“Inventory stats on the Vancouver Market
Overall, starting the year much over last year – however – almost all of this is concentrated in 4 areas.
1.) Richmond Detached – up close to 100% over last year – Epicenter of the crash.
2.) Vancouver West Detached – up 70%. Not too far behind.
3.) Richmond Attached and Apartments – Up 25%. This is also a major problem area with close to 1,000 units for sale already at this early start to the year. This is pretty much 10 months of inventory and we have not even seen the listings flood yet.
4.) Coquitlam attached and apartments – up 20%.
Other than these four areas, inventory is at a normal opening level. There are no other detached areas which are really significantly changed..
—
The big chunk of the market which is Vancouver attached and apartments is pretty much starting even with last year – – showing that government policy of low interest rates and easy credit access to the banks has continued to fuel the number of first time buyers coming into the condo market. Kids are so uninformed. I feel sorry for this generation that may never see their property worth more than what it is today; it is likely to fall. Ask any kid who bought their downtown box in the past 2-3 years how they’re doing with their fantastic ‘Equity Building’ exercise. Many wish they were still renters… most of my friends in that position do.”
- posted at greaterfool.ca and forwarded to VREAA by ‘ZRH2YVR’, 9 Dec 2012
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- “My folks find themselves at 65 still owing half the value of their home and recreation property to the bank. After almost 30 years of ownership in the BPOE and a number of boom markets, they have very little to show for it.”
- “Rent for $2,200 a month or buy and have a mortgage of $4,310 per month. Why would anyone buy?”
- “They were talking about two couples they knew who had recently bought a lot and planned to each build a house on it and live as neighbours.”
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- “He’s sold all his properties except his current one, which is now for sale. He explained that the market’s currently in crash mode, worst that he’s ever seen.”
- “One of my old high school buddies finally got her mother to sell the family home in Kitsilano – sold for over $1M, monies realized after debt paid off $185K.”
- “I know someone who just declared bankruptcy because her condo was assessed at $150k and she bought it presale north of $250k in 2005 or 2006.”
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- “She said the market was dead in Victoria and that it would remain so for a very long time. I asked how she knew. Her answer was fascinating and should scare the pants off the real estate crowd.”
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- “A beautiful Belfast home, in the equivalent of 1st Shaughnessy, bought at their RE peak in 2007 for £3.5 million, has now sold for £800K, almost 80%-off. The market didn’t suffer any significant economic shocks. Rates & unemployment didn’t skyrocket. They didn’t build more land. Sentiment just changed and the prices fell and fell.”
- “Two family members of hers are trapped, underwater, in condos on the East Side.”
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- Rumor that some OV units will be reduced by 20%.
- Downside Weights On The Vancouver RE Market – “One of the older guys (over 60) mention to the guy beside him that he and his wife were thinking about selling their family home, and renting, in order to get some of the money that was locked up in the house.”
- “My buddy was looking to upgrade to a house in the Coquitlam area. With 200k extra for a home, that’s half of lifetime saving between him and his wife.”
- “I was walking in the Fraser neighborhood yesterday, I noticed that the population, on average, seem to be composed of workers. I belong to the top 5 percent in terms of income. Nevertheless, I cannot afford any of the houses for sale in that neighbourhood.”
- “Vancouver is an urban resort whose value mostly resides in its real estate and not much else.”
- “Rogers Communications is expanding into RE; aiming to relaunch website; providing critical data that can help potential buyers assess the value of a property from the comfort of their home computer.”
- I’m only 50 and I can just about retire if I want to, all because of a single simple decision – “When prices rebounded to their former highs, then rocketed another 30% higher to what I considered to be totally unsustainable levels, I decided that only a fool would pass up a second opportunity to harvest such a massive non-taxable capital gain, and in 2011 I sold my place.”
- The Vacant Lot of Versailles, Richmond.
- “I don’t think that most people think things are going to crash, just that there is going to be a slight correction, but it was amazing to me how sentiment has changed, and the fact Vancouver RE is too high was just understood.”
- “The ‘investor’ who purchased our house put it up for sale two months later, in January 1981, but the bubble had burst.”
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We should wait at least until March to make a judgement about a “crash”.
So far, things are looking good.
I have to admit a bit of schadenfreude here but a bigger part of me is really worried that this is going to get very ugly, and quickly.
Define ugly.
You want the ugly? You can’t handle the ugly!!
http://www.irvinehousingblog.com/wp-content/uploads/2007/09/ugly3_lg.gif
That was disturbing…
We are “all” waiting for the crash. If/when it happens, it will be beautiful.
I always wondered what happened to ‘Sparky’ after we stopped atmospheric testing and went ‘all in’ on computer modelling.
It is true that one day or 10 does not make a trend. However – today was one of the worst I have ever seen in terms of the number of listings and the real lack of any sales (43 sales and 378 lists in REBGV).
Looking at the epicenter of the expected crash – right now we are on pace to sell approx 60-70 detached in Vancouver West (down from 134 last year – possible drop of 50%). Possibly, Richmond will have at most 85 sales of detached this month – down from 162 last year Jan (approx 50% drop). The attached/apartment market should be down about 25% in Vancouver with up to 200 units selling and Richmond up to 120 attached/apartment units (a decrease of 40% over last year).
Other areas which are interesint to follow are West Van (3 sales of detached year to date) and Van-East (good sales pace and possibly will sell as many as last year same month – look what happens when buyers are forced east). West Van is going back to where we would expect which is very low sales volume while East Van is getting those who feel they must own but just can not afford to take their 10% down and 90% CMHC $1 million mortgage and get anything on the west side.
I’ve watched the intricacies of this market for almost 5 years now and this time it really is different. What’s different is that for the first time, we are having sales crater while listings are exploding. We may have over 5,000 new lists in REBGV this month – which I don’t think has ever been achieved in a January. We may also only have in the low 1,000 range of sales this month which had sales of 1,800 last year. We will not reach the 2009 level overall unless condo sales come to a halt. However- some areas may reach this level.
Let’s see how the month goes.
I bet that would probably drive up the average sell price as those insanely priced $3M+ VW houses will have an even bigger impact. Thus giving the news media the incredible good RE news story to report and urging to buy, buy, buy before you are priced out forever again!
Why would any of the “kids” regret the purchase they made 3 years ago? Provided they can afford the payments, and are not overly stretched what is there to regret thus far?
I’ll look for some more stats but here is one from one of the more popular buildings with “kids”. Spectrum building. 903-111 W Georgia
Sold- Jan 2012 – 478,800
Bought Dec 2007 – 497,000
Great equity building – Assume 25K of closing costs – this is loss of 50k over 4 years. Add the likely large mortage penalty (rates in Dec 2007 likely in 5.5% for mortgage) and add another 15K for the bank. This makes 65K over 48 months or about 1300 per month – - hmm. There are lots like this right now.
But as any person with an intelligence knows, it’s only a loss if you sell! If the kid would just sit tight, hold, and earn that market loyalty badge, he would never suffer a loss. Now because he sold, he suffers a real loss and he now has to throw money away on rent paying the landlord’s mortgage and making the landlord rich!
Many people who bought in the past few years (who want to “move up”) can’t. Prices in many developments are down and if only put down 5%, even places that are up (say 5%) you will lose all your gains in transaction costs. Some also borrowed from bank of mom and dad to go and buy multiple units with only 5% down and are seeing that the gains that they thought were sure things are not. If you’re 30 and have only known easy money in real estate, it is not where you expected to be. Not everyone is in that place however.
“I been down so long, seem like up to me
Gal of mine got a heart like a rock in the sea”
Funnily enough after reading this I visited major social networking site ™ and saw more than a few of my contacts “thinking of renting out our second bedroom, anyone know of anyone interested?” since Friday….
Forget suites, is the crunch really on?
unless your contacts know lots of Jap/Korean exchange students or recent immigrant who are hardworking and came here for a better life, I seriously doubt they would want any of the applicants in their house. Problem with exchange students is that a lot of them smoke and drink quite a bit, especially the girls from what I heard. But on the other hand, if they are hot and wild…..
Speaking of making the landlord rich – -I’ve rented for the past 4 years and pay a pretty good sum. However, I have not in any way made my landlord rich. In fact – I would like to know how many landlords out there think they have become rich from the end of 2007 through now. My landlord has over 60,000 per year in costs to carry the property (interest, taxes, strata) and the rent is about 1/3 less than that. There has been no net capital appreciation and the assessment now is similar to 2007. I feel like I’m steeling!!!! haha- Then I take that difference and invest the excess (not to mention all the normal excess earnings that I save). Sounds pretty straightforward. The problem is that most young kids will not be able to save the excess or save at all – so owning is forced savings (as long as the property does not fall in value).
@z. very valid pt. owning is forced savings provided the final equity gain exceeds nfv of principal payments discounted. an excellent savings and discipline vehicle under normal conditions. quite the paradigm shift now.