Sherry Cooper, BMO – “There is already about a 15% to 20% correction in Vancouver, thanks to the overbuilding during the Olympics. And that’s still manageable, given that much of it is at the very high end of the market.”

Interviewer: “What is the possible worst case scenario that the Canadian consumer would look at from a housing deflation?”

Sherry Cooper (BMO Chief Economist): “Well, it wouldn’t be in general everywhere; that’s because we haven’t seen a pumped up situation, in most of the cities of Canada, with the exceptions, possibly, of Vancouver and Toronto. There is already about a 15% to 20% correction in Vancouver, thanks to the overbuilding during the Olympics. And there, uhmm, that’s still manageable, given that much of it is at the very high end of the market.”

– from BNN Market Sense, 16 July 2012, Part Five: Canadian June Home Sales.

38 responses to “Sherry Cooper, BMO – “There is already about a 15% to 20% correction in Vancouver, thanks to the overbuilding during the Olympics. And that’s still manageable, given that much of it is at the very high end of the market.”

  1. Hmmm, which is tighter?

    A) The Vancouver housing market

    B) The skin behind Sherry Cooper’s head

    Thoughts?

  2. Village Whisperer

    15-20% correction already?

    Ready. But, but… that’s not what the HPI says?

    But,but… that’s not what Tsur Somerville says?

    Sheri… are you implying that the HPI and Sauder are full of sh*t?

  3. Classic “it’s only a flesh wound”.

  4. It’s funny how Sherry now admits doom and gloom after she sells her mansion. She is right about the property type that is in decline. The high end is going to be affected as prices were skewed much higher and at a faster rate. Because the luxury market is very narrow, there will be very few buyers to pick the market back up. For sfh under 1 million, we will see sticky conditions for a little while. And over in the condo market, we will likely see delayed projects and prices reduced on remaining units. We might see some more projects set on fire.

  5. bull crap,the housing market is exceeding all expectations near where I live. (surrey). Neighbour put house on market 890,000 but was advised to list for 865,000. Sold in 5 days. Its all bolloc$$$$ that there is or will be a correction

    • OK. Your prediction noted.

    • Good timing by the seller !!

    • On the other hand…good friend trying to sell her house off Commercial Drive, 2 price reductions, nothing after 4 months, just pulled off market “until things improve”.

    • These pretzels are making me thirsty.

      Jazz

      I smell BS. Are you a REALTOR? Care to provide more details?

      I know Surrey market (I am not in RE business but have lot of family and friends in Surrey). Market really stagnated in the last 3 months and it is also because of the new rules that people are simply not qualifying for the over the top prices that seller want. Whatever is selling is selling at or 5-10 percent below assessment value. Most people have simply taken their listings off the market out of frustration.
      If what you are saying is true then it may be one off instance of an ignorant and naive buyer

    • See the abundance of price reductions at this site:

      http://www.livefraservalley.ca/

      For example, I see about 20% of the downtown listings have had price reductions. Note they don’t include listings which have new MLS #.

    • “Sold in 5 days” for how much?

  6. We’re down about 13% from the Feb. high this year (based on REBGV average prices), and it sure doesn’t feel anything like 2008’s drop. To attribute the drop to Olympic overbuilding is pretty simplistic as well. I think that we’re in a new market compared to what we’ve witnessed over the last 10 years, but it’s not a falling one. I think we’re going to see movement within a 15%-20% trading band for the near future. When I track average daily price that’s what I get (if you take out the extreme highs and lows). We’ve been pretty stable all year, so far.

    VREAA – time to get off WordPress.com and go to wordpress.org. WP.com=Big Brother

  7. What a strange comment. YVR is off due to “olympic overbuilding” but it’s mainly “high end”. Was there ANY olympic-related building of high end homes?! Condos I can see but hig end homes? I’d guess there was zero ‘olympic effect’ in that market.

  8. “much of it is at the very high end of the market”

    I don’t get it.

    • Like all economists, Sherry speaks parseltongue. A forked tongue makes the stupidest thing sound like the truth.

  9. Sherry Cooper is like the Joan Rivers of Canadian bank economists…

    They’re both American. And you want to see them both once in a while because they are mildly entertaining. And the older they get, the more plastic they get done and the younger they try to look.

    And they should both retire.

  10. Canadian home prices to tumble 25% in long-term: Capital Economics report
    The Canadian PressBy Melinda Maldonado, The Canadian Press | The Canadian Press – Wed, 25 Jul, 2012

    TORONTO – If the Canadian real estate market continues to cool, house prices could see substantial declines next year and could fall by as much as 25 per cent over the long term, according to an economics report released Wednesday.
    Though some economists have suggested that a tepid slowdown so far in the market suggests it is headed for a “soft landing,” Capital Economics economist David Madani said he continues to believe that a more drastic drop is on its way.
    “We think a housing correction over the longer-term is inevitable and still stand by our earlier view of house prices declining by 25 per cent,” he said in the report.
    Canada’s real estate market is showing signs of cooling off following a post-recession boom sparked by a move to ultra-low interest rates. Both national home sales and the average home price were down year-over-year last month, indicators that the national market could be slowing.

    [very lengthy post that pasted entire article and comment thread edited down to above. -ed.]

    • Copy/paste abuse! And it’s already been around.
      Some things are best done sober.

      VREAA: Check out “Wharf Place” condo project in Sechelt.
      24 units, 22 for sale on MLS, seemed stalled last time I was there. It was on a Saturday, but it had the ghost town feel to it.

  11. High end properties in west vancouver over 3 million are still moving pretty good. They are definitely taking longer though. And the 10+ million dollar market is completely dead.

  12. CanuckDownUnder

  13. delirium tremens

    Give us a warning next time you post a picture of Sherry Cooper! Her face frightened me that my heart skipped 2 beats.

  14. VREAA:
    Wordpress.com drives me nuts because if I want to comment on a wp.com blog and I use my regular email it requires that I login to wp.com with my wp.com username (I have no clue what the hell it was) or my facebook account or my google account, etc. etc. But, it doesn’t ask you to do that until you’ve crafted an absolute work of art comment, which you end up losing, after which cursing ensues, etc. etc.

    Anyway, for your blog I’ve created a completely untraceable email address. Big Brother will never find me now.

    I heard a good story today that you’d like. Young guy buys a house in Richmond last fall in the $700k range. Pays cash with parents money (from China). Thinks about putting a mortgage on it but drags his feet. Ends up selling in February for $850k. (You’ll recall that was our recent peak). Very lucky timing – he’d done nothing to the place. Now, if the next buyer tried to sell he’d probably be back around the mid-700s.

    However, with rates so low and a decent economy here, why do many sellers have to drop prices substantially? We could well see less motivated sellers leading to less inventory, combined with buyers who are already paying arms and legs and firstborns. With the love of real estate in this town that spells plateau to me.

    We’ll see pretty quick. If I’m right we should see inventory growth start to slow (mind you, it’s still on a record pace, beating 2010 and running neck and neck with 2008 – http://www.robchipman.net/inventory-by-month/).

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