Vancouver RE Makes The Globe and Mail News Quiz – Question #6: “How is Vancouver’s housing market performing?”

Question #6. How is Vancouver’s housing market performing?

a) Declining prices, reduced activity

b) Stable prices, activity off sharply

c) Declining prices, heavy volume

d) Rising prices, thin volume

– from ‘Quiz: Questions from the week’s news’, Globe and Mail, 6 Jul 2012

When we last checked, only 26% of respondents to the G&M quiz got the answer that the G&M was seeking, namely (b). This is almost precisely the result you’d expect from completely random guessing (25%), meaning that one could be led to conclude that respondents know absolutely nothing about the Vancouver RE market. Statistically, they appear to know as much as chimps making random choices. Actually, the poor results are not random, they are due to a ‘little-knowledge-being-a-bad-thing’ effect, as most respondents would probably guess that prices are declining, given all the press. Prices are almost definitely declining, but not yet by enough for ‘official’ numbers to reflect any substantial decline.
Ultimately, the question was a bit more complex than the Globe intended.
We’ll file the event under Category 22 ‘RE References In Popular Culture’.
– vreaa

18 responses to “Vancouver RE Makes The Globe and Mail News Quiz – Question #6: “How is Vancouver’s housing market performing?”

  1. These pretzels are making me thirsty

    The headline is blatant
    http://thelinkpaper.ca/?p=18043

  2. A friend from Toronto is in town, we met up with her at her brother’s house yesterday. They live in a BC box in North Burnaby. I went prepared not to talk real estate because the house is for sale. They are askin $820k, the ad on MLS describes it as a “great starter home”. Which it is, but with the price tag of a mansion. The realtor is my friend’s other brother. So you can see why I kept my mouth shut. Even without my prodding, talk turned to real estate. They are expecting a third child and want to move up to a bigger place. The wife figures they listed two weeks too late (they listed in April). The husband make a comment about his realtor not being able to sell the place. (a good hearted dig at his brother). Then they set about discussing the relative merits of the other houses for sale in the area. Lot size differences, western backyard exposure vs eastern, etc. I realized for the first time why everyone is blind to this bubble, they are obsessed with minutiae. I have never before seen a more accurate manifestation of the rearranging deck chairs on the titanic analogy. These folks believe it will just take time to get their price and they are prepared to live in the current house with another kid for awhile. I hope this doesn’t cause a rift in the family as the coming debacle won’t really be the brother-realtor’s fault. And these guys should have a ton of equity and if all they really want is a bigger place, then selling and re-buying should work out regardless of what point they do it. They are probably too deep in th real estate mythology to do the really smart thing which is to drop their price, sell fast and rent for a few years. But I’ve come to realize, that’s asking just to much from the Vancouver home owner with small children.

    • I have noticed the same phenomenon, Lex and found it quite surprising if not disconcerting. It’s that “cannot see the forest for the trees” thing. Last week I talked to a couple I was acquainted with about the current market hazard. They kept obsessing about their lot size compared to the neighbors, how it had different zoning, why it had value because it was hand-hewn blah, blah…….and I am looking at them chase their tails on a discussion of irrelevance ahd shake my head in wonder. They had just finished telling me they bought the place just 10 years back for 40k and now it could easily fetch 220k and I am thinking that these stunned monkeys really don’t get it at all. They know it went up in price inexplicably but just cannot seem to fathom it falling back to what it was…….the madness of crowds.

      • …..of course, I am sure you can gather that any place selling for 220k can not be in Vancouver and indeed it is not. While prices in the lower mainland shot up to dizzying nasal-clogging highs there has also been a parallel world on the bald flat prairies where an even bigger bubble formed. When we talk about there being a lot of air between current prices and technical support levels in the West Side or Kits then it comes as a shock that some of these small towns make your price appreciation look utterly lazy by comparison. The people I was referring to above have a cabin across the street from a lake in a village with almost no occupations whatsoever. It is in the middle of nowhere and yet it is more than 5 times more expensive now than it was in 2002. The principles are the same here as they are there except I think the correction could well be epic when it finally comes to some of these out of the way places.

        Any fool that cannot understand this is the time to harvest a fat easy crop almost does not deserve the property wealth gift that was sent their way. And yet these ding-dongs are fixated on features which have no bearing whatsoever on why the price went up in the first place.

    • These pretzels are making me thirsty

      All this bravado and false hope about waiting only selling when prices are up again, will probably not last when the prices keep dropping….and dropping and fear sets in.

      It is called denial

    • another great anecdote, Lexlimo. I could make many comments about the sibling connection, and the challenges of this family, and where it is heading, but you see it. Even the painful issue of ‘timing the market’…. although you didn’t offer the info of ‘time in the market’, I can well imagine that the pain will be more intense if ‘time in the market’ (home ownership) has been brief.

  3. RE Trouble in LoLo Land

    In the condo market, sellers can’t even be bothered to clean they are so sure of HAM. On the north shore, we’ve consistently seen unit after unit listed upwards of $30,000 above assessed value with cat hair, dirt, and remnants of renos left on the floor. Realtor busy on cell phone. Crickets. Also, on the North Shore, wonder who they are going to sell to: the best buildings – ie. location – next to parks, quiet street – are age restricted and these all have multiple units for sale; meanwhile, the new builds next to Lonsdale Quay sit empty. A record number of units suddenly for sale in buildings facing where the new lower level road is going in – essentially a new highway above more railway tracks, and more port development – for exporting more coal – has just been approved in the past weeks. Newest development of 800 units slated for the property next to North Shore Auto Mall: next to the site of the new sewage treatment plant at the old railway station, piles of wood chips and sulfur, multiple train tracks, and extensive land requiring remediation for toxic waste after years of industrial use.

  4. Good posts/points from Lex & Farmer. One slight disagreement with Lex: ” I hope this doesn’t cause a rift in the family as the coming debacle won’t really be the brother-realtor’s fault.” Well yes it will be to an important extent. As a professional (something realtors are always on about) he had a fiduciary obligation to understand the RE market and give better advice. His blindness was willful as there has been lots of information out there at least since the US market tumble beginning in 2007. Of course, I agree that the coming debacle won’t be his fault but neither is he an innocent bystander.

    • Well, he is helping them try to sell it; even if they miss the peak by a shade they’re still getting good brotherly advice imho. If they immediately turn around and buy something else without him intervening, that’d be a different story.

  5. Funny update of the day.

    Yesterday or Friday, Jesse posted a link to Don Campbells blog with Dons Global interview.

    Link here: http://www.donrcampbell.com/commentary-on-the-vancouverbc-real-estate-market-video

    I then politely asked Don in the comment section, if his prediction of 12-15% off the top already accounts for the 14% drop in place today. And if not, does his prediction actually total closer to 30%?

    Regardless, it appears to me that the entire posting has now been deleted and the blog only list one new post in July.

    Whats the scoop there?

    • Will headline that interview with transcribed excerpts soon (the clip is still up on Youtube).

    • The closest analogy to rewriting history is an event where people try to make information cease to exist. Do they really think we are such fools that by deleting posts everything will be ok and the criticisms will just go away?

  6. The Don Campbell “interview” was priceless….. I really snorted with laughter when Don said “it’s not about price”…. Uh, an investment isn’t about price? WTF…????

  7. I took that quiz, and I answered A, because in fact they are declining. The official (cooked?) statistics don’t show it yet, but they certainly are.

  8. Pingback: Forests and Trees – “They discussed the relative merits of the other houses for sale in the area. Lot size differences, backyard exposure, etc. I realized that everyone is blind to this bubble because they are obsessed with minutiae.” |

  9. Pingback: Forests and Trees – “They discussed the relative merits of the other houses for sale in the area. Lot size differences, backyard exposure, etc. I realized that everyone is blind to this bubble because they are obsessed with minutiae.” |

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