[chart care of b5baxter at vancouverpeak.com 8 Mar 2012]
“Here it is dead. Dead. Dead. Remember 2008? It was the year where the spring never came, listings soared and sales evaporated. Vancouver is really trending down that 2008 line right now but stats in all areas are really worse than 2008. March is on pace to have sales down 30% at least over same month last year.”
– Vancouver Realtor ‘Darren’, as quoted at greaterfool.ca 8 Mar 2012
You only die once.
Bubbles too.
Perhaps this is it.
Godot arrives?
– vreaa
Vancouver Real Estate Anecdote Archive 
Aparently, sales were not great today as well… the trend seems to be pretty strong. If 60 listings are added net daily, we could reach 20K inventory by end of May and 22K by end of June. That would be unprecedented. What happens next is the real question.
True. But extrapolation is dangerous. I mean, it could get worse… 😉
exactly! today, we netted 109 more listings. It can get a lot worse indeed…
Look at prices. They tell the true story of where the market is heading.
Wrong. Excess supply precedes a drop in prices (comparing apples to apples).
Yeah, agree with Canis.
Volume leads price.
So wrong! So if the market always goes up after prices have gone up then how is that prices ever go down? Maybe you as a homeowner should think about that a bit.
If you wonder where the sales are happening, it appears to be Marpole.
An outsider might think Darren is Gil. If you ain’t closing you ain’t sh!t.
“It takes BrassBalls to sell Real Estate.”… “Always be closing.” – David Mamet
Darren who???!!!
I will believe the bubble has popped when prices are down at least 25% and newspapers are full of headlines about the flood of foreclosures.
Agreed. Until then, it’s just a pullback in a bull market, just like 2008, and we haven’t even seen that extent yet. 2008 was just a little pullback in a raging bull market, and people bought the dip with both hands. We better correct FAR deeper than that if you want to say “bubble popped”. So lets not count our chickens just yet. With interest rates going nowhere, I personally predict this bubble lives on. “Popping” is not in the cards.
http://seekingalpha.com/article/224257-canadian-housing-another-debt-fueled-bubble
We will likely see fairly flat pricing until summer. If listings continue at the rate now, I think summertime more people will realize that this market is screwed. We could see a similar pattern to 2008 when listings soared, sales deteriated, and then prices tumble. Nothing will save the market this time. After the rest of Canada sees what’s going on here, other markets will start declining as well. If you really want to buy now, move to Hope.
“We could see a similar pattern to 2008”
You mean when the market rebounded after the little correction, to all time new highs? I agree, as long as interest rates remains so dumb. And they will. Don’t expect worse than the 2008 correction, so bulls, sharpen your pencils and buy the dip before the next round of Canadian rate cuts propels our RE market ever higher, yay, free money = free houses!
Basement -> I suspect that next time round there may be a different dynamic. What got folks to buy last time was a dropping interest rate… not just low interest rates, but rapidly falling interest rates. Rate of change of interest rate is what fuelled the after-burners. ‘Affordability’ as defined by monthly payment got a lot better, quickly, and that drew some back in; then rising prices drew more, etc.
But, as someone posted somewhere here yesterday in a related matter, people are now ‘blase’ about low rates.
So, unless the BOC is planning on dropping rates precipitously from here (could they possibly ??), we think it’ll look different next time Vancouver prices drop 10%-15%. Rates at current levels will not be enough to draw large amounts of people into a falling market.
Also, other factors: More market participants have now heard of the bubble ‘fears’, China is cooler, etc.
There will be some who step in, of course, but, we suspect, not enough.
Supply will overcome demand.
Perhaps a bounce at 10%-15% off; a more important bounce at support around early 2009 lows (now more than 25%-off in some sectors); but each of those price support levels are most likely to fail.
There’s no chance if money getting cheaper. Banks are now bailing on high risk mortgage and preparing for what’s to come. 2008 happened for a reason. Prices were maxed out for where interest rates were. Only interest rates saved the market back then. That fuelled more speculation and erupted the market with greed. Everyone wants to make a quick buck, and RE was the way to do it. But when markets turn, nobody wants a piece of it and the mentality changes. I have friends that felt the way you do but now changed and see the picture ahead of us. After losses occur, this will change the mindset of all the people in our country.
“What got folks to buy last time was a dropping interest rate… not just low interest rates, but rapidly falling interest rates”
that’s a simplistic approach to how real estate values fluctuate. If it were so easy to buoy house prices with low interest rates it would have fixed the US slump long ago. Obviously there is more at play, both in the US and here locally in Vancouver
Low interest rates allow the bubble to persist, if not guarantee it albeit. I think the short spike in rates in the mid-2000’s popped the US bubble, and it never came back thankfully, for them, even after rate lowered. But the rate spike popped it. Our boil wasn’t ripe to pop as of then, and now that it is ripe, no interest rate spike in the foreseeable future. A rate spike would destroy this bubble now. Too bad it won’t happen for a very long time because those in power think free money is the new normal.
Basement -> Yes, a rate spike will destroy the mania now, but it is not necessary to have a rate spike for the mania to end.
Manias really do implode under their own weight at some point; like a forest fire running out of fuel.
There will be no China money supply bazooka this time so the drop from these levels will be epic. Unless you are a morbid creature, I’d get as far away as possible from this one because there will be little left of worth hanging around for. Remember a 50% drop will still leave Vancouver one of the most unaffordable cities in the world.
“Remember a 50% drop will still leave Vancouver one of the most unaffordable cities in the world.”
That is so true, and why I hope for a proper correction of at least 2/3 off, and tbh more. That means lots of job loss and woe, too damn bad, it’s the web we weaved with these stupid interest rates. A mere 50% off is just not enough, it means a dump in East Van will be $750,000 or so, ballpark. I don’t think so, not from my wallet anyway.
VREAA, “I suspect that next time round there may be a different dynamic. … that drew some back in; then rising prices drew more, etc…Supply will overcome demand.”
Seems world’s top economic guru agrees with you.
Steve Keen is Professor of Economics & Finance at the University of Western Sydney, Forbes magazine’s Most Accurate Forecaster…
When asked specifically, what is your forecast for the remaining housing bubble nations, such as Australia, Canada, UK and Hong Kong? “They have to burst because they are driven by accelerating debt … Inevitably asset bubbles have to burst, those countries will suffer the same fate as America, but delayed by slightly different timing in their debt dynamics.” – PressTV
He goes on to talk causes, mainly private sector is deleveraging, spending less, paying debt down. Unfortunately, people suffer from euphoric expectations based on past success, and aggregate demand reduces compared to aggregate supply. It’s only a matter of when. This guy calls the crashes.
Another terrible day today. Here are the #s from paulb:
New Listings 229
Price Changes 76
Sold Listings 69
TI:15454
FTFY: Another great day today.
Terrible is you’re a flipper. Great if you sold last year. Stupid if you buy today 😄
15454 – early next week we’ll be crossing that green 2009 line. Booyah.
Well, the chart says it all. Listings are on track to break records for the last 7 years and are nearly double those of 2006 already. This should be an interesting summer and fall.
I’m not sure wha the real market situation is, but I talked to couple Chinese realtor friends in the Tricities area. They all claim that business has been booming this year. I did see many sold signs lately. Is this another round of craziness just moving toward this area?
Typical spring activity. But total listings soaring. As the spring season moves forward into June, sales normally cool. Don’t worry about others buying right now. They’re suckers and have no idea what’s going on because they don’t do any research. Why buy now when prices aren’t even going up?
The aggregate numbers are showing a less-than marquee level of sales. Not a disaster, though, so I think your eyes are seeing regular seasonality. March sales are almost always higher than those in November-February.
I agree, the craziness persists in some pockets. The number of listings has increased but in the Main and Fraser area of Vancouver, crappy old dumps are still selling above asking. I looked last weekend at a dumpy Vancouver special on East 38th on a 33 x 116 lot. It was rented out like a rooming house and all the rooms were small. No updates at all. There were a lot of young families at the open house so there must have been a bidding war.
That area is currently supposedly extremely chic.
Sell now or be priced in forever!!
‘World Class’, eh?…
[CBC] – Vancouver Playhouse Theatre company to shut down: Financial problems force 49-year institution to go dark
“We can’t continue operations with the amount of debt that we have and no realistic way of paying it back,” said Playhouse theatre company chair Jeff Schulz…
http://tinyurl.com/7n6644x
It’s sort of metaphor for all of Vancouver, isn’t it…
Agree this kind of development is very important.
We are not a cultural capital, we are a resort town.
Also, disposable income has been squeezed out by housing costs.
Yeah but the Vancouver Playhouse Wine Festival isn’t going anywhere… Clearly drunken schmoozing is more important to Vancouverites than art & culture. Sad but not at all suprising. This town is all instant gratification and appearances. Boring.
world class? vancouver has never been identified as a cultural centre anyhow….pockets of creative class but never a New York or even close second to Toronto.
Per capita, it doesn’t even come close to much of the BC Interior and Island… where practicing artists actually can afford to live.
…that is, unless you count hipster “artists” with their Instagram-type apps sipping (or serving?) soy lattes in S’Bucks and mutually congratulating each other on spurious accomplishments.