“I live in Hastings-Sunrise and pay a lot of attention to what things are listed and sell for; at the moment things seem to be moving for prices that are similar to last summer.”

“I live in Hastings-Sunrise and pay a lot of attention to what things are listed and sell for…. and things are listing and selling for about what they were last year. People trying to get over a million for their places? They are out of luck – but there is a limited amount of stuff in that neighbourhood, and it’s selling for between $700,000 and $900,000, generally close to list prices. Even tear-downs on tiny lots are selling for $650,000. I’m not saying that’s going to continue, but at the moment things seem to be moving and for prices that are similar to last summer.”
Megan Eliza at VREAA 15 Jun 2012 10:15am

Our observations are similar to Megan’s. Although sales are down and inventory up in most areas, and despite the fact that there are many examples of prices reduced from original ask, we have not yet witnessed a very definite step down in same property sale/resale (“time1 to time2”) prices. In other words, a property that sold in 2011 or 2010 (or before) for ‘x’, now selling/sold for ‘x-10%’ or ‘x-15%’, etc.
Such reports will be unequivocal evidence that the descent is underway, and we fully expect these stories to be heard in the near future.
– vreaa

58 responses to ““I live in Hastings-Sunrise and pay a lot of attention to what things are listed and sell for; at the moment things seem to be moving for prices that are similar to last summer.”

    • 🙂 I know one realtor that did House Hunters International. He did not say anything about scripted, just “difficult” and a “handful” etc. I guess that’s just another example of realtorspeak.

    • Its completely fake. You have to be in escrow on a house to even be considered for the show..

    • On this note, whatever happened to “KVOS’s Real Estate 101 TV, running each Sunday, featuring everything about real-estate-savvy Vancouver.”
      [headlined at VREAA 23 May 2011]

      • Thanks for keeping this thread alive, we can all learn so much from your narrow-minded perspective.
        Oliver Wendell Holmes, Sr. described bigotry in the following quotation: “The mind of a bigot is like the pupil of the eye; the more light you pour upon it, the more it will contract.”

      • bailinginbc

        Interesting Allen that you consider your prospective to be pouring light on the subject and yet you never make any points pertaining to the argument at hand.

    • From that article:

      “The average home price is forecast to jump by 2.2 per cent by the end of 2012, a stark contrast to earlier expectations that it would fall 1.1 per cent.”

      Where the f*** do they get these “expectations?” This is not a rhetorical question, and “dart board” is not an acceptable answer. 🙂 Seriously, does anyone know how the CREA arrives at these “forecasts?”

      I mean, is there any reason other than pure BS in the face of a correction that a seemingly nonsensical 1.1% drop suddenly turns into an even more nonsensical 2.2% rise?

      • “Where the f*** do they get these “expectations?”
        same place this blogger forecasted 66% drop.

      • Actually, in a market that has run up between 100% and 200% over seven to ten years, a call of 1.1% down or 2.2% up over the next 6 months isn’t a call at all. Anybody who knows markets knows that this kind of prognosticating is, as Gord says, pure BS; it’s drivel. They are, as always, simply using the immediate rear-view mirror, and extrapolating out a few months. Besides, one or two percent here or there is noise. The report contains commentary, not analysis, and it is completely worthless to any market participant.

        A call for a fall in housing prices of 50%-66% sometime this decade, on the other hand… that’s prediction. If your own analysis led you to agree with such a prediction, it may affect your approach to the market.

      • Ralph Cramdown

        “Jump by 2.2%?” I think that’s called inflation in line with the CPI.

        VREAA’s right, though. Piddling around with price changes of +/-2%/year is not making much of a call at all. They must have SOME sort of model, though, otherwise they’d never predict negative price changes, unless it’s just to try to get Carney back in from the ledge.

      • And besides, it is not even news. All of what is being reported is pure drivel because it is idle speculation backed by nothing but thin air. They do not know what real prices will be nor how an overseas crisis might upend the model altogether.

        Yesterday I heard CBC Radio blithering on about a Credit Suisse report speculating that brent oil could fall below 50 dollars if the Euro crisis persists. Perhaps the story was “newsworthy” because someone actually issued a report but it was pure hogwash and a waste of airtime. Can they really be so hard up for stories to tell that they are digging into science fiction now? Reminded me of when Goldman predicted oil was going to see 200 dollars in 2011. Equally ludicrous.

        And not newsworthy.

      • “…a call of 1.1% down or 2.2% up over the next 6 months isn’t a call at all.”

        it isn’t your call. But even a call of 30% up is probably more accurate than your prediction vreaa. I will grant you the Price is Right showcase showdown win though; closer to the actual value without going over – perhaps I should just guess $1

      • f1 -> I think you know that my call isn’t a call “over the next six months”.

      • “I think you know that my call isn’t a call “over the next six months”.

        that’s an easy out vreaa…a prediction that is always a ways off in the future, hence, the present never arrives.

      • f1 -> My central prediction hasn’t changed:
        ‘Prediction For The Coming Decade: A Real Estate Bear Market Will Be Vancouver’s Defining Social And Economic Event.’
        http://tinyurl.com/prediction2010-2019

  1. That’s my impression in Marpole, too. What seems to have happened is an overall leveling. Before properties were jumping in price by every time they turned over, the reference for me being a place on 66th that sold for a million in 2009 and last sold for 2 million last year. HUGE jumps in price at each sale. Now, things appear to be selling for about the same as last year.

    • The stall is shocking enough.
      In a speculative mania, it’s a death knell.

      • Oh yeah – and what’s interesting to me is that some people in the ‘hood who listed in April/May seemed to think that we were just going to resume the real estate season with huge jumps over last year. A rather crappy Vancouver Special (built in the 80s) which no updating on Charles Street was originally listed for $1.3 million. Now, we have had one or two million dollar homes in our part of the hood, but they tend to be really done up character places, and are not the norm. Clearly, it looked to me, that the realtors have been out there telling people to list high because prices were going to keep going up. Well, they aren’t. And that house is now sitting at 1.1 million and has been for three months. I expect it will sit there until the price drops down to $800k or less. Definitely the price hikes have stalled out, and it’s only a matter of time before people start dropping their prices just to be able to sell.

      • reality check

        Just because people are trying to ask exorbitant prices for a property and not getting them does not mean a price drop is happening. I can ask 3 mil for my property and i won’t get it and will have to lower it but that is NOT a price drop. Price drops should be based on what has sold and not what someone is asking.

      • reality check -> if you re-read the post and the discussion, you will see that that is precisely what we are saying.

  2. Saw a transaction in Richmond today. Assessed at over $1.0M. Asked somewhere approx $900K – sold at $720 (last asking price was $858 – bold low-ball offer). Old White Boomers taking what they can is what you call it . . . . . Most price reductions bring Richmond below assessed now for sure and almost all transactions selling are much below asking.

    • I was driving around Richmond last weekend. Richmond developers have built some of the least attractive spec homes I have ever seen, possibly worse than Vancouver Specials.

      Though I have to admit, Richmond is nicer than I remember. Its not an area I visit often – no reason to. What I did see was pleasant, plenty of park space and the lack of hills was actually refreshing. I also have to say that Steveston has lots of attractive character type homes and plenty of waterfront to enjoy.

      The bridges and traffic are a definite put off though, Granville street was a parking lot on the way back. From what I understand thats not an uncommon sight.

      • My GF and I semi-regularly bike around Richmond. By around, I mean parking at the south foot of 5 Road, taking trails/roads to the north arm of the Fraser, then riding west to the airport, then south to Steveston along the western dyke, then back to the car along a system of roads and trails that run alongside the south arm of the Fraser. Probably one of the most enjoyable rides we do. The outer edge of Richmond is really nice. Funny – I don’t often see the inside except to occasionally grab sushi.

  3. Just In.

    Moody’s downgrades Nokia rating to junk status http://www.latimes.com/business/la-fi-nokia-moodys-20120616,0,3695260.story

    Also Nokia has announced the closing of its facilities in Ulm in Germany and Burnaby in Canada.

    Is the Burnaby location a large facility with mass employment?

  4. The market on a whole has been flat since 2009. It baffles me when people seem oblivious to this fact…but there are a lot of them out there. So people looking to flip properties after a few years, especially people who got into pre-sales, are having trouble coming to grips with “hey, you aren’t going to make money if you want to sell it right now”. This is leading to an increased inventory (stubborn sellers) and will cause a push down on prices in certain areas.

    Of course, not all markets are soft. If you have an East Side or Dunbar home, a gastown loft or a place in Dunbar, chances are you are still going to see growth. If you have a quality property (downtown boutique, sweet view, whatever), your property will still sell easy.

    The hastings-sunrise point is pretty accurate. The 1000sf tear downs are in the 700k range and anything less than that has permit/grow up issues. This is an attractive area for new home buyers, as is Main, commercial and practically anything heritage.

    I don’t see any big surprises for the market in the near future. Bloggers have been proclaiming a bubble & dooooom!!1 since as far back as I can remember (1999) and…well, we are still good 🙂

    • I heard that exact same sentiment in Vegas circa 2005. And the Okanagan not many years after. I owned land (very little land) in both areas during their respective run-ups, so when I say I “heard” it, I heard it firsthand, over and over again.

    • One major factor optimists exclude is the negative multiplier effect. When new homes stop being built or sales slow down, business sales, jobs and other third-party industries are effected, causing more job cuts and less pay raises to boost growth. It is this negative feedback loop that makes slow growth very hard to recover from.

      Just think how many multipliers there are in one home sales: the city, re agent, broker/bank, lawyer, construction worker, sign guy, etc. These people are all effected when sales slow.

      To continue growth and sustain Van’s prices, not only will more fundamental demand be needed, but speculation would have to be increased too!

      This isn’t no recessionary blip. Tough times are coming.

      • I don’t recall calling anything about a “recessionary blip”. It’s a flat market and has been since 2009. HST and its impending death has had a stronger effect on new home sales and that goes away in 2013.

        Prices haven’t adjusted downward (I happen to think they will over the next 2 years, slightly, on a whole) and sales are not especially off, considering the current climate (HST, ify rebate, consumer confidence, Euro/China, etc). If you want solid MLS data, then as an example, here are detached sales for East/West Vancouver (jan 1 – apr 30):

        2008 – 1076
        2009 – 1041
        2010 – 1302
        2011 – 1611
        2012 – 1095

        I mean, are these really the stats that will have the doooom!!1 blog brigade throwing their arms in the air again? Seriously…? I’m not trying to be an ass here but beyond people needing to come to grips with the reality that you can’t just flip any old property 2 years later for a profit, I really don’t see much changing for Vancouver real estate.

        On a long enough timeline, I guess everyone gets it right. Maybe in ten more years? 🙂

      • Agree with that Watchdog. I do not believe it will be possible to avoid recession under the circumstances. Softening sales initially lead to a slowdown in a multitude of other areas and some retrenchment in the sentiment of people. It flows to much more than just housing related occupations as we all know. The outcome shows up as poorer retail sales and declining consumption. The aspect of credit tightening itself is scary enough without all the other headwinds that combine with lost jobs, falling confidence and rising savings rates. But where could we get the boost to keep the economy alive? Stimulants to small business creation and easier lending for entrepreneurs is a good bet. But it will take much more…..

      • I just don’t think the Vancouver market can be looked at in isolation anymore. Not that it is not bad enough on its own already. If you did not notice already we are looking at a global slowdown due to debt restructuring and Vancouver is but one component in the bigger picture.

        How can we possibly be special under those circumstances?

      • @Pulp

        Q: What’s driven prices and got us out of every recession in the past 40 years? https://p.twimg.com/AqjATPqCQAAc8xl.png:large

        Now what?

      • @Canadian Watchdog

        So what’s your point? We’ve been in a recession since 2001? Well, at least we’ve managed fairly well then 🙂

      • @Pulp

        It’s not a matter of how we’ve managed through it, rather can we sustain it, and if you understand the dynamics of a bell curve, you would agree that our debt is unsustainable. http://postimage.org/image/j49o88hit/

        At the same time, you have governments going on a spending binge who have now racked up a whopping $625 billion in debt, and climbing. http://postimage.org/image/yab4ld599/

        Now what do you suppose will happen if/when interest rates go up? The reason I say IF, is because I’ve been reading many hedge/pension fund reports that believe rates may NEVER go up. I’m starting to believe it.

        Fiat currencies have destroyed every empire of our time because man is proven to be weak under the control of monetary power. Central banks of the world know what needs to be done, but they don’t have the will power to do it.

      • @Canadian Watchdog

        I dunno what will happen with interest rates and whatever does happen, I’m assuming it’s not going to suddenly drop to 1980’s levels instantaneously.

        If you want to get me to agree people out there should really watch their debt levels, I won’t disagree. But as far as local real estate is concerned, I don’t see any factors effecting cost other than supply (and I should not sales/new listings remain balanced). In my experience, most owners aren’t overloading personal debt to flip/profit. And for those that do, unless you are a builder, chances are that train left the station in 2009, so expect a loss.

      • 4SlicesofCheese

        “I don’t see any factors effecting cost other than supply”
        Therein lies your problem.

      • @Pulp

        by definition:

        spec·u·la·tor: a person who makes advance purchases of tickets, as to games or theatrical performances, that are likely to be in demand, for resale later at a higher price.

        Theoretically, anyone who purchases a home with the intention of rising prices is considered a speculator. What makes new speculators different from old speculators, is that those who purchased 5, 10 or 20 years ago have benefited from more buyers entering the market, of which many new buyers also purchased a property on the basis that it is a good investment and prices will keep rising (a speculator).

        Q1: If you surveyed homeowners asking why they purchased a home, how many would say i) it’s a good safe investment or ii) it’s a place to live.

        That answer is clear.

        Q2: If you surveyed homeowners asking if they would purchase a home today knowing prices would go down 20% some time in the next two years, what would be the most likely answer? No or they’d wait.

        Of course, this is a hypothetical question as nobody would know if prices will decline by such an amount in a certain time period. However the point is that people buy with an assumption that prices will never decline by a large amount and, because it’s been so long since home prices have declined, there isn’t much recollection on such an event, at least for younger buyers.

        But remember…when the market turns, Q2 comes in play.

      • @Canadian Watchdog

        Why are you breaking out the dictionary? It comes across as pedantic and annoying, please don’t.

        Flip is a pretty specific term, I wasn’t overly vague with my language. At no point did I ever claim home ownership wasn’t an (sound) investment. For a number of years, people could count on a measurable return on practically ANY home purchase within a short period of time. Pre-sales and assignments remained profitable in downtown Vancouver all the way up until at least 2008 (Pomaria is the last no brainer I remember). That’s ultimately an untenable model.

        I happen to think home ownership will always be profitable over the long term. Its a matter of building equity as your investment matures and not buying above your means.

        If we accept that a price reduction is likely over the next year or two (and I’d happily suggest ~5-10%), that still doesn’t mean there are not opportunities to make money over the relative short term. We are painting with a broad brush here. But buyers need to be smart if they go that route or be prepared to hold their investment for longer periods of time. That’s what has changed.

      • Pulp -> The issue is that, although most buyers are not speculators in the ‘flipper’ sense of the word, they have been buying their Vanc homes, at least in part, as financial instruments.
        I have had a post on this brewing for a long time, and I’ll try to pop it up early in the week.

    • 4SlicesofCheese

      @pulp
      Sales are not off considering?
      What would be considered a a real drop off in sales to you?

      • Sales substantially below 2009 might alarm me. As a west/east detached snapshot, 1095 doesn’t. Should it? If so, why?

        Buyers are catching on to the reality of the post 2009 market and becoming more savvy. That alone explains the numbers to me, as well as the 80-95% increase in cancelled/terminated listings over previous years for the same period. /shrug

      • “Buyers are catching on to the reality of the post 2009 market and becoming more savvy”

        I have to be straight with you here, I’m not seeing much of this at all. Prices flat in real terms in the outskirts and for higher-density dwellings doesn’t mean buyers are “savvy”, to me it’s more plausible price-payment ratios have been buoyed by falling carrying costs as owners continue to refinance and roll over into lower interest rate loans.

        2012 will be the last year of the big 5-year negative “renewal gap” (after the precipitous drop of 5 year rates in 2008). Something to consider, when borrowers go into the bank for the next term renewal, there will be less spread on the table going forward. I think for the most part that reduced payment injection has been realised in the past few years; headwinds will now be stronger.

  5. Remember when June was peak selling season? Nothing’s for sure but I’m not seeing much to help sales through the summer. That’s a lot of owners who will have to “review their options”.

  6. Don’t forget some of the $3.9+ million dollar homes in Mackenzie Heights and Dunbar that have seemed to be on the market for a long long time – they also don’t seem to be reducing prices much at all.

  7. Pulp, those are useful numbers. 2008 and 2009 were recession though, how about 06 and 07.

    • MLS data

      2006 – 1413
      2007 – 1381

      A recession does not equal a bubble, nor does it even precisely lead to a decrease in prices. Supply will effect cost and, personally, I think we will see an effect into 2013/2014.

  8. http://www.theprovince.com/homes/Realtors+increasingly+embracing+social+media+stay+ahead+pack/6791510/story.html

    “When Ashley Smith, a 27-year-old realtor in Vancouver, gets a new listing she tweets out the details to her followers and posts the property’s profile on her Facebook page.”

    “From a selling perspective, you are creating a tremendous amount of exposure for your sellers,” she says of the use of social media tools. “There are so many other ways than promoting properties now than just print.”

    comment:
    listings are going underground, Pluto style..

  9. I measured Van’s HPI against different CPIs earlier today. It turns out the real average price (based on GV benchmark) has only increased 24.3% against the headline CPI. https://p.twimg.com/AveBmAnCQAEt7N8.png:large

  10. All the big banks say this puppy is going down over the coming years and they are the ones who profit from mortgages. CHMC say’s up, and they insure the mortgages, also they don’t have enough cash to cover defaults if interest rates rise. Food for thougt

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s