BC Realtors Predict ‘Unsexy’ Market – “Over the next year or so we expect price changes to hover around zero”; “Price increases of the last decade are long gone”

Announcer: “There hasn’t been a crash, thankfully, but Ottawa, and the Bank of Canada, are desperate to raise interest rates once the economy improves. Economists are expecting rates to start inching upwards by late 2014, meaning that the price increases of the last decade are long gone.”

Cameron Muir, BC Real Estate Association economist: “We expect the market in Vancouver is going to be unsexy over the next year or so… uh, uh, long term trend sales activity… prices… probably pretty flat, we expect prices to stay.. hover around zero… percent or two on [inaudible] side.. depending on what community or neighbourhood you’re in.”

– from Global News 19th or 20th Dec 2012 [video archived by GreenhornRET; hat-tip El Ninja]

Next year will likely see the first very clear declaration of substantial price weakness in Vancouver RE.
Yes, we’ve already seen some price drops, but the numbers are not very remarkable (1%, 4%, 7%), and have been easily hidden in reporting. They certainly haven’t yet pervaded group consciousness.
Realtor association predictions tend to (1) extrapolate recent activity and (2) err on the side of optimism. These calls for a flat market are precisely that, and we are close to certain that they will be proven wrong.
It is noteworthy that even Global sees enough evidence to state plainly “the price increases of the last decade are long gone”.

I’d submit that the use of the word ‘unsexy’ is likely an unconscious attempt at delivering a sobering idea in a playful fashion, in the hope that it makes it somehow more palatable.

As an aside, consider these reports from the perspective of our recently discussed (mythical) ‘Discretionary Seller’. If you had already decided that you’d like to sell, and either had your property on the market, or had taken it off awaiting a strong spring, how would you feel about these predictions? What would you tend to want to now do? Those who reply: “Put another log on the fire and wait for a strong market (in 2014? 2015?)”, back of the class.

– vreaa

48 responses to “BC Realtors Predict ‘Unsexy’ Market – “Over the next year or so we expect price changes to hover around zero”; “Price increases of the last decade are long gone”

  1. As you say vreaa, “unsexy” strikes just the right note. Not too upbeat, and hence unbelievable, but not too negative either. Muir’s hope, I’m sure, is that people will say, “hey, investing isn’t supposed to be ‘sexy’ anyway, so it’s all good.” You have to give these marketers — er, economists — points for creativity.

  2. I love how a 1 or 2 percent drop is seen as insignificant. No consideration whatsoever of how many people are already stretched to their absolute limit and bought in against their better judgement only because “it can only go up.”

    • Yes. Thinking about this report allows one to get a hint of how market sentiment can turn from “only goes up” to “we’re on a toboggan heading for a crevasse, I’m bailing”.

  3. You know there’s a bubble when the commentators relate the market to sex.

  4. vreaa, perhaps there’s an additional category you could consider for anecdotes — something like “Spokesperson Spin”, or “Bubble Euphemisms”. The linguistic contortions we’ve been subject to over the months and years have been quite something. And after all, language is the primary tool that the RE industry, the banks, etc, have been using to promote their version of things. “Unsexy” and Doug Porter’s “bumpier” are obvious euphemisms. Referring to Yaletown as a “borough” is obvious spin. Regarding your question of how a ‘Discretionary Seller’ might or should feel about these types of pronouncements in the MSM, I’d say the greater the linguistic dissembling, the greater the urgency to believe the exact opposite and act accordingly.

    • Froogle ->
      Good suggestion, I’ll set something like that up, nice idea.
      To take this kind of analysis a step further (at the risk of getting a bit complicated), consider the very brief statement by Muir again. He seems far more uncomfortable than he normally does, and he trips over the delivery of what is likely a fairly carefully prepared statement.
      To parse that one sentence further:
      1. umming and ahhing – “uh, uh”
      2. doesn’t clearly articulate that he means that both sales activity and prices will be flat.
      3. refers to ‘prices’ when he means ‘price changes’
      4. fumbles around whether to use ‘stay’ or ‘hover’
      5. swallows one word/phrase completely.
      Obviously we can’t hold anybody to as high standards in spoken versus written word, but even given that, this is an unusually ineloquent statement.
      Thus, in addition to the ‘linguistic dissembling’ that you note, there is much in this delivery to cause anxiety in the ‘Discretionary Seller’.

    • Great idea, Froogle. It’s a fascinating study in language. I think collectively we could compile quite a list.

    • bubblespeak

  5. What was this guys prediction 10 months ago?

  6. What happened? Did Cameron get visited by the R/E ghost of past, present and future to be making this call?

    Seems like his tone has changes from the usual buy now blah, blah, market balanced blah, blah

  7. I’m now packing…
    Two shops and a residence…
    Taking a Deep Breath… we will see what comes…
    And who’s right…
    But out of Greater Vancouver …
    This will not end well…
    Whats the Chinese maxim…
    Unless you change your direction… you will end up where you are going…
    I for one have changed direction…

  8. Right on cue, the MSM in damage control. No crash coming. Crisis averted. Phew…

    BTW, I’d say this chatter about SOFT landings and BOTTOMS is not “unsexy” at all.

    Fast forward a couple on months. Global reports, “record sales volumes”, “the bottom is in”, “Buy now or be priced out forever”.

    Fast forward about 9-12 months. Global News now sponsored by the Credit Counselling Society of BC. “Homes” section of Vanc Sun replaced by “Managing Your Money”. Homes+Announcements+Classified to be consolidated into a single half page below the movie listings.

  9. Cameron Muir is an idiot. Really? Prices flat? Prices are already dropping; 10-30% off assessed in Van West and Richmond. He also made a comment about how last year’s prices were pumped up by luxury sales, then goes on to say how the HPI is skewed because of that. HELLLO????? I thought the HPI adjusts for all these luxury sales? Or does it only adjust when it’s favorable to realtors? Quite pathetic. I fail to see where the money is coming from to sustain these prices. Where are the buyers coming from when so many are already stretched so thin and those who want to unload their multiple homes and condos can’t do so. Rich immigrants have moved on from Vancouver. I keep repeating this but where I live in Van West, there are houses sitting on the market forever. Just drive on 49th ave west of Cambie. Lots of new builds, monster houses, sitting on the market for the past year. Vancouver will soon be like Phoenix.

  10. Describing the future RE market as ‘unsexy’ couldn’t be more appropriate. The ‘orgy’ of credit has since climaxed and the hookers have taken their money and run. Nothing left except for masturbation from the media.

  11. In keeping with the sexualization of RE, a new term to describe people terrified of buying only to see themselves get trapped deep underwater:
    I suspect this will be worthy of an anecdote category in the near future.

  12. Vancouver will be like Phoenix? That is a stretch. Despite the bubble heights Vancouver is still a very desirable place to live and work.There will always be demand and I suspect that any sharp reversal in pricing will be met with buyers interested in owning there. The city still gets a top ranking for liveability compared to other cities around the world. It is generally clean, healthy, accessible, coastal and warm compared to other Canadian cities. I am sticking with my 40 to 45% decline estimates because I think a floor will form on pricing at those levels. Exceptions aside Vancouver can still be a great place to live and raise a family.I will be here to eat my words if prices actually go below 50% on average across the Lower Mainland.

  13. Love it, you can tell this guy was sweating bullets in the interview. Probably on his way to close a sale on his own house or a flip, like a rat swimming from a shipwreck.

    • Who can blame the guy for being a little nervous. He reads these sites too and knows that some of his more memorable lines have been immortalized. They are criticized, shredded and analyzed by complete strangers. Hell, his Mother probably reads Vreaa to see what folks are saying about her boy. That can be stressful. He is walking on eggshells. Its that whole credibility thing you know.

  14. “unsexy”

    What does that even mean. Hooboy if people are investing based on “sexiness” I think we have all the information we need.

    • Great point.
      Yes, they were ‘investing’ (buying, at least) based on ‘sexiness’, weren’t they?

    • SexyInvesting!??? Everything you need to know… right here, DearReaders…

      [NoteToEd: A Confession… last time I was in Juneau… I won the “Pig ‘O The Port Award” for ‘conduct unbecoming’. An altogether too predictable ending to a day WellSpent in the RedDogSaloon. Memorable though.]

  15. Wasn’t there an ad in Vancouver newspapers with a narrative that went something like this: ‘A car will get her interested, a home will make her stay’.

  16. My anecdote: Metrotown is absolutely dead this year. I started asking clerks as I made my shopping rounds, and got nothing but confirmations. “It doesn’t feel like Christmas” and “It doesn’t feel normal for this time of year” were typical of the sentiment.

    What is everyone else seeing out there? Is Vancouver’s 2012 holiday retail season a complete bust, or is it just Metrotown that’s seeing a small fraction of normal traffic?

    • I bought as much as I could online to avoid the mall, but still spent a few hundreds at best buy, sport mart, etc …)

    • 4SlicesofCheese

      Really? I was there yesterday, still felt like a zoo. Food court is a disaster.
      Although it did feel slower than last year. I think people are just shopping online more these days.
      Plus no one shops for gifts anymore, people are just buying stuff for themselves. Expect super busy malls after xmas when the real sales start.

  17. Vancouver RE in popular culture:
    ‘Very Vancouver Christmas’ finale with Dan Mangan

    starting at 1:08
    The mountains and the beaches,
    How they make children sing,
    And all they want for Christmas
    Is affordable housing.

  18. Cameron Muir: dumb + dishonest = not hot.

    • Well, that wasn’t too civil was it? Sorry! Withdrawn!

      • Too late….his lawyer is on speed dial.

      • What I meant was that we need to exercise some restraint in directing slurs at those we disagree with. Muir is no fool to have reached the top. It is expected that he will be endorsing his position and group with as much energy as the bear camp is offering in opposition.

  19. Self-fulfilling prophecy. If Cam Muir says market is going to be flat, what’s the incentive to rush out and buy?
    That will cause the market to be extremely so as there will be a lack of new entrants (FTB) into the market. Guaranteed price drop in 2013. I predict 5%.

  20. Off topic but I was just reading a post at ZeroHedge that gives insights into the devastation wrought by the bursting of the credit and housing bubbles there. The numbers are so astonishing it makes your head spin. No time to verify the accuracy of any of the stats but it is worth looking at anyway.

    Two of the 75 points jumped out at me:

    “#21 Approximately 57 percent of all children in the United States are living in homes that are either considered to be either “low income” or impoverished.

    #22 According to one survey, 77 percent of all Americans are now living paycheck to paycheck at least part of the time.

    Come to your own conclusions but it seems clear that my remarks in the past regardng a falling birthrate being linked to excessive real estate prices were not far off the mark. The outcome is that those households who did have children have fallen on very hard times as the economy contracted. Children are expensive but they don’t come close to the cost of home ownership in some places. The situation of most Americans living paycheck to paycheck is equally astonishing. There are little in the way of savings to muster after the steep economic losses of households on the tail end of the housing collapse. We are seeing the same thing here in Canada already and this is stilll while times are good.

    Link: Zero Hedge: 75 Crazy Economic Numbers from 2012

  21. Real Estate Tsunami

    Scary how Muir looks like a younger Pasternak.

    • Oh dear, I hate thinking of them in the same breath.

      I was thinking Muir looked like Mephistopheles, but after lecturing the blog on not commenting on people’s looks, I thought I shouldn’t say anything.
      Which I just have.

  22. Pingback: Linguistic Contortions From The Vancouver RE Bubble – “Unsexy” Markets and Other Dissemblage | Vancouver Real Estate Anecdote Archive

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