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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Chatting with (homeowner) friends in Victoria, they are starting to see that Vancouver is in trouble. They don't seem to see that Victoria began its melt before Vancouver soured. And yes, they all think that their particular segment of the market will be insulated. It is sad, and almost laughable, to hear their opinions echo those of the Americans, the Irish, the Spanish....
ReplyDeleteYou know... even when this crash finally happens ten years after I thought it would... Ive gotten so used to renting again... it gives me a freedom. I dont think I would buy back in. I can just leave .... at any time. No consequences. Of course, the new tenants would have to take care of the kids.
ReplyDeleteYou're so right. I got a lecture from a colleague yesterday about how he went to see a few open houses last weekend. He told me that one of these would be perfect for me and my family and this was a great time to buy. He is putting an offer on another house which would make it 4 properties he owns.
ReplyDeleteMeanwhile, and quite unbelievably, he has put his condo property up for sale because he thinks they are terrible investments and he has to get out. He cannot seem to link the two sentiments! BTW he is an educated and savvy person in other aspects...just dumb when it comes to RE.
No one wants to see it.
ReplyDeleteThat is the crux of it, an ostrich with its head in the sand might be a more appropriate illustration. Although the snake taking the cute little song bird is a pretty amazing picture!
There are many reasons why "average" person does´t understand what´s going on.
ReplyDeleteGovernment and banks are constantly lying about the mortgages. When appears that housing market is slowing down, they just put more incentives on it and people start buying more again - to a certain point of course.
Then we have realtors, who depend on the market with their life. They often misinterpret data (clear example can be Canada’s Housing Activity Is on the Rise Again) and use them to assure their clients that everything is OK.