As summer came to an end and the fall real estate season was set to begin, there was optimism in some quarters that the fall market would resuscitate sales after 5 months of dismal results.
The silver lining among all the negativity had been housing prices themselves.
Monthly sales had tanked but the real estate industry hyped that Metro Vancouver prices remain high as home sales slow.
Everyone's favourite industry defender, Tsur Somerville, was trotted out to declare prices would not come down! A theme he has publicly espoused several times during the summer:
Tsur Somerville, who holds a real estate foundation professorship at the University of B.C., expects prices to stay flat for a while “because our prices are high relative to what people think they should be,” Somerville said. “Our price adjustment will come from prices being flat for awhile and letting income catch up to where prices are.”
If fact it was just after this that Somerville came out and tried to halt all concerns and worries about a possible collapsing of prices by infamously declaring you can't burst a bubble that isn't there.
If there was a large number of unsold units coming onto the market or a huge change in the economic environment, Somerville said, “that would really cause prices to tank.”
“Most people don’t have to sell their house,” he said. “You bought it for $200,000. The price is now $150,000. Unless you have to, why would you sell it?”
For prices to go down significantly, contended Somerville, “You need people who have to sell, either because the economy has collapsed and they don’t have any income or developers have built a whole bunch of units that are unsold and the bank is screaming at them or foreclosing or something like that.”
None of those conditions appears imminent.
Somerville said it would take “some negative shock,” such as an economic meltdown or mortgage interest rates jumping from four per cent to nine or 10 per cent, to trigger lower prices.
So no lower prices for you!
Kinda reminds you of Seinfeld's soup nazi, doesn't it? Tsur shouting "no lower prices for you!"
Fast forward one month later.
Yesterday we relayed realtor Andrew Hasman's observation that "the media always seem to be somewhat behind what is really happening on the front lines."
And behind they are.
We have shown you that prices in Richmond certainly aren't remaining flat. Houses are selling 25% below assessed value right now in the former HAM hotspot.
As per Hasman, westside Vancouver inventory has ballooned with 12 months of supply for single family houses. This glut of inventory forced the likes of those who owned the house we profiled at 3888 W. 30th Avenue to drop their asking price below assessed value and sell for 12% below assessment.
What was it Somerville said? “Most people don’t have to sell their house. You bought it for $200,000. The price is now $150,000. Unless you have to, why would you sell it?”... to escape a collapsing market, perhaps?
To demonstrate that 3888 W. 30th was just the tip of the iceberg, one faithful reader offered the following five examples of other westside Vancouver properties who have cut their asking prices anywhere from 10% to 23% below market assessed value without any buyers in sight.
Paying attention, Tsur?
(all images can be enlarged by clicking on them)
1998 Cedar Crescent
This house is assessed at $5,203,000.
Current asking price $4,488,000
Already $715,000 or 13.74% below assessed value and still no sale.
1903 Cedar Crescent
This house is assessed at $5,145,000.
Current asking price $3,980,000
Already $1,165,000 or 22.64% below assessed value and still no sale.
2168 West 20th Avenue
This house is assessed at $3,313,000.
Current asking price $2,980,000
Already $333,000 or 10.05% below assessed value and still no sale.
4055 West 41st Avenue
This house is assessed at $1,892,000.
Current asking price $1,498,000
Already $394,000 or 20.82% below assessed value and still no sale.
1966 West 13th Avenue
This house is assessed at $1,902,000.
Current asking price $1,475,000
Already $427,000 or 22.45% below assessed value and still no sale.
With asking prices trending 10% - 23% below assessed value, we may have to ask Somerville to redefine the term 'flat'. I don't think local sellers will agree with his current definition.
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Please read disclaimer at bottom of blog.
Awesome. I hope Somerville earns he moniker of Canada's David Lereah when all this is done.ReplyDelete
Somerville can't possibly believe his own BSReplyDelete
I can't help it, I am so looking forward to the absolute shit panic guys like Tsur will be in next spring. Am I a bad person?ReplyDelete
I especially like the home at 2168 West 20th Avenue that is "archaically designed"ReplyDelete
Just goes to show that RE people not only speak another language, but they can't spell in ours, LOL!Delete
Wow. It should be interesting to see what kind of effect this will have on the market. If buyers (what few there are) look around and see some asking prices down 25% of assessed value, who would even look at a property which is at, or above, assessed value?ReplyDelete
How does he propose incomes will catch up? That would take decades....ReplyDelete
Is he actually that stupid? I mean, really? He can't possibly believe that.
It makes me question if he actually understands economics.
How long before we see the first west side Vancouver home with an asking price a full 25% below assessment?ReplyDelete
Tsur says, “Our price adjustment will come from prices being flat for awhile and letting income catch up to where prices are.”ReplyDelete
I give that a 0% chance of happening in a global economy that is slowing down, currently high unemployment rate in BC, and the fact that wage growth over 30 years relative to inflation is stagnant or falling. The only way income will "catch up" to prices is if prices actually fall. Which has been the whole problem all along, income does not support prices only debt does.
Again the whole media and real estate industry circus show is being discredited. The whole industry are shills and liars that do not have the interests of ethical representation of both buyers and sellers in mind. For sellers they are deluding them with disinformation campaigns.
For buyers they are insulting them with false or spun figures. They are con artists and the public is starting to see the reality of what it is, a gong show of deceit and snake oil salesmen including the banks whose only care is set buyers up with huge debt bombs since only the public or the CMHC are the ones at risk not them.
Nobody in their right mind should buy in this market, especially first-timers. And that is what we see. People on the ground "getting it". Waking up to the fact the whole industry is full of liars and thieves.
"What was it Somerville said?ReplyDelete
“Most people don’t have to sell their house. You bought it for $200,000. The price is now $150,000. Unless you have to, why would you sell it?”... to escape a collapsing market, perhaps?"
Condo's in a building we own in are currently selling 15% below what they were bought for and 10% of the building is for sale.
And wages catching up? Are you kidding me? What F'ing planet does this guy live on?
Thanks again Whisperer,ReplyDelete
delusionary insanity by a corrupt r/e system where truth sits in the backseat, gagged and handcuffed.
reminds me of a quote:
“Men occasionally stumble over the truth, but most of them pick themselves up and hurry off as if nothing ever happened.”
and a video:
real estate is a dead parrot
take care and keep up the good work
Despite being sued by a realtor, I am still here. http://albertabubbleblg.blogspot.ca/ReplyDelete
Really? I would like to hear more about that, squidly77Delete
what do you want to know Whisperer ? I will tell you all.ReplyDelete
Email me and tell me the details, if you don't mind.Delete
This comment has been removed by the author.ReplyDelete
This comment has been removed by the author.ReplyDelete
I'll check your site for your email tomorrow and we'll chat about it.Delete
I have no problem with you headlining this, none, the REIC are trying to shut down all the blogs, they hit the canadabubble blog and mine, so sad for them as they will have to try again. I refuse to give in !!ReplyDelete
Theres no e-mail on my site, and there never will be. It is what it is.ReplyDelete
I would like more details. If you can send an email to me, please do.ReplyDelete
He tried to be a super hero.ReplyDelete
It is what it is whisperer.
Interesting. What statements does he claim are defamatory?ReplyDelete