Following up on recent discussion using average SFH prices, these data regarding REBGV benchmark prices and sales [via vanpro at RETalks 4 Jan 2012 6:50pm]:
Dec 2011:
Greater Vancouver SFH sales down 18.1% YoY
SFH benchmark price down to $887,471 from $901,680 in June/11 [-1.5%]
Some components:
Van West SFH benchmark price down from $2,068,857 in June/11 to $1,990,958 in Dec/11. [-0.5%]
Van East SFH benchmark price is down from $854,004 in July/11 to $845,771 in Dec/11. [-1.0%]
West Van SFH benchmark down $104k from $1,793,524 in June/11 to $1,689,043 in Dec/11. [-5.8%]
—
So, SFH benchmark price down just 1.5% from June peak.
Compare this with 13% drop seen in average price.
Putting aside the possibility of ‘benchmark massage’, the difference is likely due to sales mix.
All available data show a pattern of dropping sales, rising inventory, and prices that are dropping a tad.
Can’t be sure that this is the start of the implosion, but a start could look like this.
June 2011 may well have been the peak.
- vreaa
PS You have to love the REBGV spin “Balanced real estate market prevailed through much of 2011″: Started hot, ended cold, thus it’s ‘just right’. (If it’d done the opposite we bet they’d have been extrapolating the recent heat into the new year…)
there is a valid argument to benchmarking via repeat sales, etc. however, there is also a lot of new construction and renovations. so, benchmarking involves assumptions. eg. if a home with $50k of renovations sells for the same price. how are you going to benchmark that? what if the owner spent $50k on man cave with puke green shag? how are you going to index new construction vs teardown at the same address? the straight avg price measures may overstate the decline due to ppty mix. median is better – is that published anywhere? at the same time, the benchmark measure likely understates due to cost of improvements. these are all sort of backward-looking old news as far as looking for a turn. credit measures are most reliable looking forward.
VREAA…tch, tch…as you noted yourself, it’s not “cooling.” It’s merely “balanced.” A wonderful time to “build equity.”
After all, interest rates are near record lows. Prices overall have stabilized. Real estate is a great investment. And above all else, remember that current inventories won’t last!!
Heck, it’s a *great* time to buy OR sell a home.
If you don’t believe me, just ask the US National Association of Realtors, circa 2006, even as the market was crashing all around them:
http://bigpicture.typepad.com/comments/2006/11/its_a_great_tim.html
My god, what a sickening profession.
Love that ad, Gord! Their 6 bullet points couldn’t have been any more off!
“Interest Rates Near Record Lows”
“Large Inventory Won’t Last”
“Prices Overall Have Stabilized”
“Positive Outlook”
“Real Estate is a Great Investment”
“Don’t Delay”
At least they were half right, it was a good time to sell a home!
Doesn’t seem like much of a balanced market to me. I’ve been tracking listings in our complex for the last year – in a complex of ~220 units, 38 unique listings for the year, 20 listings sold, 12 of those listings had a sale price greater than the 2012 assessed value.
Obviously, this isn’t something you can necessarily extrapolate to the whole market, but it when only ~50% of the units sell, that seems to me to imply that supply greatly outstrips demand. Yay for me
So far, this is just statistical noise. Not significant enough.
If the spring selling season ends with lower prices, then we will have something…
December is always the cheapest time of year to buy a house, year over year the averages fall in December…so it’s hard to come to any definitive conclusions.
I remember the market crash in 2008 tons of for sale signs went up and didn’t come down. There was an 18% “adjustment” in 3 months. I remember driving in a subdivision in Mississauga and every street corner had open house signs on both sides of the street for as far as the eye can see.
So we’ll see…
And – Detached Van West volume at 62 is close to the 56 registered in the dismal 2008. . . .
Well – January is off to a terrible start also with only a trickle of sales (even a trickle when seasonally adjusted) and major listings. Richmond detached has had 100 listings in first 3 days of year and only 9 sales. 100 listings in 3 days? that’s crazy.