Housing prices simply cannot outstrip incomes forever. A reconciliation will occur. -vreaa
This from the Vancouver Sun 25 Jan 2010 -
“Vancouver not only has the least affordable housing of 28 markets measured in Canada, but of 272 metropolitan markets ranked in Ireland, the U.K., New Zealand, Australia, the U.S. and Canada, according to statistics compiled by the Winnipeg-based Frontier Centre for Public Policy. The numbers are calculated by dividing the median (or middle) residential house sale price from the third quarter by median annual gross household income. In Vancouver, for example, a median home price of $540,900 was divided by median household income of $58,200 to create a multiple of 9.3. The group describes as “severely unaffordable” any reading of 5.1 and over. Not only that, it is “unprecedented in modern history,” the group said.”
See, there is no bubble.
Silly bears.
I was actually surprised at 540K being the “median” sold home; but of course, our 2006 median wage was slightly higher too. It’s probably regional rather than metro. So I’ll use metro numbers.
I just checked MLS – there are only 13 SFH in Vancouver East at 540K or below. There are 415 houses selling below 10 million bucks in Vancouver East. And Agent Will’s stats suggest that average sales are over a million.
So, using slightly more updated info, with a median wage of around 68K and picking a close to median price on Vancouver East MLS listings (which is lower than posted sales averages, and are the “cheap” houses), we’re looking at 800Kish.
That’s a multiple of 11.75.
I don’t think wages have gone up much since 2006, based on recession numbers, layoffs, job creations stats, interest rates, and anecdata. Also, adding Vancouver West back in would increase the median. So all in all, I think we’re likely looking at true multiples of greater than 11.75.
Good sweet God there’s gonna be an Armageddon in the market. I’m eagerly awaiting the carnage from the sidelines.