“It’s Only A Flesh Wound” – Vested Interests and Market Participants Make Light Of Market Weakness

Sales have dropped, prices are falling. Early in a bear market, players are so conditioned by years of bullish action that they ignore evidence of a turn, and show optimism in the face of sales and price weakness. This is described as the bearish “Slope of Hope”. It contrasts with the “Wall of Worry” that a bull market climbs. Expect to see realtors, industry insiders, and others with vested interests, all downplaying price drops over the next 2-3 years. They will be reassuring themselves, and others, that all is ‘a-okay’. There will be calls of “Buying the dip”, “Bargain hunting”, “Buyers’ markets”, “Bottoms”, etc., etc.
Here follow early examples. There’ll be lots more like this. We’ll collect them here, with a sidebar link. Please e-mail us with any such quotes you come across. (Later in the bear market these voices will grow silent, and, later still, when we reach the eventual trough,  they’ll be at their most pessimistic.) -vreaa

“We’ve noticed a dip in the demand for downtown condos, but it’s a slight correction rather than a downturn.” – Andrew Carros, a real estate agent with Sotheby’s International Realty Canada’s Vancouver office, in the New York Times, 6 July 2010 [What’s the difference between a ‘slight correction’ and the beginning of a severe ‘downturn’? -ed.]

[On sales drops, and possible price drops] “This is probably more of a ‘one-off’ rather than something we have to be concerned about for the rest of the year into next year.” – Andrew Pyle, ScotiaMcLeod Wealth Advisor, CBC News 6 Jul 2010 [ @ 1:36min]

“We will see both prices and unit sales decline towards the end of the year. … This should not be interpreted as a severe correction but rather a natural reaction to the market having peaked quite early this year.” – Phil Soper, president and chief executive of Royal LePage Real Estate Services, Vancouver Sun, 7 July 2010

“The up and downs do come in life, but, generally, it will go up.” – Harpreet Bajwa, local RE flipper, CBC news, 6 July 2010

“Buying activity is likely to increase again in the fall. Inventory levels sit at about 9.3 months of supply based on the current pace of sales, the highest they’ve been since March of 2009, but they are at or near the peak as to where they’re going to go.” – Cameron Muir, Chief Economist, B.C. Real Estate Association, Vancouver Sun, 15 July 2010

“We should see a summer slowdown that is typical of any summer market. Prices should see a mild correction of 2-3%.” But Kinch warns consumers not to misinterpret this as a bubble that has burst. – Peter Kinch, mortgage broker, newswire.ca, 19 Jul 2010

“My expectation is for a gradual improvement in sales over the next 18 months rather than the roller coaster of activity we’ve seen over the past two years.” – Cameron Muir, Chief Economist, B.C. Real Estate Association, Vancouver Sun, 30 July 2010

“Sales activity is expected to pick up again next year as we return to a more balanced market over the coming months.” – Randi Masters, Victoria Real Estate Board President [in a VREB release 3 Aug 2010 that reports a 43.5% drop in July sales, YOY.]

[REBGV reports that a total of 2,255 homes were sold in the Greater Vancouver region in July 2010, a 45.2 per cent drop from the 4,114 homes sales in July 2009. – cbc.ca 5 Aug 2010]

“We had a relatively active beginning to the year and things are sort of normalizing now.” – Robyn Adamache, market analyst, Canada Mortgage and Housing Corporation, cbc.ca 5 Aug 2010.

“I penned this editorial to calm fears that the real estate market in Vancouver was collapsing.” … “The gyrations of real estate values and mortgage rates shouldn’t keep us up at night. A house is not a stock, to be sold when earnings disappoint or a sector falls out of favour.” … “Relax, fire up the barbecue and enjoy the rest of the summer.” – Harvey Enchin, Vancouver Sun editorial, 9 Aug 2010

“We’ll see firmer market conditions in many markets by the time we reach the fall” – Cameron Muir, Chief Economist, B.C. Real Estate Association, Vancouver Sun 12 Aug 2010

“Even if the economy collapses, house prices don’t tank. You get some drop, but it’s typically modest because there’s a growing population and there just isn’t a lot of land.” – Jock Finlayson, B.C. Business Council, Vancouver Sun 21 Aug 2010

“That opportunity to buy at a discount is quickly disappearing.” – ‘eyesthebye’, bullish market commentator, RE Talks 29 Aug 2010

“Housing starts, sales of resale homes and average home prices are all expected to rise next year [2011] as BC shakes off the recessionary blues, according to the BC Real Estate Association” [sales by 5.3%, starts by 17%, prices by 1.6%] – Real Estate Weekly, 3 Sep 2010

“In terms of any kind of impending doom for the consumer in the marketplace, that certainly isn’t in the cards right now. Household financial conditions are relatively strong today.” – Cameron Muir, Chief Economist, B.C. Real Estate Association, Business Today, 1 Sep 2010

“It’s a great time to buy a home. If ever there was a time to buy, it is now.” – Martin Nel, a senior BMO official, Financial Post, 1 Sept 2010

“The risk of a 1990’s-style housing market correction are minimal.” – David Onyett-Jeffries, RBC economist, Financial Post, 9 Sep 2010

“If you’ve ever wondered what a soft landing in housing looks like, this may well be it.” – Pascal Gauthier, senior economist, Toronto-Dominion Bank, Vancouver Sun, 15 Nov 2010

“The market may slow down in the next few months, but don’t expect to see any significant price declines.” – silverman (local realtor) at RE Talks, 21 Mar 2011 10:50pm

—

“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.” – ‘Cooling market offers investors a ‘in’, Canadian Real Estate Magazine, 15 Feb 2012

“The pace of home sales slowed during the first half of the year. However, the downturn is likely to be temporary as population growth, persistently low mortgage rates and encouraging employment figures suggest a stronger second half of 2012.” – Cameron Muir, BCREA Chief Economist, BCREA news release, 12 July 2012

“I met a realtor today at an open house. He was totally convinced that this was a quite summer lull and that there would be a feeding frenzy come September. He also mentioned that other realtors were very worried that this is the end of the good times, but not him.”
– Loon at VCI 4 Aug 2012 6:47pm

“Some potential homebuyers in Vancouver are taking a breather over the summer months”
– Cameron Muir, BCREA Chief Economist, 14 Aug 2012

“There is a bubble… What we see now is probably, at worst, a soft landing.”
– Rick Waugh, Bank of Nova Scotia CEO, Globe and Mail, 18 Sep 2012

“I think the market actually during the last six months has adjusted downwards. I think everybody know about that. And it went up too fast and it’s just taking a little bit of an adjustment.”
– Philip Chan, Vancouver Realtor, on ‘Vancouver Housing: Bubble or Bust?’, The National, 20 Sep 2012

“This is just a brief pause before the Mainlanders return again. Clearly the high end of the market has not been impacted.”
– CBM at yattermatters 1 Oct 2012 9:26pm

“This is not, in my view, the beginning of a major correction, or recession, or decline in housing prices of 15% or 25% as some predict.”
– Helmut Pastrick, chief economist for Central Credit Union 1, the central financial facility and trade association for the B.C. and Ontario credit union systems, on CTV 2 or 3 Nov 2012 (‘Deflating Vancouver Real Estate Bubble’)

“This isn’t a sharp correction, this isn’t a U.S.-style correction, it’s just simply an unwinding of the excess valuation that was created by artificially low interest rates for a long period of time.” – Craig Alexander, chief economist at Toronto-Dominion Bank, Financial Post, 9 Nov 2012

“Most homes here are bought by people with wealth. They can afford to hang on and wait for better market conditions, so it makes sense that listings are getting pulled. The rich are not the same as most people, otherwise Vancouver’s prices would never have risen so far above average household incomes in the first place.”
– ThinkRight commenting at Financial Post 4 Dec 2012

“I’m cautiously optimistic. In terms of changes to mortgage rules, they came in 3 to 4 months ago, we’re feeling the effect now, in the past after mortgage changes, you get about 3 to 6 months where things soften up, then things begin to pick up. So, you know, I’m cautiously optimistic.”
– Mike Stewart, local realtor, self posted youtube video, 20 Nov 2012