Friday, November 30, 2012

Realtyland - where prices don't fall, they 'flatline'

As November comes to a close, sales continue to lag despite some shrinking of the massive inventory that has built up since the start of the year.

And you can sense the desperation.

If the average home price had increased almost 6% since last year, the headlines would be screaming that prices continue to shoot upward.

But they're not shooting upward.  As the month comes to a close the average price is down 5.7% - so will headlines claim prices are falling?

Of course not.  In Realtyland prices aren't falling at all... they're 'flatlining'. Now 'flatlining' is a most interesting choice of words, don't you think?

But this is the spin as we see in the press today.
Housing market has 'flatlined'
The average home costs about 5.7 per cent less than 2011
Housing market has 'flatlined'

VANCOUVER (NEWS1130) - If you've been staying out of the housing market, waiting for a big drop, you might be in for a long wait.

Metro Vancouver's housing market is in a 'flatline' pattern, according to the numbers.

The Conference Board of Canada's latest look finds the average home costs less than last year, by about 5.7 per cent. Resales are up 3.9 per cent over the previous month but still down more than 20 per cent compared to last year.

Tsur Somerville of the Sauder School of Business says the signs don't show a collapsing market. "They're more suggestive of a leveling out, but looking at a period where the housing market is at a slower, calmer place."

Somerville says that should give people the chance to look around without major stress. 
"There's not a lot of pressure or worry that somehow if you miss a house now, that there won't be any next month, or prices will be out of your reach."

Somerville says it would take a major change in interest rates or an economic shock for the housing market to plunge dramatically.
As always, it's Tsur Somerville telling us those declining prices aren't declining prices (?) and if you're waiting to buy, don't... cause those declining prices (which aren't declining) won't keep declining.

Speaking of declining prices, earlier this week Observer had some new additions to the 30% below assessed value club for us on his blog Vancouver Price Drop.

In Abbotsford #1411-34909 Old Yale Rd is listed for 32% below assessed value:

In White Rock, #302-15342 20th Ave has dropped it's asking price to 32% below assessed value:

In Richmond, #204-3411 Springfield Drive is now 30% below assessment:

And in Pemberton, 7306 Clover Rd joins the 40% below assessment club:

Somerville says it would take a major change in interest rates or an economic shock for the housing market to plunge dramatically.

I guess that means the 30% and 40% below assessment club would become the 60% and 70% club at that point.


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  1. Personally, and as a very long time ready of this blog... I think you are right. Another statement Stoneleigh (Foss) suggests we are really looking at an 80% drop because the prices were unrealistic from the 80s on. BUT... what are the stats on this? Are we taking the worst of the worst (best of the best) price drops... which could well be just desperation. Maybe Ive answered my question... the fact there may be desperation indicates the gig is up?

  2. Somerville lives and works at the epicenter of one of the greatest assets bubbles in recorded history---- and the dude completely missed it.

    1. Be fair to Somerville. He is being very well paid to promote the RE industry's point of view, and he does a good job of it.
      I am far more derisive of Global TV et al who showcase him as an "expert" rather than the paid shill that he is.
      "It is difficult to get a man to understand something, when his salary depends upon his not understanding it!"

  3. It's a flat line straight ^&#* down.

  4. It is bad enough that "Tsur Somerville of the Sauder School of Business" even called on for an opinion.

    Before education became an industry in this province Sauder was just another "shill" pay for education and get a job in 6 months scam industry. Now Sauder alumni has some type of "prestige" being associated with a purveyor of higher education.

    Makes me sick.....period!


  5. New listings still outnumber those being sold, which has been the case all year.

    Spring will be interesting.