Westside Realtor's report on the dismal August 2012 numbers

On July 29th we introduced you to Andrew Hasman, another realtor from the west side of Vancouver who has been calling the market for what it is... a bubble.

A year ago, when prices were going crazy on the west side, he wasn't one of the cheerleaders for what was going on. Quite the contrary, he was calling the market 'unhealthy' and warning about the consequences:

"The local person is completely out of this market," he said. While skyrocketing prices have made business good, Hasman said that the current market, with housing prices rising 10-15 per cent each year, is unhealthy.

"Anytime you have extremes in markets, it's never healthy," he said. "You end up with a bubble. If the local economic base can't support these levels, then at some point you're going to have a lot of people burned big time. It's not sustainable."

In July he told us that:

This feels like the first Normal Real Estate market in many years. That is if you can even define or remember what 'Normal' really feels like.  Gone are the bidding wars and gone (for now) are the days when homes were selling in mere days. For buyers there is now good selection and no pressure to make that big commitment... Sales of homes across the Greater area of Vancouver are at levels not seen since 2000!

Overall, prices still seem to be holding with some price softening in specific markets only. Vancouver’s Westside looks to be one of those markets.  Fewer buyers from China, tougher mortgage regulations and concerns over the global economy are all weighing on consumer confidence. I predict these market conditions will continue through the balance of 2012 with further price softening.

Hasman is out with his September market report. Here are some of the hilights of the results from last month:

August was stable compared to July in that the supply of houses relative the the actual sales remained fairly stable. The one notable statistic was the Average sale price of a house. In August the average was pulled higher by 14% over the 2011 average sale price. This increase is due to two very large sales on the Westside during the month. Of the 75 houses sold, there were two sales over $12 million which have brought the average sale price up.

Another interesting statistic is the drop in supply from Aug 31st to Sept 1st of approximately 60 houses. For the first time in several months we have under 1000 houses for sale but I predict this number to quickly move up as more homes enter the market in time for the Fall.

In the past three weeks I personally noticed a pick-up in the number of buyers looking at houses and the number of offers received. So far we have not seen this translate into increased house sales. With September upon us it will be a matter of time before we see if our market will see increased sales activity or not. Stay tuned!

Here’s how the numbers stack up for Westside Real Estate Activity in August:

Single Family Homes

• During the month of August there were 75 homes sold compared to 130 last August and 83 one month ago. Year to date house sales are down 41%

• Average selling price of a house was up 14% from last August to $ 2,859,945. I believe this increase is due to two homes sold over $ 12 million during the month. This has no doubt pulled up the average. Year to date the average sale price is up 2% to $ 2,451,044.

• There were 995 homes listed for sale at Aug 31st this year compared to 643 one year ago. An increase of 54%

• At August 31st we have 13 month’s supply versus 5 month’s 1 year ago.

Sales of all Single Family Houses in all Vancouver areas was down 39% from this August compared to last August.

Year to date sales are down 28%.

Average sale price year to date is down 5% to $ 1,120,411 with 12.6 month’s supply of houses available compared to 6 month’s supply 1 year ago.

==================

Email: village_whisperer@live.ca
Click 'comments' below to contribute to this post.

Please read disclaimer at bottom of blog.

Did the REBGV misrepresent the HPI decline for August?

In our last post we talked about the media coverage of the August 2012 real estate statistics in our little hamlet on the Edge of the Rainforest.

In their effort to manage the bad news, the Real Estate Board of Greater Vancouver (REBGV) put on a brave face and did their best to spin the dreadful results. The REBGV President said:

"Home sales this summer have been lower than we’ve seen for most of the past 10 years, yet we continue to see relative stability when it comes to prices."

Sales were abysmal but the REBGV desperately grasped at 'the price straw' as their last hope.

They call it "price stability."

And by price stability, the REBGV means their precious Home Price Index. The group’s composite benchmark price for all residential properties in Greater Vancouver is $609,500 which they tell us is down 0.5% from a year ago and 1.1% from July.

But faithful reader, P.C., takes issue with this claim.

I really enjoy reading your blog and I read it every week.

This is a note about that the Real Estate Board of Greater Vancouver incorrectly stating that the MLSLink Housing Price Index DROPPED 0.5%. THIS IS INCORRECT, IT SHOULD BE A 2.5% decline. Media outlets have followed the REBGV's "party line" of a 0.5% price drop.

I am basing the MLSLink® Housing Price Index (HPI) benchmark prices from pages published by the REBGV's own website in 2011 and 2012.

These websites mention that the August 2012 MLSLink® Housing Price Index (HPI) benchmark price was $609,500 while the Aug. 2011 MLSLink® Housing Price Index (HPI) benchmark price was $625,578.

So a simple calculation of $609,500 divided by $625,578 yields 0.9743 or a price decline of 2.5% NOT 0.5%.

I have contacted the REBGV people to ask them to issue a correction about this incorrect fact. I hope you and your readers will press them to correct their figures and pressure them to issue a news correction. Housing price numbers should be published correctly.

Thank you for your interesting articles, and keep up the good work!

So what do you think gang? 

Is P.C correct?

 Has the REBGV misrepresented the HPI decline in prices for August?

==================

Email: village_whisperer@live.ca
Click 'comments' below to contribute to this post.

Please read disclaimer at bottom of blog.

The media discusses the August 2012 real estate numbers... lipstick anyone?

It seems there's no way to put lipstick on the horrid real estate statistics for the month of August.

If you didn't catch it, the lead story on CTV Vancouver news tonight is the slumping Vancouver real estate market. Unfortunately I can't embed the clip here but you can click on the link to see – CTV profiles how experts are beginning to wonder if Vancouver’s real estate bubble is going to burst"

Meanwhile the Financial Post headlines Vancouver home sales plunge, posting second-worst August since 1998.

How bad are the numbers?

As VanPro over on the blog Real Estate Talks notes the overall Months of Inventory (MOI) is approaching 11 months.

• August 2012 has now posted the second lowest sales totals in the last 15 years.
• When it comes to sales of Single Family Houses (SFH), there were only 75 sales on the West side of Vancouver in August 2012 (there were 995 available for sale). That's down a shocking 42.3% year-over-year!
• On the east side of Vancouver there were only 79 sales, down an even more shocking 46.6% year-over-year!!

As we said at the start of summer, the numbers from July and August were going to be fascinating to watch... and they were.

Normally listings drop of dramatically and sales slow. What we got was only a slight pull back in listings and sales plummeted. 

Prices in areas like Richmond, with homes that are actually selling, have begun dropping below assessed value. We are seeing sales activity pick up a bit as the price point has been reached for a few that are hovering (one of the signposts we look for as the market begins it's collapse).

A larger number of high end sales were completed last month (another of those signposts). But even here prices are dropping. A few days ago we provided you with stats of the high end sales in August up to August 22nd - one of them for just over $12 million. As the month came to a close, we now know there was a second $12 million sale. But these two properties started off with asking prices of $16 million and $14 million.

They say on the way down, prices are very, very sticky. But they are starting to move.

Normally listings really start to pick up in September and sales remain constant through September. With the current steady diet of bearish real estate news, the September surge in listings will be met with more dismal sales as the negative feedback loop picks up momentum.

We are currently sitting on an all time record streak of 16 consecutive days with daily sales totalling less than 100 per day - despite the fact that we just passed a three day weekend (when normally we see a bump in sales from the longer non-reporting weekend sales.

But the streak remains unbroken.

The real estate propaganda machine has been forced to finally declare our's a 'buyer's market'.

Problem is... no one wants to buy.

==================

Email: village_whisperer@live.ca
Click 'comments' below to contribute to this post.

Please read disclaimer at bottom of blog.

Mon Post #1: August 2012 real estate market report from a west side realtor who calls our conditions 'a bubble'.

On July 29th we introduced you to Andrew Hasman, another realtor from the west side of Vancouver who has been calling the market for what it is... a bubble.

A year ago, when prices were going crazy on the west side, he wasn't one of the cheerleaders for what was going on. Quite the contrary, he was calling the market 'unhealthy' and warning about the consequences:

"The local person is completely out of this market," he said. While skyrocketing prices have made business good, Hasman said that the current market, with housing prices rising 10-15 per cent each year, is unhealthy.

"Anytime you have extremes in markets, it's never healthy," he said. "You end up with a bubble. If the local economic base can't support these levels, then at some point you're going to have a lot of people burned big time. It's not sustainable."

Last month he told us that:

This feels like the first Normal Real Estate market in many years. That is if you can even define or remember what 'Normal' really feels like.  Gone are the bidding wars and gone (for now) are the days when homes were selling in mere days. For buyers there is now good selection and no pressure to make that big commitment... Sales of homes across the Greater area of Vancouver are at levels not seen since 2000!

Overall, prices still seem to be holding with some price softening in specific markets only. Vancouver’s Westside looks to be one of those markets.  Fewer buyers from China, tougher mortgage regulations and concerns over the global economy are all weighing on consumer confidence. I predict these market conditions will continue through the balance of 2012 with further price softening.

Hasman is out with his August market report. Here are some of the hilights of the results from last month from a realtor who seems to recognize this bubble market for what it is.

Take note of the statistics about Single Family Homes on both Vancouver's west side and Greater Vancouver. They are quite striking:

As expected ( after four months of declining sales ) the Summer market continues to chug along with house sales at levels not seen since 2009. There are now 12.5 month’s supply of houses for sale on the Westside which technically puts us in a Buyer’s Market. This is quite a change from where we were one year ago when we had 4.5 month’s supply. I expect the level of homes on the market to remain stable though August with sales hovering around 70 to 90 sales for the month.

September and October typically bring an increase in demand but also an increase in inventory. This year may see many home owners de list their properties not willing to sell at prices the market is willing to pay. If this is the case we should see inventory levels remain stable.

On Vancouver’s Westside home prices continue to be far out of line with economic fundamentals meaning we have become fully reliable on foreign buyers supporting our current price levels. If we continue to see an absence of these buyers then prices ( in my opinion) will trend lower. You only have to look at the High End of the market above $ 3 million and there is a glut of homes for sale. Where have all the buyers gone?

Here’s how the numbers stack up for Vancouver’s Westside:

Single Family Homes:

• During the month of July there were 83 homes sold versus 139 one year ago. A decline of 40%. Year to date home sales are down by 41% compared to 2011.

• Average selling price of a home was $ 2,397,045 almost unchanged from 1 year ago. Year to date the average sale price is also even with last year at $ 2,415,050.

• There were 1038 homes listed for sale at July 31st this year compared to 632 1 year ago. That is an increase of 64%

• There were 12.5 month’s supply of houses at July 31st versus 4.5 month’s one year ago.

Greater Vancouver Real Estate Market (single family houses)

• Sales of all detached properties on MLS in July fell 28% from 1101 units last July to 790 units this year. Year to date sales are down 26%.

• Average selling price has fallen by 8% from $ 1,133,357 to $ 1,041,325.

• The supply of houses has increased by 24% and the month’s of supply has increased from 5.8 to 10 month’s this year.

Overall our market seems to be gradually cooling . That being said, it is summer and this is probably what a “Normal Summer” market should feel like. For most Vancouverites this market feels slow but remember so many of the past years we have had booming conditions. A Booming market is only sustainable for so long.

Wow!

Westside Single Family Home (SFH) inventory has increased 64% from a year ago. The months of inventory (MOI) has increased from 4.5 MOI to 12.5 MOI in that time period.

In Greater Vancouver the SFH inventory has increased from 5.8 MOI to 10 MOI.

Imagine what it will be like if the traditional post-summer inventory surge materializes?

==================

Email: village_whisperer@live.ca
Click 'comments' below to contribute to this post.

Please read disclaimer at bottom of blog.