Vancouver Market in "Full Retreat"

For the past few years the central focus of the real estate market has been the all important "buyer confidence."

Hundreds of hours through press releases and millions of dollars have been spent by the Real Estate Industry on advertising, etc.  All to build up that crucial "buyer confidence."

And a crucial component of massaging that confidence has been the mainstream media (MSM).

While there have been countless articles this year about Housing Bubbles and the threat of a collapsing market, the person on the street has been somewhat oblivious to what is going on.

But this may well be the week in which Joe Q. Public truly begins to take notice of those negative real estate stories in the MSM.

I don't think anything can compare to the headlines that have come out in today's papers.

You can't ignore paper's like the National Post screaming "Vancouver real estate market in full retreat", it's a moniker that says it all:

Realtors are calling it a “summer lull,” but the latest statistics show Vancouver’s housing market is mired in a 10-year low for sales with no immediate end in sight.

Each month is starting to look worse than the previous one for Canada’s most expensive housing market as property sales in July dropped 11.2% from June — marking a decade low for activity.

The Industry can't hide the reality of the market any longer.

The Real Estate Board of Greater Vancouver reported the worst July since 2000, and 31.2% below the 10-year average for the month of 3,051 sales.

The board said there were 2,098 residential property sales of detached, attached and apartment properties in July — off 18.4% from a year ago.

Things are getting so bad that Vancouver's average detached home price declined for five straight months now.

The average price is now down 15.7% from February's high of $1,235,244 to sit at $1,041,325 - a plunge of $193,919!

And as the August month kicks into high gear, sales are truly collapsing. Results today for all sectors of the market totalled only 49 sales!!

It's the first sub-50 sales day of the year.

If this keeps up for the rest of the month, July's numbers will look like a sales bonanza in comparison.

What were sales in July like?

Single Family Home sales in July 2011 vs July 2012:

Richmond: -51%

Jul/12 = 60 sales

Jul/11 = 123 sales

West Van: -47%

Jul/12 = 46 sales

Jul/11 = 86 sales

Coquitlam: -43%

Jul/12 = 67 sales

Jul/11 = 100 sales

Van West: -40%

Jul/12 = 83 sales

Jul/11 = 139 sales

Burnaby: -39%

Jul/12 = 58 sales

Jul/11 = 95 sales

North Van: -35%

Jul/12 = 60 sales

JUl/11 = 92 sales

East Van: -24%

Jul/12 = 109 sales

Jul/11 = 144 sales

(Hat Tip VMD)

Ugly doesn't begin to describe these numbers. As the Financial Post screamed, the market is in full retreat.

All that remains for the perfect storm is seller panic.

And the dog days of Summer may well provide the fuel to incite pandemonium.

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As we enter August, the heat rises on a stagnating Vancouver market

As July comes to a close and we enter the dog days of summer, let's recall our post about the seasons of real estate last week.

Summer, with its high humidity, roasting temperatures and long hours of daylight; this sense of seasonal freedom translates into cottage escapes, playtime, reunions, weddings, and beers/barbecues.

And, when it is summer leisure versus business, leisure usually wins - with good reason: we spend all winter dreaming of those lazy days of summer. With this pleasant distraction present for buyers, the business of purchasing property diminishes dramatically. In fact, the demand during summer for real estate can be so limited, many realtors will dissuade their clients from listing or recommend they postpone coming to market until autumn. As a result, the only properties which do come to market tend to be either relocations or changes in household status (the arrival of a newborn, co-habitation or divorce).

For real estate in Vancouver, Spring was a bust: sales tanked, listings exploded.

Summer has seen sales continue to tank.  But instead of the usual concurrent dramatic drop in listings, properties continue to be put on the market - albeit at much slower pace.

As we enter the first day of August (traditionally an extremely high day of listings expirations), we are only 370 listings ahead of last month's first day total.

You may recall that the first day of last month saw a massive number of listings expirations, a total of over 900 listings melted from the total as some property owners choose to remove themselves from the market for summer.

Thus it is conceivable that when today is all said and done - and the results are in - we could see our first month-over-month decline in total listings this year.

Even if this happens, the unavoidable fact remains... each and every sales day this year has seen more listings come onto the market that there have been sales for that day.

Plus, consider these two points (click on image to enlarge):

The seasonal declines in listings are expected. The fact is that there have been far less expirations than there should be for a normal month of July. Far from being a harbinger of a market that may be recovering, the mere fact total listings have not plunged from their levels going into Summer is evidence that the bear conditions march onward.

The large number of listings that have been pulled from the market for Summer have simply been absorbed, the horrible sales rate unable to dent the huge year long buildup in listings.

The dog days of Summer are here. The heat is rising. And the real market pressure about to begin.

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Fri Post #2: Post July 9th Real Estate Sales are falling off a cliff.

So yesterday was another intriguing day for real estate sales statistics.

The entire Lower Mainland only produced 94 sales. In Greater Vancouver that number was a stunningly low 59 sales.

Incredibly 19 of those 59 sales were executed pre-July 9th, part of the glut of activity in the rush to meet the new mortgage rule deadline (and thus caught up in a backlog of CMHC approval).

Only 40 of those sales were post-July 9th. (hat tip zrh2yvr).

The bottom line is that post-July 9th sales have been amazingly weak.

Year to date West Vancouver sales are trending to be down 48.7% from the first 7 months of last year. Richmond is trending to be down 46.2%. And the west side of Vancouver is trending to be down 41.1%

The weak daily numbers lately have us on track to have the worse July in over 11 years, even worse than July 2008.

Can you imagine what those numbers will be if the post-July 9th trend continues for the rest of the year?

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Are plunging real estate sales about to bypass the lows of 2008/2009?

To those who watch real estate, the sales totals the part few days are setting off alarm bells.

Summer is normally a slow period, but the latest results are positively dismal. The last three sales days have all come in under 100 sales.

Last Thursday's total was 87, Friday was 61, and yesterday - normally a high day because of the weekend - yielded only 86 sales!

And these totals are still infused with some delayed pre-July 9th sales. In the rush to beat the new mortgage rule deadline, many sales from the deadline surge are only now being recorded as closed. Of the 86 reported sales today, at least 33 were pre-July 9th.

Comparing daily sales to last year, average sales per day in July 2012 was 132. This July we are at 109 and falling. Some are even speculating that when the pre-July 9th sales work their way through the system we may see some sales day totals under 50!

Single Family House (SFH) sales are falling off a cliff, down 25% over last year and down 10% from last month at least.

The dismal numbers have some industry members fearing sales may plunge below 2008 levels as summer becomes fall.

Realtor Larry Yatkowsky takes a look at the numbers and suspects the market may be on the verge of a significant plunge.

Yatkowsky notes:

Back in June of 2008 Vancouver’s housing market was in the middle of a steep dive as it recorded only 33,136 sales. The decreasing number of sales continued to twist and turn as it dropped to September 2008′s total of 28,475 sales. That particular dive straightened months later with a grand splash as April 2009 recorded total sales of 21,459.

After the looking at the current trending sales numbers, Yatkowsky ruminates circumstances may be about to get much worse than in 2008 and that another big dive in sales may be coming:

It appears that the dive graph called Vancouver house sales contains indicators that the market may surpass September 2008′s lackluster performance with June 2012 recording 28,617 sales – only a few hundred sales separate the two... and its indicators (suggest) Vancouver’s real estate market’s performance is not about to straighten.

Will the result in Fall 2012 be a plunge greater than in September 2008? Will the slide continue below the bottom hit in April 2009?

Emergency level interest rates pulled Vancouver out of the last slide.

That stimulus won't be available this time so you can understand Yatkowsky's concern.

Alarm bells are going off for industry insiders.

You have to wonder at what point those alarm bells will start to sound with the average joe on the street. Because when they do, then the sales crash will become a price crash.

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