“There’s yet more indication investors are finally getting the break they need to beef up their portfolios, with the B.C. Realtor association confirming a near-8 per cent dip in the value of properties sold during the first month of the year.”
…
“Provincial sales activity was down in January from year ago levels,” said Cameron Muir, chief economist with the British Columbia Real Estate Association. “Increased market activity outside the Lower Mainland in January was offset by fewer sales in Vancouver and the Fraser Valley” (where residential sales declined by 10 per cent). …
“That overall drop in prices bodes well for investors across the Lower Mainland, who have had acquisition plans put on hold over the last year, as sellers ratcheted up asking prices in order to capitalize on foreign demand for Vancouver-area properties.
That demand has since waned, say analysts, and sellers have finally started to bring down their asking prices or take their properties off the market, effectively encouraging others in the market to drop their own pricing.
BCREA’s January numbers will likely add to that momentum.
Yet more sellers will have to leave the market to increase demand from investors and other buyers in B.C., argues one industry veteran.
“Despite the low interest rates clients are in no rush to buy,” Morris Briglio, president and senior mortgage consultant with The Mortgage Advantage, said. “There’s simply too much inventory on the market.”
…
- Excerpts from ‘Cooling market offers investors a ‘in’, Canadian Real Estate Magazine, 15 Feb 2012
We’ll register this as the first “It’s-only-a-flesh-wound” sighting of the down-cycle that is now underway.
Note how peppy lots of the commentary is: “getting the break”; “beefing up” RE “portfolios”; “bodes well”.
Note also the fascinating logic from the ‘industry veteran’: “Yet more sellers will have to leave the market to increase demand from investors and other buyers”.
Sure, I can just see those sellers stepping back: “No, please, you go first.”
- vreaa
This sort of half-baked news story makes the “buy the rumor sell the news” adage all but useless.
A very candid admission in there about the inventory levels.
What most people forget is that there is always someone who HAS to sell into a market like this, usually due to job transfer/loss, divorce, or health issues. Couple these “forced” sellers with mounting inventory and the clearing price has only one way to go.
Agreed.
And check out the Kelowna foreclosures post for what begins to happen when even a small number of sellers are “very forced”.
Yes yes yes.
Does everything have to be about investors ? And what investor would buy into a falling asset, guaranteed to decline ? No mention about families getting a break* ? I know the answers and are not pretty.
* Note to remember this next time a re tells me they are concerned about families, stability, etc.
Yes yes yes. Please people, real estate is only an investment if you pay cash and sell quickly. If you pay minimal deposit, compound interest, insurance, and endure inflation more than five years— this is a LOSING proposition. You will not break even. RE agents and banks who call a building an investment are lying. It is an EXPENSE. They use advertising lingo like ‘home’ ‘invest’ ‘appreciation’ ‘value’ to overcome cognitive dissonance, ie second thoughts. If it was an investment, the bank would pay their portion of the property tax. They lend money and make interest. That’s it. Nothing else.
A home is an “investment” only if you are willing to consider “stability”, “comfort” and “familiarity” as dividends.
“Note also the fascinating logic from the ‘industry veteran’: “Yet more sellers will have to leave the market to increase demand from investors and other buyers”. –Vreaa
Well, if you can’t decrease the sellers you can decrease the numbers of for sale signs out on the lawns. Anybody else been noticing that? Seems a good strategy. Nobody ever gets the feeling that nearly the whole block they live on is for sale when no signage appears. Same thing has been going on down in the states. No signs means nuthin bad is happening. See, you can all relax now.
“Yet more sellers will have to leave the market to increase demand from investors and other buyers”.
Someone get that guy an Econ 101 text book.