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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"The Sizzle is coming off the Vancouver housing market" - BMO

The Bank of Montreal has a chilling report out that should send shivers down the spines of all speculators out there.  BMO is predicting that Vancouver's housing market could face a bumpy landing.

As reported by News1130 radio, BMO says Vancouver's home prices will fall over the next couple of years.

Year-over-year home re-sales are down by more than 13% in April and sales in the first four months of this year compared to last year are down 20%.

"I can best describe it as a softening of a market," says BMO Mortgage Expert Carolyn Heaney. 

BMO Senior Economist Sal Guatieri says the price of homes in Vancouver and uncertainty over long-term mortgage rates are creating a buyer's market. He also says rich foreign investors who have driven up real-estate prices in Vancouver are now looking at cities that are less expensive.

"The sizzle is coming off the Vancouver housing market," Guateri says.

The report also says condos are being overbuilt in Vancouver and that is curbing demand.

Meanwhile, over at Vancouver Condo Info, regular contributor ZRH2YVR shares some additional inventory facts.

The west side of Vancouver exceeded 1,000 available detached listings on Thursday. Sales are off 17% and listings are up 25%.

In addition to single family houses, a serious flood of apartments is going up for sale on the west side – current pace is for 1,230 of attached units (Apartment/townhouse combined).

Meanwhile Richmond will likely have a 'months-of-inventory' total which is over 12 months by the end of May. More significantly the vast majority of transactions are now for less than the tax-assessed value of the properties. Sales are plummeting by 47%.

Interesting times.

Also... don't forget about out 20,000 listings prediction competition. Put in a comment and let us know when you think Vancouver will hit 20,000 available properties for sale.

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

Please read disclaimer at bottom of blog.