Blindsided?

Sigh.

Everywhere you look these days, it seems the media is screaming about the housing bubble.

The latest is CBC who tell us the Canadian housing market is overpriced and bubbly in many areas.

Meanwhile real setae sales data from Vancouver is just plain ugly.

Listings are shooting upward and sales are slowing dramatically. Sales for April 2012 are down 13.2% from April 2011. They dropped 2.6% from the March 2012 total, a month which was down 29.6% from March 2011.

Detached home sales are down 19.7% and the average single family house price has plummeted by $100,000 so far this year.  The surprising gain of last month has been quickly and suddenly wiped out as you can see in realtor Larry Yatkowsky's graph (click on image to enlarge):

The always strong 'Spring Market' is a complete no show.

Garth Turner reports that in the Vancouver suburb of Richmond over 75% of property deals are now going for less than the assessed value. Says Turner:

Forget bidding wars. This is becoming a realtor graveyard. Suddenly owners are doing what always happens in a market dive – realizing their paper profits will turn vaporous if they don’t cash out. Listings rise, sales don’t and prices fade – the classic vicious cycle.

But despite all the media hype, the average joe on the street is still oblivious to what is going on.

In the US, when the real estate bubble burst, many real estate investors found themselves blindsided. When everything fell apart, they never saw it coming.

Chatting with a few people today... despite all the media attention, so many are going to get blindsided by what's coming.

No one wants to see it.

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Is Vancouver's Real Estate Situation comparable to the Titanic? - Updated

Faithful readers know we have been charting the number of real estate listings in Vancouver with keen interest this year.

Rest assured that local realtors are also looking at these numbers... with growing concern.

Today local Vancouver realtor Larry Yatkowsky casts his eye at the burgeoning listings of properties in Greater Vancouver and wonders if comparisons can be drawn to the voyage of the ill fated Titanic.

Yatkowsky posts the graph above (click on image to enlarge) and observes that the:

"total listings in Vancouver, Fraser Valley and Chilliwack (combined) continue to climb. In a matter of days the Titan accumulation of listings may eclipse the all time high achieved last year."

Yatkowsky notes that at this time last year, total listings were 21,705 units. The all time record for total listings was achieved on October 1, 2011 when the market had a record high point of 25,248 listings.

Yesterday total listings exceeded the April 12, 2011 number by 2,417 units (24,122).

"In recent days we have seen total listings leap higher by 200 and more units per day. Assuming this accumulation continues, it seems feasible to suggest that Total Listings will surpass last years record this month – a full five months ahead of last year."

The concern, of course, is that the heavily anticipated Spring Market is failing to materialize.

Yatkowsky suggests that, by themselves, such a load of listings might not sink the market. But when the weight of dismal sales from the non-existent Spring Market (which in Vancouver is currently recorded as -29.2%) is added to the equation, the outlook becomes increasingly questionable.

Says Yatkowsky...

"It is suspect that the combined weight of both an extraordinarily high number of listings and depressed sales may not need the services of an iceberg to cause upending calamity. Indeed, as many have warned, it may only be a small ripple of a change in interest rates that will be needed to destabilize Vancouver Real Estate’s Titanic voyage."

Without a surge in sales to dampen the listings surge normally provided by the Spring selling season, the onslaught of listings over Spring, Summer and Fall could swamp the market.

Is the tipping point near?

Meanwhile Cameron Muir of the BC Real Estate Association has released more bearish news.

Muir paints the dismal March sales in dollar volume of homes sold through Multiple Listing Service.

In BC that 'dollar volume' declined 26.5% to $3.8 billion in March compared to the same month last year.

A total of 6,882 MLS residential unit sales were recorded over the same period, a decline of 20%.

Said Muir:

"The spike in consumer demand recorded a year ago was not repeated last month. A marked increase in high-end home sales a year ago pushed up unit sales and skewed average prices higher."

Oh? Isn't that 'spike in consumer demand' called the Spring Market?

It's also curious that at this time last year, Muir wasn't pointing that high end sales were misleadingly skewering prices higher. He seems to have left this tidbit out when those average prices last year were trumpeted in press releases. Weren't they held up as evidence of the strength of the Vancouver market?

Muir goes on to say:

"... so it’s no surprise to see fewer home sales and lower average prices in March of this year.”

I bet it's a surprise to all of those who thought HAM was supposed to keep out inflated home values high forever.

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