Inventory Up; Sales Down; Prices Softening – Fate Of Market Still “Uncertain”?

– chart care of b5baxter at VCI, 31 May 2012, who adds “Inventory has reached another milestone. It is at the highest point in the past ten years for this time of year. It has also passed the 2010 peak for the year. Only 2008 peaked higher out of the last ten years.”

– chart care of Larry Yatkowsky at yattermatters, 1 Jun 2012, who adds “Vancouver’s detached average home prices continued a slow retreat from February’s high of $1,235,244 receding to a current average price of $1,073,331 down 12% YOY. Two years of gains are on the block as this market approaches the low not seen since November 2010 when the average was $1,043,161.
…Active listings are at an all time high… up 23% YOY,… with sales down 24% YOY…”.

“Vancouver’s real estate market has taken another interesting turn, with listings up and sales down during what is usually a busy time of year.
In May, average prices for houses have dropped about $150,000 compared to one year ago. That 12-per-cent drop wiped out two years of price increases.
The reason appears to be that too many more sellers are trying to cash in at the same time. Listings are up by 23 per cent, but fewer are buying: sales are down 24 per cent.
“Probably, on average, about a 150 or 160 homes in Vancouver are reducing their price every day in the hope of catching, getting ahead of the train and maybe get out before they can’t,” said realtor Larry Yatkowsy.
Predictions of a bursting real estate bubble have swirled around the Vancouver market for years. Despite the indications, economist Tom Davidoff, of UBC’s Sauder School of Business thinks it’s too early to name it yet.
“It’s going to take several months of data-confirming of what we seem to be seeing before I would be anywhere close to be prepared to say, ‘That’s it, we had a bubble and now it’s bursting,’” Davidoff said.

– from ‘Uncertain fate for Vancouver real estate prices’, CBC News, 2 Jun 2012

The most straightforward way of explaining the evidence at hand (prices compared with fundamental measures such as income, rents or GDP; ownership levels; household debt levels; market price/inventory/sales action; etc.) is that Vancouver has suffered a lengthy speculative mania in housing, and that the bubble is now very likely in the early stages of collapsing.
– vreaa

10 responses to “Inventory Up; Sales Down; Prices Softening – Fate Of Market Still “Uncertain”?

  1. Inventory is higher for every single month this year compared to 2008 if that is any indication of how extreme sentiment has turned. The chart from Larry over at Yatter Matters is incidentally very close to a confirmed double top in my view as the plunge over the last few months is close to breaking the neckline of the 2011 lows. It is not auspicious for Vancouver single family homes nor the market as a whole. Stock markets meanwhile are in flight over in Asia. Expect a bad day here to follow. As I noted in an earlier post, the correction taking place in equities and commodities is pretty much the finger of doom for any slim hopes anyone might have had that Vancouver prices would have one more chance of revival.

    There is not a hope in Hades for a rebound. Not anymore.

  2. Renters Revenge

    The only thing “uncertain” at this point is exactly how deep the dip will go.

    Interesting quote I came across this morning:

    “Booms last longer because optimism is fed by slowly rising emotions involving hope and greed, which, because they are tempered by caution, can reach maximum intensity only over a long period of time and fulfillment only after prolonged effort. Busts are swifter because pessimism is fed by fast-flaming emotions such as fear and anger, which can be realized in a flash of destructive action. -Robert R. Pretcher

  3. Ralph Cramdown

    Oh those greedy sellers! Can’t they take turns instead of all trying to sell at once?

  4. For the Van crew. Just released.

    TD Report: British Columbians least comfortable taking on debt to
    finance life’s firsts


    • Brothels on credit cards are holding up.

    • I should have read that link more carefully. Your “first car” is new and $33,000? Young couples are financing $20,000 weddings? Is anyone without a trust fund doing this? I think TD is on a different planet. At least, I certainly hope they are!

  5. Fate Of Market Still “Uncertain”?

    I liken this RE market to a drunk driver who is eating with one hand and talking on a cell phone with the other hand and steering with his knees.

    Those who are evaluating the data can see what “lies ahead”. No pun intended.

  6. “It’s going to take several months of data-confirming of what we seem to be seeing before I would be anywhere close to be prepared to say, ‘That’s it, we had a bubble and now it’s bursting,’”

    I am sure if there’s somehow a reversal in the data, all it takes is ONE month to confirm the end of the “retreat”.

  7. Pingback: First-time homebuyers will be squeezed by new mortgage rules - Vancouver's Top Classifieds and Automotive Forum -

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