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Sunday, December 1, 2013

Alphabet Arnie declares that the Richmond Vancouver Real Estate market is now a 'sellers market' - UPDATED

UPDATE: The data in Richmond Realtor Shuchat's post is about Vancouver, not Richmond, as originally posted on this blog. The reference to Richmond has been removed (hat tip A. Shuchat).

Local Richmond realtor, Arnold Shuchat, is out with his latest market analysis and he declares the Vancouver market has turned. Now it's a seller's market:

If one wanted a weather vane to see where the real estate market winds are blowing, this would be as close to it as one could get. I designed the Seller's Delusion Index to track sellers' frustration over time, with the hypotheses being that the more expired and terminated listings there are as a ratio to sales, the greater the downward pressure on real estate prices. A seller has two options: cut his price or take it off the market. One results in a sale and the other a terminated listing.

As an historical measure, (Terminated + Expired listings) divided by number of sales in or about February of 2011 an accepted market high point, were running close to historic lows of about 27% depending on property type. At the worst recent time since then, they were running around 244%. That is akin to saying that when things are "hot" sellers had a 1 in 3 chance of being frustrated, whereas when things cooled down, they were 9 times more likely to be frustrated.

As one can see from the chart below, sellers' expectation are being more fully met now and the trend is leaning towards a seller's market once again. This table supercedes all previous ones as the sufficient time lapse following the months' end assures a more accurate set of numbers to allow for complete reporting of sales, terminated and expired listings.