous bastards in the US and the NAR have had this type of data available to them?

    And why did the lazy, ignorant, and greedy fools get burnt by Vancouver’s previous boom and bust real estate manias? Was it because Rob wasn’t around before?

  42. blueskies

    “It is one stream of knowledge to use in developing an investment strategy.”

    stream of knowledge = sh!t creek
    developing = no paddle
    investment strategy = run for the hills!

  43. blueskies

    Save yourself some time and effort and just burn your money

    🙂

  44. beans

    Hgit,

    Just to clarify, I am not saying that people don’t find Rob’s figures useful. Obviously people on this site enjoy them and feel they are valuable. What I am saying is that statistically speaking, and really economically speaking, the figures do not amount to much. I explained above that daily real estate figures cannot be compared to TSX or Dow trading due to low volumes, hidden information, heavy transactions etc. Statistically, you can’t adjust the figures to get rid of Easter, trading days and seasonal effects. As a result, you can’t extract the trend from “other” factors. A time series of daily figures (even two years) is no more and probably less useful than some lower frequency data (i.e. monthly), unless you have a great technical trading systems as used by some in the stock market.

    I am stating this as fact to provide information. I have no reason to become confrontational with anyone on this board. By the way -A-, I don’t think that Rob is trying to BS or lie to any of his clients or us. I think his message has been pretty clear, buy if you are comfortable. Also if it is for an investment, it probably isn’t the best time. Current metrics may not be at “optimal” levels”, but if people really want to buy, they will, and if they don’t, they won’t regardless of what Rob advises. Real estate for most is mostly an emotional choice, the “math” comes second.

  45. -A-

    “It is one stream of knowledge to use in developing an investment strategy.”

    This is the dichotomy that baffles me, on the one hand the writer is lucid, and yet is foolish enough to take Rob gibberish seriously.

    There are learned people with PhD’s who bet against crack pots like Rob, and were ridiculed, but eventually vindicated.

  46. -A-

    Beans, you would need at least 10+ data points for it to be remotely useful, and then there is the human greed and fear factor, which might just crowd out any rational value the “hard” data may reveal.

  47. Mullet

    Interesting piece on Phillips, Hager and North’s website http://www.phn.com about the Canadian housing market. Patricia Croft is a highly respected economist and has made bearish comments in the past. No longer it seems.

  48. Skeptic

    Interesting article, mostly lost on the current audience though 🙂

    Inventory is 3% higher this year than same time last year (figures from Rob’s old blog). When are these cracks going to start appearing ? Ballooning inventory starts when ?

  49. Anonymous

    “Ballooning inventory starts when ?”

    Usually when you least expect it……enjoy as it lasts!

  50. BOBBYBEAR

    1.Canada lags the US
    2.Canadian dollar has peaked
    3.Oil has peaked.
    4.Gold has peaked
    5.Stock markets have peaked
    6.Employment has peaked
    7.Plunge Protection Team will be very busy
    8.Interest rates will fall
    9Economy will deteriorate
    10.CMHC will help delay the enevitable

    I could be wrong…but in case I am not……

    GOD HELP US ALL

  51. BOBBYBEAR

    I hope gold has peaked for awhile at least…..if not.. oh no

  52. robchipman

    Mullet:

    Interesting article. Like you, when I think PHN I think Croft, and recall her bearish comments on housing. I certainly didn’t expect what I read there; I’m not sure she wrote this article, mind you.

    Certain bears on this blog better not read it – it will drive them absolutely nuts!

    Beans:

    I’m no statistician, obviously. For the life of me I can’t see how anyone would try to predict what the market will do further out than a few days, or possibly weeks based on our daily listing and sales counts. I wouldn’t try to compare them to Dow or TSX daily volumes, either. I can’t see the sense of the comparison and don’t know what the application would be. I’ve never been a believer that seasonal effects are as huge as many argue (aside from a Christmas slowdown).

    I’ve been amazed by the emergence and development of the bear/bull debate and the fixation with predicting the future of the market. Prior to stumbling across VHB’s blog I had never heard of a real estate “bear” or “bull”. The concept still doesn’t make sense to me. I’ve seen more people lose from trying to market time than win (its sexy, sure, but its delusional).

    If you buy real estate when the metrics support the decision, and you buy real estate that you are fairly certain you can keep rented, and you buy long term, market timing and predicting the future become pretty insignificant.

    The daily numbers, for me, have always been a way of seeing what the market did. Not what it will do, but what it already did. Past vs. future. You can even go so far as to argue that it shows the present, but for the life of me I can’t see how someone can argue that sales and listing history will light up much of the future. Let’s be frank: after years of looking at daily numbers, has anyone around here have a winning record in any prediction department, at all? Anyone? Where are the 15,000 listings? Where’s the rush to the exits? The next comment will probably be the tired refrain “Just because I haven’t been right yet doesn’t mean I won’t be right someday, Mr. Wile E. Coyote!”. The record speaks for itself, and its not impressive. The only safe prediction is that no matter how closely we look at the chicken entrails, this market will confound most of us on a consistent basis.

    So, what’s the point of daily numbers? Pretty simple. For me, it lets me advise my clients and agents. It 4 out of every 10 listings is selling, and I can demonstrate that, its easier for me to get a seller onside with pricing, and easier to get a succesful sale. If we have a 100%+ rate, its easier for me to convince a seller to shoot a little higher. If the seller can see those numbers its easier for him to believe me.

    On the buy side, with a 100%+ sell/list, I can explain to buyers what they’re likely to run into during the buying process. Multiple offers make more sense when you can see that demand has recently been exceeding supply. By the same token, I’ve submitted offers for buyers well below what the seller expected, but after showing them what is really happening in the market they’ve decided to accept less and change from “for sale” to “sold”. The numbers are great sales tools on a daily basis. They increase the chances of an educated guess proving accurate.

    That’s the value to me. Why share them with the public? Let’s say 1,000 people visit this site each day. If 1 percent of them are either buying or selling, this information is helpful to them. When they’re looking at an offer tonight, or writing one up, they can evaluate the previous day’s sell/list and compare that to their agent’s advice and ask some intelligent questions, like “Why do we have to pay over list if the current sell/list is 36%?”. Better yet, if they’ve been watching this blog for any length of time, they can ask their agent to download the total inventory for their tiny sub-area, restrict it to only the kind of property that they’re interested in, get the sell/lists, the % sold over asking, the number of listings over 90 days, the number of price reductions, the average DOM – you get the idea. It doesn’t garauntee they’ll get the property they want for the price they want, (or if they’re selling that they’ll get the price they want from any particular buyer), but it will provide them information to make them more comfortable with their decision. Buying or selling are huge decisions for most people. I’ve always found that more information allows people to make better decisions, and better decsions make people more comfortable.

    I’m confident that some people will think everything I’ve said is BS spin designed to pump the market and convince people to use me. The truth is that the information is widely available. Call Paul or Jeff, and they can get you the same stuff.

    In any event, think it through: I don’t really buy the bear/bull approach (although its entertaining) because it centres on predicting the future and timing the market, which is something I leave to others (I think I have a better system). Therefore, as far as I’m concerned, the numbers aren’t supposed to help us discern a trend. They simply tell us how we’ve arrived where we find ourselves negotiating. And considering the value of real estate negotiations, the numbers become very valuable by extension.

    Do you buy that application for daily numbers?

    (BTW, I don’t really say buy if you’re comfortable. That’s a little too all embracing. I sure don’t say that for investment. I say buy if its beneficial to you).

    hgit:

    Glad you like the numbers. I wouldn’t use them to predict more than a couple weeks out (as in “Gee, listings are very low right now, and sales are high. I predict…that a bunch of Realtors are going to hit the phones to get some listings in the next week”). The daily numbers are caused by things other than the daily numbers.

  53. hgit

    – A –

    I’m not sure what has your knickers in such a knot.

    Rob basically supplies 4 numbers (listings, sales, inventory and over 90’s) for a particular geographical area on a relatively regular basis. Is this the data you consider “bogus and amateurish”? I think it is just four numbers that are handy to have if you are interested in real estate trends in the area.

    As for saving time and effort by burning my money…. that doesn’t really make sense as I am not planning on making any financial moves based on Rob’s numbers.

    And as for learned people with PhD’s betting against Rob…. maybe, but they are just as likely be his customers.

  54. robchipman

    hgit:

    The reason I love -A- is that his contributions are so outrageous that they are almost unconditionally accepted. The most recent example is his claim that PhDs have been ridiculed for betting against crackpots like me but have eventually been vindicated.

    The obvious question is: what am I betting on that they’re betting against? I recommend buying investment real estate when the numbers support the move. Does anyone really think there’s a PhD out there saying “Despite the ridicule I’ll forge ahead and buy when the numbers indicate that I shouldn’t, and in time I’ll be vindicated!” Not likely.

    -A- likes to imagine that I’ve called for an unending real estate boom so that I can enrich myself at the expense of others. Its all in his head.

  55. alexcanuck

    I don’t think much of -A-. Personal and ad hominen attacks have no place in any discussion intended to result in clarity and knowledge. Rob also takes too much enjoyment in yanking his chain. C’mon, it’s too easy a target.
    OTOH, I am not a permabear, but am convinced we are at a historic moment that will result in a great buying opportunity for those ready. But not yet.
    I read that PH&N article, typical bullisht fluff, no new facts, just conjecture. “As long as Canada avoids a sharp supply build-up or a recession, our housing market should avoid a crash.” What do you call the specuvestors and the US troubles ?
    No time to dissect further, but if this is the best bull case I’m even more scared. Scared? I’m not scared, I’m ready. I’m sad for some, but not so sad I won’t pick up the pieces of their dreams for my profit.

  56. -A-

    The report is a joke. I would bet it was slapped together by the receptionist, or a realtor, not Patricia Croft, and besides, Patricia greatest asset is that she is telegenic, although at her age, it won’t have cache for much longer.
    For the most part (and the footnotes confirm it) it is regurgitated material from the realtors.

    And basically says that supply will eventually catch up to demand. One the serious blows which buckles the credibility of the report is the lame and tired “Vancouver is hemmed by the mountains and water” cliché.

    I wonder if it is intended to say:
    “Draw 100k out of your home equity, and we’ll invest it for you-for a fee”

  57. -A-

    “I don’t think much of -A-. Personal and ad hominen attacks have no place in any discussion intended to result in clarity and knowledge.”

    alexcanuck
    You come to this blog for clarity and konwledge?

    OK, I’ll be the easy target, if it makes you feel smart.

  58. Fozziebear

    “As long as Canada avoids a sharp supply build-up or a recession, our housing market should avoid a crash.”

    How do you avoid a sharp supply build-up? Once the peak has been realized by the specuvestors, there will be a “sharp supply build-up” with the rush to exit. Also, Vancouver RE is way beyond what is expected for “Canada”. Vancouver took a different path from the average trend in RE since 2004 and what happens in Vancouver will be a result of what has happened in Vancouver, not necessarily what the rest of the country is experiencing.

  59. Snick

    I vote for Rob re-printing “The Case For Fundamentsl” tome he wrote last year. Perhaps that will provide the guidance some of you a looking for.

    Rob? Over to you.

  60. ceejay

    The data is useful. Analogs can be drawn from historical speculative markets and 10 years of LM RE data indicate a bubble like any number of historical bubbles in any commodity or good. The rate of deflation of the bubble is hard to predict though; will it pop or just slowly hiss? There are few out there with any success in timing the top, so glean wisdom from your mutual fund prospectus: past perfomance is not indicative of future results and, if you are a speculator, sell if you’ve hit your profit target. And if you haven’t yet? If you are in the black now…look at the chart and decide if exponential price growth is sustainable. If you are in the red…maybe its time to cut your losses.

  61. coco

    At first:

    No problem with subprime

    No Canadian bank has U.S. subprime exposure

    Canadian banks have nominal subprime exposure

    Canadian banks have minimal subprime exposure

    Canadian banks book subprime losses

    No Canadian recession

    No U.S. recession

    Slight slowing of the U.S. economy

    No Canadian slowdown

    Slowing of the U.S. economy

    A little slowdown in Canada

    U.S. may slowdown faster than originally thought

    Canadian economy will slow

    Possible U.S.mild recession

    Possible U.S. severe recession

    Possible mild recession in Canada

    What is next?

  62. coco

    Why cheer when the average home price goes up? Your profit is only on paper until you actually sell your home and lock in your profits.

    The higher the price goes the less qualified buyers you will have over time, as more and more buyers are priced out of the market.

    Eventually you will get a glut of inventory at 800k or whatever price the home can no longer sell at and an ever shrinking pool buyers.

    Depending on the inventory levels and number of actual qualified buyers, this could mean steeper price corrections in the future, than if the prices rose more gradually over time.

  63. blueskies

    from the PHN missive

    Western Canada’s hot markets share
    two common features: sharply rising local incomes and a flood of in-migration that temporarily pushes demand well above supply.

    sharply rising local incomes ?!
    maybe in the forestry sector or not…

    a flood of in-migration?!
    more like a slow diminishing leak….

    temporarily pushes demand well above supply…. and when that changes watch out
    steamrollered speculators as far as you can see.

    the report is unmitigated bullsh!t…. IMO

  64. spectralshift

    Beans,

    You seem to be complaining about raw data here, or a rather simple comparison between two pieces of data. The numbers provided here did offer information that helped me time my own selling strategy. In the macro of course, as it was the very first stepping point, but it was a piece of information that helped me time. That’s useful information that I cannot get easily (since it requires historical data to compare it to). And it was used in a practical concept, and my interpretation seems to have been correct.

    Data is data. The information provided tells what is happening in the market in a very real and practical sense. It cannot predict the future, but it can tell you what is happening right now and what did happen. The argument that a meaningful trend cannot be built is probably true. Course, I’d love to know what you would consider a meaningful trend in real estate. I think we are currently in an up trend. Are you buying? Trend is a meaningless concept here. The only thing that matters is metrics. It has been repeated many times; no one can call the top, the bottom, the middle, the next day or anything in between. You are rolling dice and the best you can do is load the dice (with metrics, inflation, bargaining, etc) and roll them on an even economic table (rates, inflation, growth, etc).

    Anyway, the blame lies on people misusing data for creating/adding to their own confirmation biases, not in the data itself. Those that use it to predict the market rather than monitor the market will probably be as correct (bias aside) as those that use more robust (More robust than just data?) data. That is to say, right as often as chance.

  65. robchipman

    Blueskies:

    “the report is unmitigated bullsh!t”

    Hey, I warned you! 🙂

    Coco:

    “Why cheer when the average home price goes up? Your profit is only on paper until you actually sell your home and lock in your profits”.

    Not so fast, there. Buy and hold long term. As average home prices rise, its a sure bet your property rises in value as well. Any combination of mortgage paydown, liberalized lending practices, improved loan to value ratios, falling interest rates, advantageous tax treatment and increasing rents loosens up equity to be extracted through mortgaging, often then put to use in other investments (including more property). This has been the case for years.

    There are always two potential ways to extract equity from property.

    Snick:

    Whatever tome you’re referring to doesn’t need to be re-printed. Everything I’ve ever written on the blog is here or at the old blog. Why don’t you just quote from it?

    Fozzie:

    “How do you avoid a sharp supply build-up?”

    Good question. Considering the lag time with building you’d have to think that if the market changes and sales volumes drop there will still be lots of projects that get completed. That has to equal over-supply. The only way to avoid that is never build more than can be consumed, but I’m not sure the development machine has a governor on it.

  66. jesse

    “Patricia Croft is a highly respected economist and has made bearish comments in the past. No longer it seems.”

    I assume you mean she is no longer making bearish comments, not that she is no longer highly respected?

    Croft makes little mention of Vancouver in her report. She is right that the amount of leverage in the US was higher but draws a funny conclusion about why Canada was “behind the curve”. Canada was behind the curve because the US borrowed more. Hmmm. I guess that means Canadian real estate can “catch up” if Canadians borrow more too?

    I think in many ways she is calling it like it is on a national basis — less leverage and less oversupply compared to the US so things should not be as bad. This makes sense. But also read her qualifiers in the summary and note how her forecasts are on a national basis. Good find BTW Mullet.

  67. Anonymous

    Off topic, but interesting….

    Macy’s cutting 2,300 management jobs
    LISA CORNWELL

    The Associated Press

    February 6, 2008 at 2:54 PM EST

    CINCINNATI — — Department store operator Macy’s Inc. [M-N] said Wednesday it will cut about 2,300 management jobs as it consolidates three regional divisions and decentralizes buying in a bid to reduce costs and boost sales.

  68. Annon

    Dell saves 100 million with 900 jobs cut. Macy will save 250 million for 2008. That’s 1/4 of a billion less circulating in the market and that will reduce the money velocity by 10 times of the 1/4 billion dollars. Luckily US market is some 9 trillion market so I guess this is small potato by comparison. But surely most recent economic data don’t seem to suggest US is or will be doing well.

  69. JP

    Just wondering…..Of the people (most of you) who are very negative about the market how many of you own your own homes.

    FACT: The housing market will slow but it will never collapse like some of you are hoping and wishing. I think you are just upset you missed the boat and kept missing it every year as home prices kept rising.

    Even if we had a major price correction the negative people on this board still would not purchase because you think prices they are going to come down further.

  70. DaMann

    JP ingnorane is bliss!
    “FACT: The housing market will slow but it will never collapse ” Wonder how many people said this in the US AND here during the last two corrections/crashes?!?!?

    I bought 3 years ago and fully expect prices to retract below what I paid. What do you say to that? Not all bears are renters, just logical.

    Maybe ‘m being equally ignorant but it sounds like you only recently bought and are praying/hoping that you don’t lose your shirt.

    Fundamentals always always win, hype never does…

  71. DaMann

    Should have read,

    Ignorance is bliss.

  72. DaMann

    “Even if we had a major price correction the negative people on this board still would not purchase because you think prices they are going to come down further”

    That is also why crashes happen and go down as much as they do. I have heard people say that if prices correct there would be so many people ready to jump in. It’s called psychology, it works the same way getting pumped up as it does on the way down. Once the carnage starts, it’s exactly that, people keep waiting cause they think it will go lower, hence no one can sell unless they fire sale it.

  73. Annon

    My wife fired her financial adviser and opened her own self-directed investment account. The account manager told us on Saturday that almost all of his clients, especially first time home buyers went with 40 year mortgage. He said most of them are drowning in debt. But he went on and said that he expect some people will and are planning to pay off the 40 year loan in 20 years or so. And he believes that housing price will eventually outrun the risk first time home buyers are taking. While I am not as optimistic as the account manager, I think many home buyers are indeed working hard to keep their houses. And in some way, Rob is correct that it’s easier for central banks to choose inflation just because that’s probably the only thing central banks can do without being blamed for the result of years of inflationary prosperity worldwide.

  74. domus

    “inflationary prosperity”

    Sorry that’s an oxymoron….in economics there is no such things as inflationary prosperity.
    Inflation delays the pain, but makes it worse when it actually arrives.
    Central banks should hit the bullet, generate a temporary (no longer than 2 years) recession with implied job losses and cleansing of excesses. That’s the only way to economic prosperity.
    Do not believe people who tell you otherwise.

  75. satv

    ” if the market changes and sales volumes drop there will still be lots of projects that get completed. That has to equal over-supply”.

    Most of projects has been sold or sold over 80% otherwise developer won’t proceed farther that’s the technical point in new projects.

    “The only way to avoid that is never build more than can be consumed”.

    There is no land mass most of projects are being built in the parking lots definitley very tight situation on supply,for farther development developers are trying to push the government to break the seal of green spaces so they can serve the demand for forth coming Immigration and Migration.

    A letter from realtors and from developers is already on the table but there will be huge protest from genral public few year later.

  76. satv

    and yes ofcourse anybody wants to buy any unit in vancouver then do it today.

  77. DaMann

    There is no bloody need to open the Agricultural Land Reserve! Most of the demand right now is specualtion! Immigration is at it’s lowest in 15 years. There are plenty of places to build around here.

  78. Annon

    domus: “inflationary prosperity”

    I agree with you. That’s why I added “inflationary” to “prosperity” because government and the financial experts seem to acknowledge only the “prosperity” part.

  79. Snick

    “Snick:

    Whatever tome you’re referring to doesn’t need to be re-printed. Everything I’ve ever written on the blog is here or at the old blog. Why don’t you just quote from it?” – Rob

    I wouldn’t be surprised if you pulled out your handy “speak-write” and rewrote all of it to suit current conditions. Just like Winston Smith in 1984.

  80. robchipman

    Snick:

    Is that the same as saying that you can’t find what you’re referring to?

    SATV:

    Maybe so. However, if a bunch of places are 80% sold, that’s 20% still available. If, out of the 80%, some are sold to investors then we’re at the old crossroads of housing demand versus sales demand. If they’re run of the mill properties and aren’t occupied after completion, their value tends to fall.

    I don’t know. I could be wrong. But if you ever visited Dallas in the mid 80s you’ll remember miles upon miles of empty condos.

    DaMann:

    Funny you say that. There is currently talk of setting up an Industrial Land Reserve. Not wanting to point out the blatantly obvious, but if you want land for agriculture, someone else wants it for residential and a third group wants it for industry, isn’t that the definition of land shortage? I know that we can build up for residential, but that just stretches the land – it doesn’t increase supply. Do you recommend logging Mt. Seymour? Burke Mountain? The land shortage is real (and I tend to support the ALR, btw).

    You also wrote:

    “I have heard people say that if prices correct there would be so many people ready to jump in. ”

    Not my experience. When you could get 25% down cash flow positive stuff I ran into lots of people saying “Forget it. Real estate is going to crash” or “Nope, better things to invest in”.

  81. domus

    There is a bad buzz in the air for the past few days. Everyone is expecting the monlines downgrades to arrive any time: people know that behind the scene there are frantic attempts to bail them out orchestrated by the US government and Bernanke himself.
    If the monlines give way, the floods are open: the crunch will be strangling the economy as most (mortgage) credit will dry up to nothing.

    Canada is not immune to a monline downgrade: CIBC has definitely the highest risk of going down if their insurers lose the AAA rating, but National Bank and Bank of Montreal are also rumoured to be in big troubles for a downgrade. From what I read and hear, the only relatively safe bet is TD bank, although nobody really knows.

    The most ominous sign came today from the 10-year bond auction in the US: not enough bidders, something not seen since 1978. People familiar say it is due to the perception that inflation is going to go up dramatically in the next 6 months and bond investors are expecting higher discount rates (higher interest if you want) to compensate for nominal losses.

    Don’t forget that mortgages are priced using long-term rates: many people say that the low nominal rates have been a big trigger in the housing boom. They don;t seem likely to last much longer, if the inflation pressure materializes.

    Funny how central banks might end up strangling mortgage lending by lowering short term rates and ignoring inflation.

  82. Mightymouse

    “What if House Prices Fall by 30% Worldwide?”

    http://news.goldseek.com/LewRockwell/1202308598.php

  83. Anonymous

    “The account manager told us on Saturday that almost all of his clients, especially first time home buyers went with 40 year mortgage. He said most of them are drowning in debt.”

    At least we now know how they guys are buying these homes. Good luck to these guys…..living most of their prime years paying high monthly mortgage payments.

    What happened to all the “rich foreigners” who were buying up all the properties?

  84. domus

    Mightymouse:

    it almost scary how similar your article’s description is to Vancouver. Almost scary.

    I wouldn’t rule out seeing some more crazy behavior this spring, with people bidding 600k for a shoebox downtown or in Kits. RE has become an obsession for some….even if they could live much better right now by renting and waiting for the next leg down. Truly, it beats me….

  85. DaMann

    ROB

    Everytime a boom comes upon us and prices soar, ALR is in the gun sights. I read a few clippings of Sun articles of the 1981 boom/bust. Right before the bust there was talk then of converting farm land for residential. Guess what, all went silent when the shit hit the fan. Same will happen now. Once the bust comes and demand for RE is in the toilet, all the ALR talk will go away till the next boom. As for industrial, I can’t comment, I know nothing about the supply/demand of industrial land.

    We have lot’s of land to build on, lot’s. Vancouver? Maybe not as much, need to densify, but then again there is no farm land to worry about in Vancouver. As for building up the slope of the North Shore? Nothing seems to be stopping them right now, and opening up the ALR won’t stop that. People who want to live in the North Shore will. Building more cookie cutter sub divisions on farm land won’t ease the stress on the North Shore.

    Like I said, once the boom goes bust, the ALR will get a reprieve till the next boom.

  86. DaMann

    Rob
    “I have heard people say that if prices correct there would be so many people ready to jump in. ”

    I didn’t make myself clear. These are the excuses people tell me of why a crash isn’t possible. Cause people would just jump in when it dipped. My argument was basically what you said, once it starts dropping people will just wait longer, hence prices drop further.

  87. $fromA$ia

    HAHHAHA, I love Robs comment to SATV.

    Thanks, ROB!!!

    Lay it on how you see it.

    That’s what I am talking about!!!

    Kudos to ROB!!!!

    SATV, please post under another name and maybe somebody will bother to read your A$$inine comments.

  88. -A-

    Rob, I just came back from Surrey, where I performed an exorcism on a fellow realtor of yours.

    (Didn’t go to well, just to far gone, like you)

    Based on my personal observation of the Clayton
    Area, your numbers as well as those of your association are bogus.

    There are literally hundreds and possibly, thousands of new homes not yet sold for as far as the eye can see, but somehow they are missed by the stats.

    Yeah, it’s just my opinion, I have no hard evidence, but I think a lot of inventory is not reflected in the official stats, because of your industries’ manipulation of the numbers.

  89. domus

    Mighty:

    I especially enjoyed this part, “When real estate prices leap by over 20% a year in a region, you know you’re seeing a bubble. This is happening in Los Angeles and Boston. It is the time to sell and rent or sell and move. When the bubble ends, buyers get locked into their jobs because they must pay their mortgages. They lose mobility geographically, which reduces career mobility.

    Buyers think “I must buy now.” They think the market will never stop rising. But prices always do stop rising. There is always a hard-pressed seller who has to walk away from ownership. You buy the other guy’s mistake. You shop for mistakes.

    I was a year early. But, generally speaking, the person in Los Angeles or Boston who did what I said is ahead of the game today. If he has equity money in reserve, he is going to be able to buy at substantial discount before this cycle is over. “

  90. -A-

    (Didn’t go to well, just to far gone, like you)

    (Didn’t go too well, just too far gone ,like you)

  91. satv

    $fromA$ia,

    I think you did not read this following words…..

    “Maybe so. However, if ,I don’t know. I could be wrong. But if you ”

    still thanks ROB,your senior guidance is always helpful for all.

    $fromA$ia,
    see the magic words but I am not here to collide with rob, what we share on this board is information.there is lot to explain,I can do that some other time.

    I am glad that you are still loughing,there is nothing beyond happiness keep the spirit.

    Cheer Up 4

    Vancouver B.C. – best place on earth

  92. Disbelief

    Yeah, it’s just my opinion, I have no hard evidence, but I think a lot of inventory is not reflected in the official stats, because of your industries’ manipulation of the numbers.
    I am in a similar opinion… They have ultimate control… The media and the MLS quite a lot of power for a bunch of glorified used car salesmen. They tell you what you want to hear… Sorry but a salesman is a salesman and nothing more. At the end of the day its about selling your product and the ones at the top are very good at it. That Mercedes doesn’t pay for itself…

  93. Snick

    “Snick:

    Is that the same as saying that you can’t find what you’re referring to?” – Rob

    There you go again, putting words into my mouth.
    Typical.

  94. A –

    I live in the Clayton area and I can tell you what the trick is.

    Realtors / developers only list one unit when there are in fact 10 or more for sale. This happens in all of the new home developments.

  95. Snick

    “I live in the Clayton area and I can tell you what the trick is.

    Realtors / developers only list one unit when there are in fact 10 or more for sale. This happens in all of the new home developments.” -Mohican

    Being a the consummate manipulator…care to comment on this, Rob?

  96. Snick

    “Being a the consummate manipulator…” _Snick

    Yes you, NOT me. So, don’t try and turn it around.

  97. ceejay

    Snick…one mistake and you get therapized. Get ready for the DSM IV to come out of Rob’s desk 🙂

  98. master choi

    One of the main problems I see with regards to the North American real estate market is that people perceive their house as a “business” to be managed. In other parts of the world where I have lived, people consider their house to be their home. Economic fluctuations seldom afect their decisions with respect to their place of residence.

  99. BOBBYBEAR

    have to keep in mind that when an upward surge in RE prices starts….the various municipalities are largely unprepared…and the builders as well..

    from concept stage to ready to move in stage may easily take ……………4 years for a highrise……now that is not what I would call being prepared..could it be slower? yes it could…they could forget about it entirely ….reminds me of the military 🙂

  100. -A-

    mohican
    February 6, 2008 at 7:41 pm
    A –

    I live in the Clayton area and I can tell you what the trick is.

    Realtors / developers only list one unit when there are in fact 10 or more for sale. This happens in all of the new home developments.

    Rob, and the rest of the realtors:

    Any comment on Mohican’s comment on my observation?

    Again, disclaimer:

    I have no hard evidence, but in my opinion, the data as presented by the RE industry is bogus.

  101. blueskies

    from paulbs’ site:

    10176

    the real deal!

    5 digit reality!

  102. coco

    One listing for 50 new homes is common. This has been going on for years. Saves on MLS listing fees.

  103. coco

    True inventory is a mystery.

  104. robchipman

    DaMann:

    There is real pressure for industrial land. First, you really can’t go up. Second, a lot of the applications require a lot of room (a friend of mine has a relatively small shop, but needs a big yard to move large pipe around.

    I brought up the North Shore for a reason. The District wanted to sell many many lots in what is called Cove and Mountain Forest, but which we can think of as the lower slopes of Seymour. The Mayor and council got kicked out, and a huge swath was re-zoned Park, Recreation and Open area. No lots.

    In ’82 we were a much smaller city and the ALR was brand new. Look at -A-‘s comments about Clayton – wall to wall houses. You just can’t have it both ways.

    -A-

    I don’t track Clayton. I guess your conclusion on my numbers, based on your personal observations of an area I don’t track, is rock solid. Your logic is certainly consistent. Its like when you don’t read something but feel qualified to comment on it anyway.

    Mohican:

    I don’t know about the FVREB, but that used to happen quite a bit in the REBGV. We changed billing so that it was no longer as advantageous to do it. It may still be happening, but I don’t run across it too much (I don’t deal with a lot of new homes).

    How important is it, though? Has it been going on for a long time? If so, who cares? I report inventory of 10,000, you mentally factor in that its really higher because of the new developments, so perhaps its 10%, 15% 20% higher. You recognize it, and it probably isn’t new. If its happening now it happened in December, and November, and July, and June.

    Snick:

    I’m not putting words in your mouth. You keep referring to some post that apparently damns me, but you can’t find it or quote from it. I’m pretty sure I know which one you’re talking about, and you misunderstood the whole thing from the get go.

    Disbelief:

    OK, let’s face facts. It all starts with a sale. Everything. If someone doesn’t sell it it doesn’t get made, grown, mined, killed or cut down (unless you’re in some self sufficient off the grid commune). If you’ve got a job, its a direct result of sales. Simple fact of capitalist life.

    Take a look at your statement:
    “I have no hard evidence, but I think a lot of inventory is not reflected in the official stats, because of your industries’ manipulation of the numbers”.

    The Board collects listings. The post them all on a Multiple Listing System. Every listing has an owner, a listing company, and a listing salesman. Every one has a physical address. For the Board to under-report listings they’d need the broker, the salesman, and yes, the owner of the property to all conspire. Most owners look for their property on MLS.ca, and most Realtors want their listings on MLXchange so that they can get sold.

    According to Blueskies and Paul there were over 10,000 active listings today. The conspiracy would have to be pretty widespread.

    There’s another possibility: there could be inventory that’s for sale, but not listed on the multiple listing service. It could be a single owner who doesn’t want exposure, or a developer who doesn’t list all his properties. The could be exclusive listings. In that case, the Board doesn’t have the listings. There’s nothing for them to manipulate.

    Last point: Board data is readily available. You can take anyone of the over 10k active listings and drill down to the physical address. Its easy to get the hard evidence. Ask one of the writers for 24 or the Sun or something to do a big expose.

  105. coco

    Rob,

    Not sure why you commented on my first sentence and not the rest of my comments, which the first sentence is actually referring to.

    As you well know, real estate can appreciate and depreciate, you only give examples of the best scenario long term appreciation. How about long term depreciation?

  106. satv

    “I live in the Clayton area and I can tell you what the trick is.

    Realtors / developers only list one unit when there are in fact 10 or more for sale. This happens in all of the new home developments.” -Mohican

    I am not agree ,while towers over towers were being sold with in 2hours then who are those developers,those who willing to list only one unit to save what?.

    Han he could be would be right on some case where buyers does not show up.
    I myself was in line for 20hour and 16 hours some other side.
    First site there were more than 450 units all of them were sold with in 3 days.
    otherside there were alsmost 80 units those were sold out within 2 hours .while I was waiting in line some body told me I will be lucky if there is anything left.

    so mohican will be right only in some circumastances not everywhere but still that would be unique idea to run their part regardless the developer is Mohican or it could be anybody,you,you and you!and………

  107. robchipman

    coco:

    Which comment are you talking about?

  108. Anonymous

    My friend lives by this new area, see how they list 40 homes for sale under one MLS number

    F2802773

    2648 162ND ST, Grandview Surrey, South Surrey White Rock
    Over 40 new 2 storey homes with fully finished basements in Morgan Heights, South Surrey’s newest neighbourhood. Built by RAB Properties, one of the Valley’s premier home builders, these homes offer the finest in features and quality.

  109. coco

    Rob,

    This one…..

    “Why cheer when the average home price goes up? Your profit is only on paper until you actually sell your home and lock in your profits”.

  110. robchipman

    Coco:

    I didn’t comment the rest of your post because it didn’t really warrant it (no offense). Your point is pure speculation, right? But, I’ll give it try for your amusement.

    The old idea is that prices can keep rising until affordability kicks in, meaning nobody can buy. So what? Buy at $400. Watch prices rise to $800. Affordability disappears at $700. Boo hoo. Should we pray that prices only rise to $450? (We’re talking investment real estate here, remember).

    The affordability argument itself has weaknesses. It makes sense in theory, if you take away external factors, but we’ve seen it pushed very, very hard. CoV building permits just hit huge numbers. Are you certain affordability is going to take effect anytime soon? Maybe, maybe not. So why dismiss the profit?

    The idea of rapid increases being followed by steeper declines netting lower price increases compared to a more gradual increase is debateable. Buy at $400, see it rise to $800, watch it fall to $600, or buy at $400 and watch rise slowly to $600? Who cares? You can’t predict which will happen, so when you see double digits for a few years in a row its worth saying “I bought this for 5% per year nominal. 20% this year means I can see negative or stagnant growth sometime in the future and still be on track with my plan”.

  111. coco

    Sure I’m speculating. It is all about timing isn’t it?

    If you bought in the peak 1995, it would of took you several years to regain all the depreciation you lost compared to buying in 2000.

    “Buy at $400, see it rise to $800, watch it fall to $600, or buy at $400 and watch rise slowly to $600? Who cares? You can’t predict which will happen, so when you see double digits for a few years in a row its worth saying “I bought this for 5% per year nominal. 20% this year means I can see negative or stagnant growth sometime in the future and still be on track with my plan”.

    You can debate about that too as there is no guarantee when it comes time for you to sell that you will have appreciation. People have to sell for variety of reasons…..poor health, death of a spouse, divorce, loss of income/job, etc. and may not be able to wait for the price to appreciate back up to the level they originally purchased the house for.

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