Vancouver Year Over Year Price Change – “A pretty sobering chart”


– chart care of Ben Rabidoux, of ‘The Economic Analyst‘, by e-mail, 16 May 2012, who adds “I’m sure part of the decline is due to composition of resales, but pretty sobering chart nonetheless”.

38 responses to “Vancouver Year Over Year Price Change – “A pretty sobering chart”

  1. Appears chart maker got a paper cut. What’s that crimson line? 30% spread from peak to trough. Aah, nose bleed.

  2. It begins

  3. Pop!

  4. homelessindunbar

    I would love to believe that the crash has actually started but a colleague of mine just sold their house (in Mackenzie Heights, close to Balaclava Park) over list (list price was $2.3M). The house was for sale for 5 days…..

  5. houses in Shaughnessy are not selling – brings the avg down. Everything else on the east and west side is moving. I doubt this is your opportunity

    • Point grey isn’t moving and Marpole is dead. Richmond is in the ditch and condos sales are toast. When prices were on the way up, where were the bulls saying its the high end skewing the prices up? In a bubble, this is what happens. The high end bubbles up first, then crashes down first. And with a whack load of condos flooding the market, this will be an interesting fall. And F1 will be speeding outta here.

    • Everything else on the west side is NOT moving. There are some sales, but there are also multiple houses that have been listed for months and not sold. I’ve walked or driven by them every week.

    • Why aren’t the homes in Shaughnessy selling?

  6. reality check

    very interesting graph vreaa but I have to say that everything listed around me (east side) is selling quickly (1 week) and for over asking usually around the 1.1 million mark.

    • Which is why it’s so hard to believe that the overall market is setting itself up for a shellacking. The overall regional numbers are showing weakness and that is made of hot areas and those approaching zero entropy. In net it’s not good but this market has surprised before so don’t count him out.

  7. reality -> No need for the “but” as the two statements are not incompatible… average can come down, while some areas still selling. We’ve noted a ‘narrowing’ of the markets for months, and the fact that some pockets are still selling is not incompatible with a topping process.

    As we all have discussed, averages are not the most reliable reflection of what’s happening in the market… easily skewed by a few outlier sales (or lack of such), especially if sales volumes are lower.
    Best numbers are same home sales time1 compared with time2… but we only get the Teranet number 3 months after the fact. Also, benchmark is likely more reliable than average…. still, the ‘average’ is headlined by the REBGV (they put that in their main chart, after all) and it’s inevitable that we analyze the headline average, warts and all.

  8. LS in Arbutus

    People can “afford” $1.1 million and I guess they didn’t get the memo. So these places are still selling. Everything $3 million and above and most new construction over $2.0 million here on the west side is not moving. Under $2 million and over $2 million knock downs still moving, but certainly NOT like they were. Definitely this is rotting from the top down, but I guess this is not surprising. Who can afford a McMansion for $3.3 million on a 50 foot lot? Not many people I know, even the ones that are rich, by most people’s measure.

    • LS,

      Traditionally, listings east and west for detached are about the same quantity. Now:
      west – 991
      east – 538
      Homes east still selling briskly with entry level (teardown) starting somewhere is the 700s. Can’t find nicely appointed character home on std lot for any less than 1million now – and usually well above.

      • LS in Arbutus

        Thanks, that’s interesting. I actually don’t follow the east side, but follow the west side, SFH, very closely. I have since, it seems forever. Anyhow, it makes sense to me that there are so many listings on the west side, compared to the east, because everything is too expensive on the west side. People can’t afford it anymore. Prices are in ridiculous territory when only multimillionaires can afford to buy.

  9. Never mind sobering charts… Imagine the anguish, the knashing of teeth… the wailing and sobbing – at Dougie Luv’s DougieDog… whose DragonDog is no longer the ‘World’s Most Expensive HotDog’.

    Exit the Dragon, enter TheOneDog…

    “At $1,501, TheONEdog, a creation of Little Rock’s “Hot Dog Mike” Juiliano, is the world’s new most expensive hot dog. The ingredients: a premium quarter-pound all-beef dog topped with a lobster tail, saffron aioli, and gold dust on a gourmet potato bun.”

    [BloomBerg] – Saffron Costlier (and Tastier) Than Gold in Most Expensive Hot Dog

    http://tinyurl.com/7e82zod

    • sir, i OT your OT …
      “Yankee Candle Chief Executive Officer Harlan Kent is battling for men’s equality in the candle industry … launched a limited-edition collection of men’s candles available in four fragrances: Man Town, First Down, Riding Mower, and 2 X 4”
      http://tinyurl.com/c4fbvqj
      “… Men represent 35 percent of candle users, Yankee’s research shows.”
      what kind of research is that? … how many men do you know go for scented candles? … am i reading the onion? no! it’s really bloomberg … check it out … check also their careers page … seem to be doing alright in the malaise … have a nice day 🙂
      http://www.yankeecandle.com/yankee-candles/man-candles

    • Asking for someone else: does it come with ketchup?

  10. Will this thread accept a long post? Lets find out……

    This is just a little snapshot from the rest of the planet where housing bubbles are concerned. They are absolutely everywhere and percolating up or bursting in the strangest of locations. Some are already busted, others are an evolving threat.

    We know all the usual suspects already from past and present, of course.

    The major countries past and present get all the headlines. Like Hong Kong, England, Ireland, Canada, Australia, China, Macao, Singapore, Dubai, the US. But what about Indonesia, Israel, Turkey, Brazil, Kenya or South Africa? Is the same madness taking place in South America and Africa too?

    You bet it is. Call it epidemic.

    The entire globe is awash in a housing frenzy and the burst (when it comes) could potentially derail all of us for a generation. We are heading for an epic meltdown that only the most savvy of investors will be able to appreciate, let alone navigate to reach the shores of economic certainty and safety.

    Sadly, there are few good solutions for what is really coming except a devastating worldwide depression and a period of debt delevering that will eventually wipe out the wealth of millions of people across the globe. Wipe out some of our wealthiest families too.

    It looks like a South Seas moment to me. Just a lot worse. Nobody will be spared.

    But this time environmental sustainability is also on the line. We have no place to run anymore. People across the globe fear for access to safe food, drinking water and essential resources. We face energy shortages and political change while we ponder our worries from within a cage of crazy self-deluded certainty of the absolute unknown.

    Ironically we live in the midst of one of this worlds great ages of social enlightenment and scientific achievement. Never were we better educated. Never were we so poorly trained in how to be prepared to confront the simplest of life’s daily challenges. We don’t know our arse from a supermarket Swiss Cheese. We have no idea how most of our food is processed, preserved or even created for example.

    Modern day hunting is an excursion through a supermarket with isles of canned goods, frozen pizza and crackers. Nobody even cares where it came from or how it was made. Who the hell knows how to dry meat, salt pork or age a beef carcass anymore; never mind salt a fish or grind a handful of edible grains to make bread. Not that it matters. We are sure somebody else will look after the details if things get tough.

    Won’t they?

    We are so screwed there is not even an exception for our lack of collective knowledge. We do not in fact have a similar parallel in all human history other than the example of Easter Island where the inhabitants actually cut the very last of their trees to move monuments before collapsing as a society.

    That’s right. The last damn tree. Not even one remained.

    Not even the seed to make more…….but let’s not dwell on how that turned out. Let us also not forget though that it was the insanity of herd behaviour unable to change course before it was too late that brought the downfall. Are we doing anything different today as we grind out every last bit of juice from the global resource supply and pour it into a folly of false wealth creation that will soon amount to nothing more than fluff and extravagance? As we dig up every ounce of copper, clear cut our last hardwood forests, drain lakes to irrigate cotton and rice fields or hook the last Tuna in the Atlantic….we are on a collision course with a sad reality.

    We don’t know how to manage our resources anymore. We don’t seem able to slow down and take our medicine. Instead we go full steam ahead building roads to nowhere and attempting to relive the past glories that cannot ever be achieved again. Our housing bubbles are a warning of the peril that lies ahead. The whole globe is steeped in this idiotic fascination for false wealth and it is leading us down a dangerous road. Not just as a society, but as a species.

    While they build ghost cities in China, spanking new Irish Estates rot into the ground forlorn and unloved in the Isles while thousands of freshly minted units of housing sit empty across Canada and America. They are investment properties. A store of wealth. How foolish is that? Just a sample of course…….that is just a drop in the big picture presented here. The whole globe is swimming in this insanity now and there cannot be redemption in the ownership of more of the same. Just staggering losses in the final equation as the crows finally come home to roost.

    Are we condemned for it too? We shall see.

    You decide.

    Housing bubble in Israel
    http://seekingalpha.com/article/248356-housing-bubble-in-israel

    Northern European housing Bubbles
    http://www.infowars.com/the-northern-and-western-european-housing-bubble/

    Swedish Housing Bubble – Yup, Sweden has a housing bubble too says Robert Shiller
    http://www.creditwritedowns.com/2012/01/robert-shiller-sweden-has-a-bubble.html

    Norwegian Housing Bubble – Bloomberg, March 2012 —– Not here too!
    http://www.businessweek.com/news/2012-03-15/norway-risks-housing-bubble-as-krone-steals-agenda-mortgages

    Finnish Housing Bubble Bursting – March 2012 – what the hell? This is getting serious….
    http://housingfinland.blogspot.ca/

    Denmarks Burst Housing Bubble- How it is wreaking havoc on the economy -Bloomberg Feb. 2012
    http://www.bloomberg.com/news/2012-02-12/danske-bank-ceo-says-burst-housing-bubble-now-polluting-retail-portfolio.html

    French Housing Bubble – This one could be epic…just ask Evans Ambrose Pritchard of the Telegraph
    http://www.telegraph.co.uk/finance/economics/houseprices/9244152/France-faces-40pc-house-price-slump.html

    WSJ – Massive Turkish Housing Bubble – (about to burst? Holy Crow…who knew, Eh?)
    http://online.wsj.com/article/SB10001424052702303425504577353460769167448.html

    Gargantuan Iranian Housing Bubble and Hyperinflation
    http://www.tradersnarrative.com/iran-blows-a-stock-market-bubble-4737.html

    Brazilian Housing Bubble
    http://www.globalpropertyguide.com/news-The-Cusp-of-a-2012-Brazilian-Property-Bubble-Burst-1085

    Is Brazils Property Bubble about to Burst? — April 2012
    http://www.moneyweek.com/blog/is-brazils-property-bubble-about-to-burst-58412

    Kenyas Housing Bubble – Is it about to burst now too?
    http://www.theafricareport.com/index.php/news-analysis/will-kenya-s-property-bubble-burst-501806922.html

    The Housing bubble in Kenya
    http://likechapaa.com/2011/03/the-housing-bubble-in-kenya/

    South Africa’s Housing Bubble (In the process of bursting)
    http://housepricesouthafrica.com/2011/03/07/a-closer-look-at-real-house-prices-reveals-a-scary-picture/

    Swiss Housing Bubble – May 3 2012 – UBS Index is heading into the Risk Zone?
    http://www.ubs.com/global/en/about_ubs/media/switzerland/releases/news-display-media-switzerland.html/en/2012/05/03/2012_05_03a.html

    India Housing Bubble
    http://www.smh.com.au/business/world-business/mumbai-is-the-worlds-least-affordable-home-market-20120412-1wsvw.html

    UK Housing – Prices finally falling as the squeeze is on. Well, at least this one was telegraphed.
    http://www.moneyweek.com/investments/property/uk/the-squeeze-tightens-on-the-uk-housing-market-21800

    Indonesia Housing Bubble? “Residential prices in greater Jakarta have increased around 25 percent on average over the past year”……..does that sound normal to you?
    http://www.reuters.com/article/2012/03/16/indonesia-economy-cbank-idUSL4E8EG1XD20120316

    Is this an Easter Island Moment? Jared Diamond, author of Collapse seems to think so……
    http://drake.marin.k12.ca.us/staff/wing/Collapse.htm

    Beirut and Lebanon Housing bubble? Oh come on, man…..that is ridiculous!!!
    http://en.wikipedia.org/wiki/Lebanese_housing_bubble

    Explosive Prices in Addis Ababa, Ethiopia……..wait, isn’t that almost the poorest country on earth?
    http://www.ezega.com/RealEstate/PropertyDetails.aspx?page=index&PID=7365

    Colombia, Chile and other parts of South America too..?
    http://knowledgetoday.wharton.upenn.edu/2012/01/deja-vu-for-latin-americas-house-hunters/

    Bangladesh, January 2011…
    http://www.bangladeshdir.com/press/catalog/bangladesh_bank_cautions_about__painful__crash_in_real_estate_sector.html

    Pakistan too? OK, this is getting crazy.
    http://www.realestateproarticles.com/Art/4739/278/Property-Market-In-Pakistan-What-The-Future-Holds.html

    Well then how about Lithuania, Luxembourg, Macedonia, Madagascar, Malawi, blah, blah, blah. Does anyone really think this is going to end well? At some point a strategic investor is going to look at this situation (and knowing that it is no more sustainable in Indonesia or Lebanon than it was in Ireland, Iceland or America…is going to really scratch his head and ask a few hard questions. Indeed, what investment is safe if all the globes housing (including China, the Mother of all property bubbles) are bursting. What do you do to protect wealth, your health, your family and your safety in such a situation?

    Seriously. Are you ready? The Crows are coming home to roost.

    Farmer

    • Farmer -> Thanks for the post and all the links.
      Are we running out of land and overcome with immigrants everywhere?
      😉
      Is there any doubt that this is all caused by too much ready money?

      (FYI the post automatically held in mod queue because >4 links; released from mod the moment your ed. saw it.)

      • Thanks Vreaa, I do believe what we are seeing is the outcome of the greatest reinflation effort in history. It is failing right before our eyes. I don’t think it will make anyone in Vancouver feel any better knowing they are not alone in the way these forces have distorted pricing but it might be helpful in choosing a different direction where investing is concerned. We are collectively going off a cliff as it stands and I do not know if anything can be done to stop what is now in the process of unfolding. It seems safe to say that the coming crash will be worldwide. Vancouver will play its part as we soon discover who has real wealth and who was swimming naked all along.

    • It occurs to us that it’d be a wonderful project (sociological/psychological/economic thesis?) to take a look at each and every one of the bubbles and collate the different stories that locals have told themselves to justify their own run-ups in prices.
      Real reason: Globally available free money
      Local explanation: x, y, z

    • Joe_Blown_Away_By_High_Housing_Costs

      Farmer said: “It looks like a South Seas moment to me. Just a lot worse. Nobody will be spared.

      But this time environmental sustainability is also on the line. ”

      Farmer, I think you are right. Nicole Foss is one of the people who sees this coming. Look her up on youtube. She is brilliant. Listening to her lectures is like candy for my brain.

      Her recommendation to right out the storm: Convert all your assets into cash.

      Although ‘storm’ is not the right word for Foss. Storm implies it will eventually be over. She says things will never be the same. Our current level of socioeconomic complexity is based on cheap energy/oil. We will never have that again.

      • Foss is on the dark side. I sure agree with that. She has expertise in the area of energy though and her insights should be a warning to all of us. Even if her worst case scenarios do not ever play out it seems equally unlikely that we will see the best case outcomes either.

        By the way, does anyone else think it more than just passing interest that the creation of a global bubble in housing is just not considered newsworthy? We don’t get anything on the six-o-clock warning us of the impending dangers despite the fact these things are simultaneous events happening everywhere at once.

        This is a whopper though and it is hardly ironic that they are all playing out in the same fashion with the same cast of deniers, real estate pumpers, banks encouraging easy lending and governments taking little action to prevent them through a direct approach.

        I only put a small fraction of the links up, by the way. It is of grave concern for anyone with any real assets (unlike the unreal assets of “real” estate) that this obvious impending calamity of a price correction does not sweep away their wealth along with everything else.

        This is truly a time to use your head in seeking to shelter against the coming storm.

    • I’m ‘long’ HotDogs. Their track record in challenging GlobalMacro environments is peerless…

      http://tinyurl.com/d5n4huq

      • Great picture Nem. Notice the small children? In times gone by (before daycare was invented) it was still normal to take your kids to work every day. You still see it in the Third World. Nobody even bats an eye. The modern disconnection between parents and children is the source of our family breakdown in my opinion. The great drive for efficiencies in the workplace has meant normal socialization has been sacrifced in favour of economic output.

      • gd idea sir_nem … was long food generically but specifically may be better … corollary, farmer -> a lot more household need 2 incomes to do the same as 1 used to, say, only 30 yrs ago … living stds have gone down … despite technology … begs the question, who’s sucking on everyone’s pipe?

      • found it …

  11. reality check

    I think people are putting their money into hard assets as they have been severely burned in the markets. the markets are going absolutely nowhere and people are looking for somewhere to put their money and real estate is the winner.

    • ” real estate is the winner.” until it isn’t. Just ask the millions of US folks that got foreclosed what they think about your theory…

    • It is a misnomer to call real estate a “hard asset”……. especially under the current circumstances. Iron Ore is a hard asset. Lumber, wheat, copper, gold, farmland and even antique cars are hard assets for which there is usually constant demand and low ongoing ownership costs other than storage. Coin collections, antiques and Jewellry might also be considered hard assets.

      Housing almost always represents debts and liabilities though. Even fully paid off homes will drift into worthlessness in as little as one years time if the roof fails, basement floods or pests infest the premises.

      Property is good…..but housing as an investment class is folly unless it is used to generate revenues and rents. Waste of time and money otherwise.

    • Agree with Farmer: all hard assets are not equal at this point.
      RE is a good ‘hard asset’ store of wealth when valuations are typical/undervalued and cap rate (income stream) is good; but when RE is severely overvalued (Vancouver circa 2012), and when almost all potential owners are ‘in’, it won’t necessarily act like a hard asset at all.
      Compare with other ‘hard assets’ that can be argued to be undervalued and where the population have barely participated.
      So, yeah, we can’t lump all apparent ‘hard assets’ together at this point.

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