September 2012 Numbers – “Clear reduction in buyer demand; Steep decline in sales activity to 41.6% below the 10-year average.”

So far, so good.

“Vancouver home sales fell 32.5 per cent in September compared with a year ago, says the Real Estate Board of Greater Vancouver.
Sales of residential properties totalled 1,516 for the month, down from 1,649 in August and 2,246 in September 2011, according to the board.
“There’s been a clear reduction in buyer demand in the three months since the federal government eliminated the availability of a 30-year amortization on government-insured mortgages,” board president Eugene Klein said. “This makes homes less affordable for the people of the region.”

– from Vancouver Sun, 2 Oct 2012

“The Real Estate Board of Greater Vancouver maintains that prices remain stable overall in its market. It says its benchmark price index is $606,100, a 0.8% drop from a year ago and a 2.3% decline over the last three months. But there is no mistaking the steep decline in sales activity which in September was 41.6% below the 10-year average.”
– from Financial Post, 2 Oct 2012

“SFH Stats Sept 2012: (ranked by worst sales decline)
Sales:-50% YoY, -10% MoM
Ratio: 22% vs 32%
HPI: -4.2% YoY, -1.3% MoM
Median: -9.8% YoY, -1.4% MoM
Sales -49% YoY, -10% MoM
Ratio: 18% vs 35%
HPI: +4.2% YoY, -0% MoM
Median: -13% YoY, -6.3% MoM
Van East:
Sales:-48% YoY, -6% MoM
Ratio: 30% vs 51%
HPI: +3.2% YoY, -1.1% MoM
Median: -2.5% YoY, -0.6% MoM
Sales:-37% YoY, +16% MoM
Ratio: 30% vs 51%
HPI: +3.6% YoY, -0.2% MoM
Median: +0.4% YoY, -3.7% MoM
Van West:
Sales:-17% YoY, +15% MoM
Ratio: 27% vs 27%
HPI: -6.5% YoY, -1.3% MoM
Median: +1% YoY, +0% MoM”
VMD at VCI 2 Oct 2012 1:17pm

“As an aside, looking at the Average Prices and number of Sales for REBGV, my spreadsheet shows the TOTAL DOLLAR VOLUME for the three housing types has PLUNGED from a high of $3.21 Billion in March 2011 to a low of $1.20 Billion in August 2012. Looks like September 2012 could be even lower.”
lookoutbelow at yattermatters 1 Oct 2012 9:57pm

And in the “Keep Calm and Carry On” (also known as the “It’s Only A Flesh Wound”) category of opinions:
“Clearly my prediction of offshore buyers returning in the fall is coming true. The high average is a reflection of the fact that large amounts of high end housing is selling and selling well.
Like I’ve said all along, this is just a brief pause before the Mainlanders return again. Clearly the high end of the market has not been impacted.”

CBM at yattermatters 1 Oct 2012 9:26pm

Inventory high enough, Sales very weak, Prices modestly down from peak.
Price will follow volume, as it always does.
Further drops ahead.
– vreaa

16 responses to “September 2012 Numbers – “Clear reduction in buyer demand; Steep decline in sales activity to 41.6% below the 10-year average.”

  1. Bad, but I expect October sales to be better than 2008. Even though prices are high, lenders are still writing up mortgages and rates are near all-time lows.

    Expect a more upbeat October report.

    • Month to month is less important now than the bigger picture.
      Are buyers going to step up in adequate numbers to hold prices up? We think not.
      Almost whatever October looks like, it looks to us like we’ve topped. And those who understand that we’ve been in a speculative mania know what that means.

      • Yes, however a more robust October would limit a (local?) minimum in price drops likely to be seen in late winter. Anything is possible but I fully expect some [relative] strength in spring 2013. My sentiment is towards continued weakness in 2013 with some mild strength in the spring, however the wheels coming off is a scenario I have sectioned off on my war board. Just in case.

  2. Thai-born Chinese Canuck

    Are the women in the car Thelma & Louise? 🙂

    • Ralph Cramdown

      Starring Geena Davis and Susan Sarandon as the first time buyers, Brad Pitt as the real estate agent, Timothy Carhart as the aging boomer looking to cash out, and Harvey Keitel as Jim Flaherty.

      What about the lender and the mortgage broker, you ask? Well, it is a Scott Free production.

  3. Carioca Canuck

    I like how they managed to blame the ‘gubmint by the second sentence in their press release. Must be some kind of new spin record.

    • spin the wheel, and chose the best day, so the planetary energy is set. ‘election’ astrology. Gubmints worldwide use this technique often, almost chronic these days. I went into a lot of detail explaining the July9 energy as of the early morning (bank opening hours)… forget which thread

  4. That Hissing Sound, Paul Krugman, NYT, August 8, 2005.

    “This is the way the bubble ends: not with a pop, but with a hiss.”

  5. I disagree with Eugene Klein’s assertion that the shortened amortization period makes homes less affordable. It only makes them less finance-able, but has no direct bearing on the actual affordability as you are still paying the same price in the long run.

    However, the indirect effect is that with less people able to finance homes at their current pricing, the pricing will drop which will make them more affordable in the long run.

    • Yes, this is an excellent point.
      Though rates are very low right now, in real terms it seems like a free lunch for those looking to refinance existing loans.

    • If all that matters is the monthly payment amount, then a longer amortization period keeps the payment lower. We have friends in the U.S.A. that recently received a loan modification. It reduced their monthly payment from $3200 down to $2400. This was achieved by a 2% rate reduction and increasing the amortization to 40 years. I fear this will be the only way for many soon-to-be-underwater Canadians to save their homes, or to lengthen the pain.

  6. Terminalcitygirl

    High prices and low wages make homes unaffordable, not government policy. How stupid do you have to be to believe that?

  7. Eugene Klein + Cameron Miur + Tsur Somerville (a.k.a. Comical Ali of Real Estate)

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