In view of discussion on the previous thread, we add this chart for illustration and ongoing chat.
[This is a nominal average price chart, and the axes are linear.
Ideally one would do analysis of real, Case-Shiller type data on a logarithmic price chart.]
Greater Vancouver Average SFH Prices (as per REBGV):
2011-12: $1,064,249 (Current; down 13% from the peak; up 1.7% YOY)
2011-05: $1,223,421 (Historic peak)
2010-12: $1,046,348 (Ave price one year ago)
From a technical analysis perspective, despite numerous valid caveats, we note the following:
- Very steep channel support from 2009-2012 now violated to downside.
- Mild horizontal support comes in at $1M (‘big number support’ and 2010 congestion).
- Steep channel support from 2003-present still intact; bottom rail (support) now comes in at $935K-$970K for 2012. With added horizontal support at $935K, the $935K-$970K area is important through the coming year.
- The most important support level is arguably the lows of 2008-2009. We anticipate that, once the 2003-present channel gives, there will be a relatively quick move to $740K, a likely bounce there (to fool the folks who think that that is a superb entry point, given memories of 2009), before it is violated to the downside.
Ultimate support in $444K-$600K range, the likely bottom targets (thus 50%-66% off from peak).
May overshoot to downside, as often happens when such a massive generational speculative mania implodes.
If Shiller is right, and Vancouver SFHs ends up only increasing at the rate of inflation from the 1978-1986 region, ultimate support could be in the unimaginable $300K-$330K range. It’d probably take an economic depression to see those numbers.
Prior related posts: