Westside SFHs At 20%-Off Peak? – “Nobody is willing to pay what other buyers were willing to pay only 3 months ago. And the sellers are blinking first.”

6332 Laburnnum St. 33×125 lot
Assessed at $1.494M (Land only).
Original asking $1.59M.
Reduced to $1.49M.
Sold for $1.365M.

Recent comparables:
6320 Vine st. 33×125 sold for $1.626M in Jan/12
6331 Yew St. 33×125 sold for $1.393M in Jul/12
6225 Balsam St. 33×125 sold for $1.708M in Feb/12
6436 Vine St. 33×125 sold for $1.638M in Feb/12

“I bet they all wished they didn’t “Buy or be priced out forever”
They could have saved $300K by simply…. waiting.”

1706 W59th Ave.
Assessed at $1.697M.
Asking $1.79M.
Sold for $1.6M.
Purchased for $1.7M in August 2011.

“Wow – $100K drop (+PTT and commissions) in 16 months.”

3721 W16th Ave.
Assessed north of $1.2M
Asking $1.288M.
Sold for $1.030M.

Similar sales include:
4583 W16th – Asking $1.098M. Sold for $1.18M in Jan/11.
4067 W16th – Asking $1.198M. Sold for $1.185M in Feb/11.
4591 W16th – Asking $1.249M. Sold for $1.260M in Sep/11.

“All those purchasers must be kicking themselves. They could have saved up for another year and bought for $200K less.”

650 W22nd in Cambie. New construction.
Ask price $2.488M.
Sold for $2.120M.
They paid $1.47M for the land (nearly $100K over asking) and now are hoping to get out with a small loss.

Similar sales in the past year:
905 W20th, 33×122 sold for $2.49M (no mention of HST – assuming HST included then $2.223M) in Aug/12.
856 W19th, 33×122 sold for $2.29M (1 year old home) Sept/12.

“Even since the fall, prices are dropping rapidly – $100K in 3 months or, wait for it, $1,000 a day. Nobody is willing to pay what other buyers were willing to pay only 3 months ago. And the sellers are blinking first.”

- all above stats and comments by ‘timber2012′, in a series of posts at RE Talks, 19 to 28 Dec 2012

We’d recently heard of a small developer saying that houses on the Westside are “down 20%”. This seemed a bit high to us, but the sales documented above appear to bear that out. Some SFHs on the westside appear to be selling for 15%-20% off the peak already.
And, seriously, this bubble hasn’t really begun to deflate yet.
– vreaa

62 responses to “Westside SFHs At 20%-Off Peak? – “Nobody is willing to pay what other buyers were willing to pay only 3 months ago. And the sellers are blinking first.”

  1. Some good comps; would be good to gauge market with a few dozen of these

    • Ask anyone in the dark arts, Rosebery… and they’ll tell you that, at best, they’re interdicting 5% of the ‘flow’…

      “Fei qian”, or flying money, is an artefact/legacy of the Tang dynasty – or if you prefer, a form of shadow banking predating the modern era… Think of it this way… more than a millennium’s worth of satisfied customers transacting through ‘informal’/unregulated transnational networks [see also thematically related: hawala].

      • Naked Official #9000

        Dlsloyal cadres!

        The wall street journal is nothing more than a meiguo propaganda mouthpiece! An organ of the state! Parrots of western imperialist capitalist roaders! And most importantly..

        They (and you) are racists

      • As unlikely as it may seem, Naked#9000 – I have been specifically exempted from future punishment/sanctions by no less than the CCDI – thanks, in no small part, to an injudicious, if moderately amusing, mash-up music video I concocted at the expense of the ‘OldGuard’ during one of my infrequent/ill-considered BaijiuBinges.

        Apparently I had unknowingly/inadvertantly ingraciated myself with one or two of the younger members of the CentralCommittee/Princelings…

  2. So Global had this woman on pumping the most absurd prices in Vancouver in 2012. Typical realtor spin. I see Global is still in denial.

  3. Is my math off? The sales are 10% below peak according to these examples, not 20%.

  4. Cyril Tourneur

    $1000/day? Pfffft! Small price to pay to live in the BPOE.

    (I thought Somerville and Muir said this wouldn’t happen?)

    • Worse Somerville said we’d be higher in real terms on a 5 year horizon. I think inflation will be low, but that statement was nuts.

  5. It’s nice to see facts like these on vreaa. I’ve said before that if someone asked me about a real estate site I would point them to realestatetalks.com. Posts like these are the reason why.

    • Naked Official #9000

      Loyal cadre, Shut up and buy!

      • Good for you, keeping the shtick up for so long. It shows tenacity. I would have bored of it long ago.

      • Naked Official #9000

        It is the supremacy of Mao Tse Dong thought that courses through my veins and gives me the tenacity to carry on!

        Perhaps your schtick, that of the disinterested yet permanently bullish commenter will survive and thrive as long as The Naked Official!

        Perhaps it will, you have definitely proven yourself to be a loyal cadre, capable of carrying much water! Wu mao for you!

      • “permanently bullish commenter”

        What have I ever said that’s bullish? Please quote me.

        I think you are confused. You seem to think that because I’m not interested in the predictions of people who have been wrong for a decade as being bullish.

        In your world there are bulls and bears. In my world there are facts and credibility.

      • Naked Official #9000

        Loyal cadre, you know not of my world – in my world there are only interests – like those of site owners; vreaa being a hobby, a topic of interest to himself – RET being something entirely different.

        Am I cutting too close to the bone, cadre? Or is down the new flat and flat the new up?

        Keep fighting for harmony, loyal cadre! You will be rewarded for your efforts!

      • Nekkid, you should give up. Like cats and small children, ignoring is the best option. =)

    • If you made a single comment about real estate, instead of your periodic ad hominem attacks on the host and others who post here, we might have a better idea of whether you’re bullish, bearish, whatever. Host: J.T.S. is the new Fred. Please consider responding accordingly.

    • Naked Official #9000

      Like any good follower of the revolutionary “it’s different here epoch” – a Naked Official never gives up! Especially unit #9000, I am programmed to seek and destroy disharmony, leaving only harmony in my wake!

  6. I hate to say it, but Vancouver RE prices likely won’t go over the “cliff” this spring (as I previously ranted about). I am now calling for 2013 to be a somewhat flat to slightly positive year (maybe) and for the big unwind to take much longer than previously thought (barring another unforeseen 2008 style black swan event). In light of recent economic events, I believe sellers may opt to sit on the sidelines for a while longer and not rush for the exits en masse in the coming weeks. It remains to be seen if volumes ever return to the levels of years past, however. The usual cast of industry players and MSM shills will soon be out in full force to say, “that no news is good news”,”that flat is the new up”, “it is time to buy the dip again” and finally, “I told you so” come summer time. Whatever. Just bite your tongue…

    I’ll check in some time later in the year (at the earliest). Perhaps AAPL shares will be trading at $1000 by then? Maybe Vanc RE prices will also be at new highs too as all those with cash on the sidelines look for some hard assets to buy. For those currently drowning in debt, do something about it. You have just been dealt another get out of jail free card. Make the most of it, you may not get another one.

    Cheers all.

    • The only upside I see is a massive spate of investment from Asia. Other than that, I’m having trouble coming up with flat prices. Here is my point of view:

      In order for prices to be stronger in 2013 than 2012 MOI has to average about 7 or less. That will require a combination of higher sales and lower inventory. Otherwise prices will continue to deteriorate at a rate of about -6% to -4% year-on-year, (which is what 2012 will be as measured in late winter 2013).

      But 2013 is showing some worrying signs.
      1) Credit conditions for Vancouver are tighter due to new OSFI guidelines fully implemented, a Vancouver LTV ‘derating’, and weaker incomes from those commissioned on real estate activity.

      2) Population growth in 2012 was weaker than 2011, probably about 5000 less in total. That translates to less housing demand in 2013. (Housing demand lags population changes by about a year)

      3) Completions are slated to increase in 2013 compared to 2012. That will add to supply.by about 5000 additional units

      Not saying your prediction will be wrong, but I’m having trouble finding the scrapings necessary to posit a ‘somewhat flat’ price/sales scenario. I’m sure there are quantifiable arguments (i.e. not qualitative “markets are set by supply-demand” and first year econ “lower prices mean more demand” arguments) on the other side, I just haven’t heard them elucidated.

      • A small handful of criminal banksters toting bazookas are running the entire world. Fundamentals mean jack $hit to them. Justified or not, Asian markets are on a tear. There is still plenty of leftover Xmas HAM. Many of them are also scared $hitle$$ about inflation too. The higher priced properties swing/skew the averages around. The reported data will still be mixed, but the MSM will naturally only cherry pick the best parts. I believe many of the sellers who cancelled listings in recent months will sit tight for now, while others may relist at their former fantasy price levels. There will be considerable chatter that all the bad news is baked in and that the previously under-reported dip in housing prices was only a brief correction and that the window to finally get in is closing (again). It remains to be seen if this will be enough to push enough of the fence sitters back into the market, but I would not rule out that possibility. 2013 could very well be a “less bad” 2012. Over the long run (ie. several more years), everything will come out in the wash. Short term, I believe the leak can/will be reduced to a slow drip and fool many in the process.

      • So… anything more quantitative than ‘criminal banksters’?

        Lenders are asking for validated proof of income now; the 2013 term expiry vintage will almost certainly be coming under pressure.

      • I get what you’re saying, but I would argue that other external factors (in addition to the new OFSI guidelines) contributed to the softening of home prices in 2012. The situation is not as black and white as you have illustrated. There is plenty of cash out there to make up for some/all of the fall off due to more stringent lending standards (well at least in the short to medium term) and interest rates are likely to remain very low for the foreseeable future. Whether or not “HAM” returns in a big way remains to be seen. Markets don’t just trade on fundamentals alone. As we seen in the last few days, sentiment can quickly shift on a dime and those without the means to step up to the plate at a moment’s notice often get left behind or run over. I said a long time ago that I expect Vancouver to be made up entirely of “haves” and ” have nots” with virtually no middle class remaining at some point in my lifetime and to this date my outlook has not changed.

      • ” The situation is not as black and white as you have illustrated”

        I have laid out some simple and bearish measures that have quantitative values to them, I have not commented on other contributing factors ex data to support them. There is no more “cash on the sidelines” now than there was before, save a few quarters in 2008-2009. The difference is the terms and risk profiles. On that measure banks have been told to smarten up a tad because the aggregate risk to the economy is higher than their individual interests sum to.

        You may be right on a renewed bout of capital investment coming to Vancouver, I am having a difficult time finding the justification for it based on existing data, is all. The previous bout of capital excesses in 2010 have some data that ex post can be traced. Anything of similar mode looks unlikely in 2013, or, at least, the effect will be more muted than previous. Add in the factors I mention and I still get a negative number.

      • @jesse & @bullwhip29, the only thing that might support bullwhip’s theory maybe:

        http://www.fcpablog.com/blog/2013/1/2/china-officials-fearing-crackdown-are-dumping-illicit-proper.html (Courtesy VCI…)

      • Robert Dudek

        So at -4% to -6% per year, you are calling for a soft landing?

      • I would not call -6% to -4% a soft landing. An MOI averaging about 9-10 for 2013 would be around -6% YOY on the Teranet according to my model (which is, remember, only a model!). If things start deteriorating quickly in the spring I’m prepared to downgrade my estimates. Think of this as the “most likely” scenario but the distribution is not normal: the tail extends to the downside. IOW this is not the “expected value”.

        I suppose I’m being a bit cautious on bearish estimates going into 2013, if only because last time I started beating my chest in glee the market regained all of its previous losses. As a soothsayer, one doesn’t recover quickly from such a humbling experience! In any case, I’m not heavily invested in Vancouver RE so I prefer to be “pleasantly surprised”.

      • Robert Dudek

        Could you define a soft landing, please?

        And don’t say flat prices – that is not a “landing”. In a landing, something that was up (e.g. airplane) comes down.

      • Softlanding (sic) is a Microsoft Gold Certified Partner:

        http://www.softlanding.ca/About-Us/Pages/default.aspx

      • Bull/BOC/MOF fantasy soft landing would entail years of price flatline while inflation catches up and debt loads somehow steadily come under control.
        But it just isn’t going to happen.
        Who would über-overextend themselves to buy at still stratospheric price levels without the hope/promise of future massive price gains?

      • I’ll say a “soft landing” is one in which someone on a 5 year loan term can, upon renewal and with 80% LTV, sell without going into negative equity.

        -4% per year over a 5 year term is -20%. With principal payback that’s, by my completely arbitrary definition, barely a “soft landing” on conventional minimum 20% DP.

        -6% nominal is -27%. That I would not put as “soft”. Call it “medium”. In real terms that’s getting mighty close to a full “correction”.

        But imagine what 5 years of -6% would look like for real-estate-dependent occupations, given what we know about the relationship between price changes and sales/inventory. Ouchie.

      • Ralph Cramdown

        Why can’t a soft landing involve flat nominal prices? Keep in mind that ‘soft landing’ is a metaphorical term coined by optimists.

        To see the difference between ‘flat’ and ‘declining,’ it helps to look at both nominal and inflation-adjusted long term house price charts.

        From a brief google sampling, it appears the latest consensus definition among bank economists is a ~10% decline in national sales volumes and prices. I expect this term to continue to be defined down somewhat by the optimists and the pumpers as new data come in.

    • Naked Official #9000

      @re lurker:

      Disloyal cadre!

      Such disharmonious sedition! Why are you spreading western propaganda – pure lies – throughout the concessionary area? This racism will be recorded in your file!

    • Ralph,

      I think I explained clearly that for something to land it has to be in descent (like an airplane).

      The larger point is that “soft landing” and “crash” are mutually exclusive. By defining the one, it helps to define the other. So many people here just assume that there will be a crash, rarely defining the parameters of that term.

  7. [#CouldBeWorse]…. WednesdayZen…..

    “If things don’t dramatically improve in 2013, I will shift to Dubai or Canada.” – Hajji Ahmadzai, Afghan/Kabul Construction Contractor

    [NewsWeek/DailyBeast] – You Say 2012 Was Bad?: Even the Taliban Are Worried!

    …”It’s not an easy decision, he says; unlike millions of other Afghans, he has stayed in his home country through years of war and Taliban rule. “I’ve never left my country in my entire life,” he says. “But I fear that a civil war will endanger my life, my family, and property. The rich will be the first targets.” Since the U.S. and allied withdrawals began, his business has almost dried up. He owns five houses in the upscale, heavily guarded Kabul neighborhood of Wa zir Akhbar Khan. At present, he says, he can find no takers for any of the properties, even though they had been bringing him monthly rents of $10,000 for each.”….

    http://tinyurl.com/asokxnq

  8. Those prices are all still way too high. Anyone paying $2 mil for a 33′ lot home just west of Cambie isn’t a local and therein lies the problem. All that’s happening now is some residents of the Middle Kingdom are getting a better deal on their vacation homes, its not anywhere close to affordability for working Vancouverites.

    • Naked Official #9000

      Such disharmony from a consistently disloyal cadre!

      These are not vacation homes! These are temporary accommodations in this colonial station!

      The 33′ lots are perfect for 32.5′ wide stucco boxes!

    • Angleterre – > Agree prices still _way_ above fundamental values. But this is, of course, how things look when a downturn gets underway.

  9. Over the holiday I was told of a couple in their early 50s, they’ve been together a few years now and would like to move in together but neither can sell their townhomes. She has had hers listed 3 times over the past 18 months with no offers. He can’t afford to replace the carpets, fence, fix the roof issues and other small things needed to put his place on the market. They both bought in the last 6 or 7 years and I don’t think either feel they can take a loss so they wait for an improved market. I’m curious to see how long this lasts.

    • “neither can sell their townhomes” = neither is prepared to steadily drop prices until they hit a bid.

    • Replacing carpet in a t/h isn’t a lot of money (while the fence and roof are likely strata issues). If they are so strapped for cash, what in the world are they waiting for? I don’t get it. Even more bewildering is how they both could be underwater if they bought in the time frame you have suggested (unless we are not talking Gr Vanc for whatever reason or the people in question have refinanced a few too many times)

      • Not much $, to have it done is probably a few thousand, but what I don’t get is how all the other minor fixes are necessary to sell it? The place doesn’t “show” well so… fixing the deficiencies will get people to spend more? I guess that’s the way it is — I’m the wrong guy to ask about this type of market — but I would have thought either they spend the $ and fix the problems, or lop a few $K off the sale price after the building inspector finishes his/her report.

        A related anecdote was a family member buying a place in E Van about 6 years ago. Building inspector found a few deficiencies, the owners agreed to have them fixed before close. Big mistake, the previous owners had no incentive to do a proper job and the fixes were temporary and cosmetic at best. If deficiencies are to be repaired, the lesson is ask for full discount or add premium to the cost of the fix unless it’s inspected again. Not possible in “seller’s market” conditions of course but in more normal times I would bargain hard on any scratch and dent.

    • Ralph Cramdown

      I bet they’d make great landlords!

  10. Two properties…
    Bought 6-7 years ago…
    carpet, fence, roof, and other things to fix?????
    cash strapped???
    Get these people a doctor quick…
    they are deep underwater…

    Silver

    • Actually a question for Silver…

      If you’re a business, but you lease the place, do you pay property taxes in this City? (I suppose I could look it up, but since you already know… =))

      • Carioca Canuck

        In Calgary, the answer is no. Been there, done that……my lease was triple net, but “property taxes” were the landlord’s problem, and always have been in all the scenarios that I have explore,d or known of. I suspect in YVR the answer is the same.

        You do however pay a “business tax” which in my case was some $3,200 a year, directly to the city. Just for the privilege of having a business. Now, bare in mind, you still had to pay your annual license fees to the city as well, in addition to every single other extortionist fee and license the union pricks in city hall could dream up.

      • I own, I don’t say I lease.
        I believe what you are commenting on is the statement to me from the Legal Office Voice at the B.C. Supreme Court which told me that “We”, that is all of us do not own our land/property the “Crown” does! ..and the “crown” can do create whatever it decides as far as “fee’s”/”rent” on the crown owned property …” that it would like to”. Followed by… “The Constitution of Canada” is “irrelevant” to “us”, “We only deal in Administrative Law”.
        You don’t own… means that you “rent”.
        Guess “Fee Simple Absolute” means nothing….. now.
        I pay way more in taxes and fee’s as a business than its worth to me…after 25 years,
        its time to quit, profit, sit back, drink coffee, and watch… the public the fun….
        the “public employee/thug Trustee’s”, they are not “Administrators” , except in their own thuggish minds…can cover their own indexed taxes/wages, and pensions… see how well that works…

        Silver

        Silver

  11. this world-class city…hometown of 1-800-got junk
    how could prices go down

  12. I love these stats. Makes me wanna do it Gangnam style around the living room. I’ll spare you gentle readers the YouTube link.

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