North Vancouver Homes: August Sales and Inventory

Friday, August 29, 2008

August Sales and Inventory

Bye Bye Summer. A prolonged slump in sales and consistent increase in listings has increased the MOI (months of inventory) dramatically. Last year we had 3.5 MOI at the end of August and now we are sitting at 12.5 MOI.

Sales are down 53% (oh my God?) compared with July 2007 and the news has been more gloomy every week. We can expect more gruesome headlines next week.

We started 2008 with slightly less inventory than 2007. We are currently up 72% (climbing every month) over last year. North Vancouver inventory is up over 104% (same as July) compared to August 07.

Listings have begun to slow down and dropped about 2% when compared with last August. That is likely a blip that will reverse in September as the fall market prompts more hopeful home sellers to list homes and investments. If the MOI stays high, prices will continue to adjust downward.

Sellers:

Price sharply and don't get greedy.

Buyers:

The market is nervous. Negotiate a tough deal and hold long term!

What are you seeing out there? Keep on posting!

Here are some visuals:

Listings:

Sales:

All sub area inventory charts here: INVENTORY (UPDATING)

233 comments:

«Oldest ‹Older 1 – 200 of 233 Newer› Newest»

Paul said...: FV:11428
New Listings 104
Price Changes 73
Sold Listings 42; August 29, 2008 5:42 PM
M- said...: Regarding the sales chart, it looks like gravity got stronger this year...; August 29, 2008 6:20 PM
tulip-Mania2 said...: "Regarding the sales chart, it looks like gravity got stronger this year..."

Yes they were able to suspend the law of gravity, but not revoke it. They flooded the economy with cheap money, and created artificial demand, and when the artificial demand was exhausted they printed even more money and borrowed demand from the future.

Biggest housing bubble in history, biggest bang.

Also:
Thanks Paul, I estimate there are 100,000 condos(some under construction still) that were purchased on speculation.

Do you have a more educated guess on that number?

And oh yes, I almost forgot..

Tick Tock, Tick Tock; August 29, 2008 6:52 PM
Schnorrer said...: For any renters out there who still doesn't get it, do this:

Go to www.zoocasa.com and zoom in the map on your intersection. Look at the price of the unit closest resembling your own.

Then plug the numbers in the New York Times buy versus rent calculator:
http://www.nytimes.com/2007/04/10/business/2007_BUYRENT_GRAPHIC.html

I think you will be surprised by the result.; August 29, 2008 6:57 PM
Paul said...: Check this out Tulip:

http://tinyurl.com/5h243f

comprehensive list of all new developements.; August 29, 2008 7:15 PM
tulip-Mania2 said...: Thanks Paul, could you email the link to Rennie, he somehow thought there was a shortage of condos.

100,000 units perhaps I'm not be so far off.; August 29, 2008 7:36 PM
exx said...: Paul, thanks for providing us with a front row seat to this meltdown. When you started up this blog in December did you expect to see anything like this?

I wonder if we'll hit <1000 sales this year.; August 29, 2008 8:53 PM
Paul said...: Exx,

The writing was on the wall but I really didn't expect things to progress so quickly.

After a watching our market defy gravity for so long I was surprised at the weakness of the market last Spring. My only thought at this point is will this market fare better or worse than the 1981-2 bust.; August 29, 2008 9:21 PM
Anonymous said...: Thanks Paul.
One question, does thinking about this downturn in terms of the 81 down turn become a self fulling prophesy?
Scary thought.
Dyugle; August 29, 2008 11:14 PM
macho slob said...: I recall some recent claims from Case Shiller stats that metro areas which managed to delay the downturn were dropping much faster than the leaders of the pack. Don't know why, but it sure seems to be the case in Vancouver.

The speed of the downturn is truly amazing, and it's hard to believe that we're just getting started.; August 29, 2008 11:23 PM
patriotz said...: metro areas which managed to delay the downturn were dropping much faster than the leaders of the pack. Don't know why

The main reason is that the credit crunch happened about a year after the first price declines (and in fact was a result of the price declines). So the markets that started falling later had more factors to pull them down.

One question, does thinking about this downturn in terms of the 81 down turn become a self fulling prophesy?

Not at all, because the bulls either have been unaware of '81 or have convinced themselves that "it's different this time". And they will keep on thinking this way all the way down.

The bears of course have been aware of '81 all along, but the bulls have never cared what the bears think. And it's the bulls who are the buyers, by definition.

It doesn't matter what people think. If prices have become detached from rents and incomes, they have to come down. There is only so much dumb money.; August 29, 2008 11:51 PM
Vansanity said...: tulip - I counted 60 new housing developments on paul's link (map). If we were to assume 150 units per building that's only 9,000 units, right? I know what your getting at but is the 100,000 completely arbitrary or am I missing something other than about 90,000 units?; August 30, 2008 2:06 AM
Anonymous said...: On Rob's site I posted the developments in Kelowna for interest to everyone. There are 53 developments going on in Kelowna and that was just those listed in Homes&Land magazine. Kelowna's population is only 106707 so imagine where those buyers are going to come from???; August 30, 2008 8:39 AM
tulip-Mania2 said...: vansanity: that is a snap shot of a small area at a given time, and it shows Vancouver only.

I am talking about GVRD and the madness which has occurred over the last few years.

I think there have been too many purchases made as an "investment that can’t go wrong" which will end up as excess supply when the going gets rough,add what is under construction, my guess is there will be an overhang of inventory well over 100,000.

I read economics and history, I look at the skyline as I make my way home from English Bay, I see the for sales signs which almost outnumber the weeds, when I go visit friends in the Valley, I look around , and I note everyone has bought, I glance at the graphs, and I conclude:

Tick Tock, Tick Tock; August 30, 2008 9:07 AM
tulip-Mania2 said...: On Rob's site I posted the developments in Kelowna for interest to everyone.

annon:8:39 you aren't embarrassed to say you post at Rob's blog?; August 30, 2008 9:11 AM
investah said...: What's wrong with Rob's site???
Fish is missing in action.
Mohican has caved in to pressure from MRS. Mohican, and my god, have you seen the denial gong show on Realestatetalks???

Where is VHB when we need him?
Well, maybe we don't really need him as the market appears to be unraveling quite nicely, and paul has filled the gap admirably...but we can never have too much common sense.; August 30, 2008 10:25 AM
Drachen said...: Patriotz

"There is only so much dumb money."

There's only so much money period. The whole scheme requires an exponentially expanding money supply so it will eventually collapse even if everyone drinks the kool aid.; August 30, 2008 10:25 AM
macho slob said...: Even the dumb money has stopped buying.; August 30, 2008 10:47 AM
jesse said...: "Even the dumb money has stopped buying.

What do you call the just over 1500 buyers in August?; August 30, 2008 12:16 PM
Vansanity said...: tulip - Thanks. I don't disagree that there's a huge glut out there and even more coming down the pipe. Speculators have had their fun and made their money but the margins are gone and when too many people try to make money off the same scheme, saturation occurs as we're seeing. So, the profit margins disappear much like the buyers and money have disappeared.

I hope your number is right, can you imagine what that would look like in the GVRD? The MOI right now seems off the charts. Even another 5,000 property listings would hurt, let alone 80,000.; August 30, 2008 12:21 PM
tulip-Mania2 said...: Vansity, in my own circle of friends and family, there is no one left to buy, and many of us will inherit at least a couple pieces of real estate.

One of my family members is a doctor who has been making much more money flipping real estate than healing.

The distortion and misallocation of resources in the last few years is nothing short of insanity, too much printed money, and easy credit(Canada has subprime, but we don't call it that), was chasing too few assets inflating prices.

Now there is a glut of capacity in almost every industry, but the over leverage that took place in residential RE takes the cake.

Downright immoral, Greenspan and company should go to prison, based on what their money printing has done to the price of the basics of life, and how it has impacted on the poorest.; August 30, 2008 1:27 PM
Anonymous said...: the Vancouver Sun
Published: Thursday, August 28, 2008
I read that story in the Sun.....here's the part that caught my eye in the article,

"......That's why, although it may be in poor taste, many young people are rooting for a full-blown meltdown of the real estate market. Unfortunately, many of the casualties inherent in such a scenario would be young people who leveraged themselves into knots to get into a market that they believed would only, could only, go up."; August 30, 2008 2:16 PM
macho slob said...: Hey jesse,
Those 1500 buyers in August are way beyond dumb, they're friggin insane!; August 30, 2008 3:37 PM
jesse said...: Anecdote from a Realtor who will only accept a listing in the summer if it includes September. His reasoning is that there are more sales in September than in the summer. From Paul's graphs this appears not to be the case and searching through sales history going back to 1999, this is not the case at all. Do other Realtors typically wait for the "fall bounce"? The data indicates there is no such thing.; August 30, 2008 6:17 PM
Schnorrer said...: tulip mania said:

"Greenspan and company should go to prison"

Classic. Blame the fed chairman appointed by President Ronald Reagan in August 1987, and then reappointed at successive four-year intervals until retiring after a record-long tenure on January 31, 2006.

Sure. That Greenspan guy is to blame. The responsibility couldn't lie with the people who recklessly bought into the bubble.

By the way, I'm curious: who is it that you consider Greenspan's "company"?; August 30, 2008 6:18 PM
Anonymous said...: annon:8:39 you aren't embarrassed to say you post at Rob's blog?

August 30,

Tulip, I don't have a problem posting anywhere. When my user name is already used by someone else, such as it is on google/ blogger, I don't tend to sign up because I forget who I am...

I like the different avenues to read about the current R/E market.

View; August 30, 2008 8:16 PM
Anonymous said...: "Greenspan and company should go to prison"
“By the way, I'm curious: who is it that you consider Greenspan's ‘company’?”

The king’s men .. he he..... joking aside .. Isn’t Greenspan on the board of Paulson & Co? If Hilary won the presidency, she would've nominated him to … can’t remember what something befitting a king's man. lol; August 30, 2008 8:59 PM
DonkeyXote said...: "Classic. Blame the fed chairman appointed by President Ronald Reagan..."

Schnorrer, you have to blame Greenspan to some degree for the US housing bubble. His job was:

"to keep the economy healthy through the proper application of monetary policy... to influence the country's economic performance, to promote stable prices, maximum sustainable employment, and steady economic growth"

I don't think doing nothing while the mortgage industry lobotomizes itself is really fulfilling those duties. Maybe it does not directly control lending standards, but fed statements seem to carry a lot of weight, and it does have a bearing on mortgage rates.

And I don't think it's fair to blame average home buyers. They are not sufficiently informed to understand the impact of a market correction. The masses are just pushed along by media hype. In fact, I'm not even sure you can blame realtors :)

BTW, what does Ronald Reagan have to do with it? You're not another one of those nostalgic republicans are you?; August 30, 2008 9:01 PM
Schnorrer said...: donkeyxote said:
"BTW, what does Ronald Reagan have to do with it?"

Just pointing our that Greenspan was successively appointed by both Democrats and Republicans. And this covered the longest time span of any Fed chairman in history.

I think its ridiculously for armchair quarterbacks to look at what has happened after this guy retires and think, well I would have done such and such differently.

If he had the hindsight of knowing what did happen, then obviously he would have done things differently.

At some point people have to take responsibility for their own actions.; August 30, 2008 9:07 PM
tulip-Mania2 said...: Schnorrer:
Are you trolling?

Any student of econ 101 learns in the first week what will happen if you set short term interest rates lower than inflation,and leave it at that for too long, and flood the economy with cheap printed money.

The outcome was not hard to predict-asset inflation, followed by inflation, followed by stagflation, followed by recession.; August 30, 2008 10:25 PM
Schnorrer said...: Yes Tulip,

It is indeed so easy. You realized the connection between low interest rates and inflation, but Greenspan didn't know that. Maybe we should tell Bernanke that pearl of wisdom, because maybe he doesn't know that either.

Don't you think that at any given moment, there are a number of factors that a Fed chairman has to take into consideration? Don't you think it a tad arrogant to look back at a Fed decision from 6 years ago, knowing what transpired, and use hindsight to realize that it should have been done differently?

If only YOU were the Fed chairman -- the US would clearly have had better economic expansion since 1987 - the largest economy in the world would have been even larger!!!

Look, I understand that you feel that you are some sort of genius because you understand that the Vancouver housing market is going to crash. But all of us who post here know that it is going to crash - its been ridiculously obvious for a while now.

I think macho slob said it best - "Even the dumb money has stopped buying."

So, sorry Tulip, but being aware of the coming crash does not make you smarter than Alan Greenspan. I'm not smarter than the guy either, but at least I can admit that fact.; August 30, 2008 11:40 PM
Schnorrer said...: tulip mania said: "Greenspan and company should go to prison"

And also, you still didn't answer the question:

Who do you consider to be Greenspan's "company"?; August 30, 2008 11:43 PM
patriotz said...: If he had the hindsight of knowing what did happen, then obviously he would have done things differently.

Greenspan was told to his face that lenders had gone crazy and created a housing bubble, and he denied it.

And here's a little gem from his #2 man and anointed successor:

Ben S. Bernanke does not think the national housing boom is a bubble that is about to burst, he indicated to Congress last week, just a few days before President Bush nominated him to become the next chairman of the Federal Reserve.

U.S. house prices have risen by nearly 25 percent over the past two years, noted Bernanke, currently chairman of the president's Council of Economic Advisers, in testimony to Congress's Joint Economic Committee. But these increases, he said, "largely reflect strong economic fundamentals," such as strong growth in jobs, incomes and the number of new households.

Thursday, October 27, 2005

This after high profile commentators such as Krugman and Shiller, and the Economist magazine, were warning about the bubble.

Greenspan and Bernake weren't caught off by the housing bubble - they willfully ignored it.; August 31, 2008 5:53 AM
Anonymous said...: Mike Shedlock ("Mish") has an interesting comment at the very end of a recent gloomy post about conditions in the UK.

Out of the blue, he makes a warning to VANCOUVER about the housing meltdown that is to come.

Quite interesting!; August 31, 2008 8:35 AM
depresso said...: Mish mentioned Vancouver in several posts before. Ever since Shiller said that "Vancouver is the most bubbly city in the world." That was in 2005!; August 31, 2008 9:35 AM
tulip-Mania2 said...: Schnorrer said:
“And also, you still didn't answer the question:

Who do you consider to be Greenspan's "company"?”

I said :
"Greenspan and company should go to prison"
And I still think so. The charges:

Economic Blunders of Mass Destruction, and Crimes Against the Economy.

“Who is Greenspan’s company?”
Mostly other Central Bankers and their masters- the politicians.

As for me stroking my own ego, I never made the claim,( as you accuse me) to be smarter than Greenspan.

All I said is that any student of econ101 would know what to expect if you opt to take monetary policy to its “irrational" max.

Clearly Easyspoon knew what he was doing; I don’t question his intelligence, just his morals.; August 31, 2008 10:09 AM
DonkeyXote said...: Central bankers have to walk a tightrope. They are supposed to be unpoliticized, but they are appointed by politicians who can either be scum bags, stupid, or both. Step on some politician's toes, and the bank chairman could be toast. Say, for example, that Bush want's low interest rates to help keep the economy looking good and boost his re-election chances. Does he get his wish?

It's not just an American problem. The EU central bank often takes criticizm from Sarkozy and other European politicians about the bank's monitary policy.

...not to make excuses for Greenspan; he could've acted. He knew the consequences. Instead, he waits until he's safely retired before blasting Bush.; August 31, 2008 12:18 PM
patriotz said...: The EU central bank often takes criticizm from Sarkozy and other European politicians about the bank's monitary policy.

The ECB has a statutory mandate to control consumer price inflation. This is its only mandate, put in at the insistence of the Germans.

Sarkozy and others can flap their gums all they want, they are just performing for their domestic audiences. The Euro is basically a vehicle for the Latin members of the EU to take advantage of Germanic discipline, and everyone knows it.; August 31, 2008 1:28 PM
Anonymous said...: Alan Greenspan on crony capitalism in the US
September 24, 2007
www.youtube.com/watch?v=09zvzzCOB2M

Alan Greenspan on his double speak
March 22, 2008
www.youtube.com/watch?v=uzEqrlvwEqs; August 31, 2008 1:29 PM
VancouverGuy said...: I have a great anecdote for everyone.

I was talking to an architect out at a bar a couple of nights ago, and he was telling me that his clients are essentially all developers. He mentioned that he normally had a lot of clients who were investment bankers, but he said a lot of them had pulled out of development. I said, "Maybe because everyone is terrified of losing their job or getting no bonus." He responded that, no, it was because some people were foolishly thinking that the market could actually drop. He said that a lot of his clients were buying into the market right now when prices were "10-15%" lower, and they felt they were just making that profit immediately because the market was being irrational! They were actually treating it as profit in their mind already.

I then told him that I believed that prices were going to drop significantly. He couldn't believe it. He did not think that could actually happen. He said we had the third-best real estate in the world. I told him all about the fundamentals and explained why the market had been behaving irrationally and how this was just a bubble.

This was a very intelligent guy, but he, and a lot of other people, had been fooled by the constant hype about this market. And people are still acting on it! They are going out and buying property "on the cheap" because they believe they will make huge cash when they develop it and flip it.

How many people who became wealthy from the boom will let it bankrupt them as well? And when people go bankrupt who is left holding the tab? The banks.; August 31, 2008 1:57 PM
Schnorrer said...: Tulip said:
"Mostly other Central Bankers and their masters- the politicians."

Got news for you -- who elects the politicians in a democratic country? The people.

Who bought houses at stupid prices? The people.

Its natural to want to blame others for our own mistakes, but we have only ourselves to blame for this mess.

Sad but true.; August 31, 2008 4:47 PM
Maggie Chipman said...: I guess at some point we will have to ask if the experts/whores/pimps, were lying to us, or if they are plain old incompetent; August 31, 2008 5:19 PM
VancouverGuy said...: Not providing education on asset pricing or economics to the general populace when they have access to massive amounts of credit so they can leverage their uninformed decisions allows for real estate asset bubbles. Who provided all the credit?

Well, real estate lenders were just stupid as all hell. In simple terms, real estate lenders look at two metrics:

1. Loan to current market value of the home.

2. The ability of the person taking out the loan to pay the mortgage.

You know what they're missing from the credit analysis? An analysis of the ability of the property to pay the damn loan by itself. Ever heard of debt-service cover ratio? How about Debt/EBITDA of the asset? No? That's because mortgage lenders never seemed to have learned anything from their corporate counterparts...

But hey, that's the fault of the lenders themselves, and there's no regulation that would prevent that. Maybe lenders won't be so stupid this next time around. Maybe they'll apply appropriate corporate credit metrics to mortgage loans.; August 31, 2008 5:36 PM
hammy said...: schnorrer,

Thanks for the link. I used to figure buying is better in the long run, but apparently my rental apartment is better rented unless it appreciates at 6% *every year for 3o years*. Oh yeah, and that ignores the fact that somehow I'll have to live with a 3k/month mortgage on one income.; August 31, 2008 7:15 PM
Drachen said...: Vancouverguy

"1. Loan to current market value of the home.

2. The ability of the person taking out the loan to pay the mortgage."

You have it all wrong. There was only one metric in play when all these "bad" decisions were made.

1. Bonus incentives for executives if they loan out 50% more money than last year.

As you can guess, the people really making the decisions are not hurting right now. Three of the biggest and hardest hit banks in the US which lost billions of dollars gave out nearly 100 million in incentives to their CEOs in the same year they were taking record write downs.; August 31, 2008 10:53 PM
Anonymous said...: Paul,

According to MP Garth Turner, Vancouver SFH sales are DOWN 73%.

Is this accurate?; September 1, 2008 9:41 AM
VancouverGuy said...: Drachen,

You are right that people essentially just fudged stuff. I'm saying that even honest lenders aren't looking at the right figures at the moment.

What will happen when people who have overpaid for their homes try to get a new mortgage in three years and they are only offered 90% LTV?; September 1, 2008 11:42 AM
patriotz said...: CMHC insurance is valid for the full amortization period of the outstanding loan balance, so the banks don't care if the house is underwater at renewal time.

The last thing they want to do is force a foreclosure when they're guaranteed to get their money back anyway. Just let the homedebtor keep paying that interest.; September 1, 2008 11:56 AM
Anonymous said...: Hahahahaha, all this talk about whether Greenspan was oblivious or just willfully ignored the bubble. The man was head of the central bank that controls monetary policy for the richest nation on earth. Even if he was a moron, one would suppose he would have enough money to hire smart advisor's.

All of this is IRRELEVANT. The piece of the puzzle that no one ever brings up is: who owns the federal reserve? The people of the United States? hahaha no! Its a privately owned company, try to look it up in the pink government agency directory in the yellow pages, it won't be there.

The next part of the puzzle that never gets acknowledged is: If the Fed is a privately owned company, how does it make profit? Lets see, it prints money, well actually creates money with a few clicks on their computer and lends it to the people and expects to be paid back what was loaned + interest. God himself wouldn't be able to create a better product to make money on.; September 1, 2008 12:48 PM
Schnorrer said...: I have watched curiously over the past year as patriotz saved his most viscious rhetoric against Alan Greenspan.

Then Tulip, on this blog, starting stating that "Greenspan and company should go to prison". Cue patriotz jumping along the bandwagon.

Hmmmm... its interesting that we don't lay any responsibility on people who bought and sold homes at outrageous prices, people in various industries who were propping up the market, and we give little flak the politicians whom WE elected to run our countries.

No... patriotz and tulip seemed to focus disproportionately on Greenspan and Greenspan's "company".

Hmmm... I wonder what motivates them to say things like that...

But then, I ran accross this post by patriotz on the Vancouver Condo Info blog:

-------------------
#
53
patriotz Says:
August 29th, 2008 at 10:51 pm
Vancouver is much more desireable than Manhattan.

Then how come rents in Manhatten are more than twice as much as in Vancouver?

Hint: the “j” word.
--------------------------------

Thank you patriotz. Your misplaced anger makes sense to me now.

Its interesting: Robert Shiller, who accurately predicted the housing bubble (and the dot com bubble) before most others has been predicting that the next "bubble" to develop will be an increase in intolerance (xenophobia, etc).

We saw how that played out in Germany in the last century, as Germans used various xenophobic and other intolerances to vent out their frustrations over their economic problems.

I see, that some ways of thinking always remain tempting.

I sincerely hope that we do not let this way of thinking pervade again. We cannot let it happen.

Its going to get ugly for us economically. Let's take responsibility upon ourselves as a society, and try to pick up the pieces. Lets maintain our ethical standards and treat our minority groups (immigrants, LGBT, religious minorities - everyone) with the respect that we all deserve.

We are all in this together.; September 1, 2008 1:06 PM
Anonymous said...: To Paul. Thanks to you and your website, plus other bloggers in the Vancovuer housing market, I was able to see the writing on the wall and cash out of my downtown condo for a $70,000 profit. Now I have my downpayment for when housing drop. If I had stayed in I don't know how much I would have lost. Thanks.; September 1, 2008 1:41 PM
G said...: That is great that you cashed out and didn't think about "losses" from the peak instead of profit overall...

Here is a post from a realtor on Rob's blog:

"I have 2 clients that have decided to pull their properties off the market and rent them out. They are both not willing to take the “loss” since the peak and both of them are unable to recognize the significant gains made since purchasing. Both are looking at their properties as rental cashflow positive because of the amount the properties were purchased for originally.

I told both clients that I feel we’re close to getting their properties sold. But both had the same response, that they don’t want to sell at the reduced listing prices, that there is too much “loss”."; September 1, 2008 2:09 PM
k9dr said...: I think I actually hit the peak (luck, not timing the market). The scary part was that 2/3rds of my floor had changed hands in the 3 months before I sold, and even the super was trying to sell their place. Within two blocks of my condo on Granville and Hamilton were 5 new buildings. From my window I could see that many of the surrounding buildings were dark 24/7. Including one building that I estimated was 30% empty. Maybe they were all at the starbucks in the bottom of the building but I doubt it. These are new buildings. What are these owners going to do if the prices don't keep going up; September 1, 2008 2:24 PM
VancouverGuy said...: If we do like August and drop sales by 54% relative to 2007 for September, we get a total of 1,277 sales. With approximately 20,000 units of inventory if inventory does not drop, we end up with 15.6 months of inventory.

Pretty damn amazing. Let's see how that gets reported in the papers.; September 1, 2008 7:38 PM
Anonymous said...: "From my window I could see that many of the surrounding buildings were dark 24/7."

This is quite common since the 90's with absentees residents keeping a local address for various purposes (legal & personal). A few of these buildings that I knew had their units (both occupied and unoccupied) broken into during the days - unit doors cut of with saws, ground floor (common area) glass panels removed .. etc, luxury cars stolen from underground parking ...etc - all without the knowledge of the few residents who lived there. No one was ever caught for the crimes.; September 1, 2008 9:18 PM
patriotz said...: Hint: the “j” word.
--------------------------------

Thank you patriotz. Your misplaced anger makes sense to me now.

The j-word is JOBS, you moron. High-paying executive jobs. That's the reason why Manhatten rents are so expensive.

Also, I never suggested Greenspan should face any criminal punishment. I have never seen any evidence that he did anything illegal. I just think he was the worst Fed chairman ever.

I haven't reserved my most "viscious rhetoric" (whatever that is - is that supposed to be vicious or viscous) for AG either - there are plenty of other suspects to share the blame. Go check out the blogs and see for yourself, if you can be bothered.

its interesting that we don't lay any responsibility on people who bought and sold homes at outrageous prices

"We" does not include me. I have stated clearly many times that RE prices are ALWAYS set by the buyers, and without idiot buyers there can be no bubble.

So go take a hike.; September 2, 2008 12:00 AM
Anonymous said...: Unthinkable Happens: Manhattan Apartment Prices Fall

'This Clearly Indicates That the Market Is Not What It Was'

http://www.nysun.com/business/unthinkable-happens-manhattan-apartment-prices/84900/

If it can happen in NY, you can surely bet that it's happening here.; September 2, 2008 9:19 AM
Maggie Chipman said...: "Everybody said that when the Olympics come, we would make a small fortune. But everybody was wrong."

http://www.latimes.com/business/la-fi-olympics22-2008aug22,0,4581747.story; September 2, 2008 2:05 PM
Paul said...: FV:10722
New Listings 70
Price Changes 138
Sold Listings 50; September 2, 2008 6:08 PM
freako said...: That is fairly large number of FV expireds. About 8 percent. Probably something similar for GV.; September 2, 2008 8:36 PM
pmalm said...: 20K is going to be a horse race. Thanks for the drama, freako and dave.; September 2, 2008 8:46 PM
freako said...: Then Tulip, on this blog, starting stating that "Greenspan and company should go to prison". Cue patriotz jumping along the bandwagon.

Prison, no, but add my vote for the worst Fed chairman EVER.

The j-word misunderstanding was unfortunate, but I can see how it occured, given the semi-cryptic reference combined with AG's Jewish heritage. Patriotz won't win any "Most Charming" awards, but IMHO his "scorn" is leveled with precision, and only at those are worthy recipients.; September 2, 2008 9:11 PM
Anonymous said...: Hey Paul, thanks as always. If you get a second, can you share the details on the SFH that was $295,000? I like that number!; September 2, 2008 10:45 PM
Vansanity said...: ^ Vansanity; September 2, 2008 10:46 PM
Drachen said...: Does anyone have the Dave/Freako bet numbers written down? I seem to remember it was over 1000 listings lower than now by the end of the month (of course in Dave's world the beginning of next month is 'the end of this month'), is that about right?

It's funny, as the numbers turn more and more we hear less and less from Dave. I guess at a certain point even cherry picking information to support his case becomes impossible.; September 3, 2008 12:40 AM
freako said...: 18970 listings end of September.; September 3, 2008 1:37 AM
Paul said...: Hi Vansanity,

That was a 1000 sq. ft. half duplex in Maple Ridge. It should have been labeled as attached.

The lowest house I see sold was a 1200 sf. home in Ladner which went for 425k.; September 3, 2008 8:38 AM
exx said...: Freako, a few threads back I asked the same question and Dave said Oct 1st. So is it end of September or October 1st after expiries? If the latter then Dave might actually have a chance, otherwise fuggedaboutit.; September 3, 2008 9:26 AM
Dave said...: Does anyone have the Dave/Freako bet numbers written down? I seem to remember it was over 1000 listings lower than now by the end of the month (of course in Dave's world the beginning of next month is 'the end of this month'), is that about right?

It's funny, as the numbers turn more and more we hear less and less from Dave. I guess at a certain point even cherry picking information to support his case becomes impossible.

Actually it’s only 200 listings lower. We lost about 800 listings over the month of August.

I am already correct on one assertion that you adamantly disagreed with, which was that listings typically peak in the summer months. In the case of 2008, it looks like listings did indeed peak during the summer.

And yes, that’s how calendars work. Once one month is complete, the next starts.

And what is my case? I predicted a price decrease at a time when prices were still on the upslope. I said 5% this Fall but no more than 10%. I am still predicting a flat market in 09 (likely +/- 5% through the year). So far, the housing market is tracking my predictions.

I think next year will really come down to what is happening in our economy, the level of consumer confidence and the price of oil. If oil follows the trend it has had for the last 4 to 5 years and spikes even higher again in the spring, then I think it will really damage consumer confidence. If the price of oil has indeed broken to the downside, then I think the North American economy will post a recovery in 09 as inflation concerns / risks will subside. If the Fed and BOC decide to fight inflation (i.e. setting higher interest rates), then it will definitely hurt housing.; September 3, 2008 9:33 AM
jesse said...: "Actually it’s only 200 listings lower. We lost about 800 listings over the month of August."

Inventory on August 1 was 19,534. Inventory on September 2 was 19,192. That's about 340, not 800. The bet IIRC was inventory as reported by Paul on the evening of September 30, 2008.

Inventory on August 29 was 20,153.; September 3, 2008 10:19 AM
Dave said...: Inventory on August 1 was 19,534. Inventory on September 2 was 19,192. That's about 340, not 800. The bet IIRC was inventory as reported by Paul on the evening of September 30, 2008.

Inventory on August 29 was 20,153.

The bet was inventory posted on October 1st, which includes the expiries. That was clarified on Day 1.

I assumed August 1st was about 20,000 listings. My mistake.; September 3, 2008 10:27 AM
Drachen said...: Exx

"Dave said Oct 1st. So is it end of September or October 1st after expiries?"

Dave thinks that October 1 is the end of September. He also thinks that real estate is not overpriced, fundamental valuation is a flawed method of investing and predicting markets with technical analysis (known in serious economics circles as "Voodoo Economics", it's functionally equivalent to reading tea leaves) is a pretty smart idea.; September 3, 2008 11:25 AM
Dave said...: Dave thinks that October 1 is the end of September. He also thinks that real estate is not overpriced, fundamental valuation is a flawed method of investing and predicting markets with technical analysis (known in serious economics circles as "Voodoo Economics", it's functionally equivalent to reading tea leaves) is a pretty smart idea.

I think it is a smart idea to consider all types of analysis. Why close your mind?

Let me ask you a question… How many years in the last 40 to 50 years of real estate did prices remain at YOUR definition of fundamental value (i.e. price to rent)? How many years were prices above that level?; September 3, 2008 11:46 AM
Drachen said...: Dave

"In the case of 2008, it looks like listings did indeed peak during the summer."

This is typical of your sloppy analysis. The graph has gone from upwards to flat (two months after you called peak by the way) and you're calling it the peak now, even though there has been no sign that listings are going down, they even rose somewhat towards the end of August.

Also, I didn't "adamantly disagree" I just said you didn't have any evidence to back up your case (if you can't figure out the difference there's big buildings called "schools" that teach these sorts of things).

One more thing I should point out (because you obviously can't see even the plainest facts that disagree with your case). We did not lose 800, or even 340 listings over the month of August, the end of August and the end of July were nearly identical, only in the expired listings at the end of the month did we drop those listings.; September 3, 2008 11:47 AM
exx said...: Hah.. well nice to see that you guys made a bet yet aren't in agreement on the details.; September 3, 2008 2:53 PM
Drachen said...: Exx

Dave agreed on the end of September, he just says that October 1 is the end of September.

It's typical of his semantic style of debate.; September 3, 2008 3:33 PM
Dave said...: Hah.. well nice to see that you guys made a bet yet aren't in agreement on the details.

We did agree on October 1st.; September 3, 2008 3:48 PM
tulip-Mania2 said...: “Then Tulip, on this blog, starting stating that "Greenspan and company should go to prison". Cue patriotz jumping along the bandwagon.

Prison, no, but add my vote for the worst Fed chairman EVER.”

Freako: Please be reminded of the crimes:

The charges:

Economic Blunders of Mass Destruction, and Crimes Against the Economy.

But my heartstrings can be pulled for the senile old fart, and so my suggestion of long ago, how about a public flogging at the opening ceremonies of 2010, of the local usual suspects and a special encore of say just 1 symbolic lash for Greenspan?

If he refuses the above punishment, how about 5 consecutive summer vacations with SATV and Dave?; September 3, 2008 5:15 PM
exx said...: Dave said...

My bet with Freako is for the end of September, so we still have two months to go.

August 1, 2008 3:32 PM

Uh... Dave... I don't know what planet you're on, but the end of September isn't in October. Is the end of today tomorrow? Would that make the beginning of tomorrow today? Drachen, you're not kidding...; September 3, 2008 6:58 PM
Paul said...: Nice news report on CTV tonight :0 This is getting ugly. If we do in fact go YOY negative in detached next month that will be a grizzly headline.
FV:10773
New Listings 130
Price Changes 80
Sold Listings 47; September 3, 2008 7:16 PM
Anonymous said...: Here is the bet details

Dave said...

Back to the original question (that you skirted somewhat): Is this year typical?

I said no to that already. It is not typical for the last 5 years.

Do you expect listings to fall in July/August?

I can't pick an exact month. Nobody can.

I would expect listings to be lower than today within three months (i.e. by the end of September). Bets?

June 23, 2008 1:41 PM
Blogger freako said...

I would expect listings to be lower than today within three months (i.e. by the end of September). Bets?

You are on.

June 23, 2008 1:42 PM; September 3, 2008 7:39 PM
Paul said...: So whats at stake between these two? At least a naked streak across lions gate.; September 3, 2008 7:42 PM
fish10 said...: I'm back:

http://fishre.blogspot.com; September 3, 2008 7:53 PM
jesse said...: Dave said:
"You aren't spotting me anything. I said, 'end of September'. Last time I checked that month includes September 30th." - June 23, 2008 7:42 PM

Good. So we check 12:00am sharp, October 1st, 2008. Set your watch by the old clock tower bell. Contract law is wonderful. In fact freako explicitly offered to spot dave expected cancellations on the extra day but was refused and the offer was withdrawn.; September 3, 2008 8:32 PM
jesse said...: dave: "So far, the housing market is tracking my predictions.

From the same post as the bet, dave made a bold prediction:
"I think prices will be stable the rest of the summer with a likely decrease in price over the Fall. I am calling for no more than 5%, or about 0.5 to 1% drop per month." - June 26, 2008 4:35 PM

Stable prices in the summer. How exactly is that "tracking your predictions"? Oh right, wrong predictions -- sorry.

pwnage.; September 3, 2008 8:44 PM
Dave said...: Jesse, my prediction referred to the numbers that would be posted on October 1st, not on September 30th. My prediction included the cancellations. If you read through the prior posts, you will see I have been consistent on this point.

Jesse, I agree on the contractual law part. Many contracts go to the end of September (i.e midnight). Those are therefore removed on the search done as of October 1st. Doing a search at midnight will not capture these cancellations as it takes time for it to show up in the numbers that Paul posts.

Paul, our bet was a 'gentleman's bet'. Surely 'gentleman' don't streak across the Lion's Gate. In any case, it wouldn't be fair considering that I am a fast runner. Not only that, we only have to drop 200 listings this month in order for me to be correct. This explains the recent posts by my detractors concerned about the exact dates for which the bet was made.; September 3, 2008 9:12 PM
Strataman said...: Hi Paul! Thanks for the numbers I predict we'll break 21000 by the month end. And that goes foor Dave too 12:01 AM Oct 1st the last stats out at exactly that time will be over 21000 anything posted a minute or more later is of no consequence! Yeas! Contract Law good point!; September 3, 2008 9:16 PM
Anonymous said...: "So we check 12:00am sharp, October 1st, 2008."

I've got some bad news for you, 12:00 a.m. sharp October 1st is the same thing as 24:00 September 30, 2008. I'm a lawyer and I just learned that lesson the hard way. Contracts are dated 12:01 a.m. to avoid the problem.; September 3, 2008 9:17 PM
Dave said...: Thanks for the input Anon. That's why I was clear within 5 minutes of making the bet as to which day I was referring to. I wanted to avoid this discussion to begin with. However, some would believe I was acting in bad faith after I was perfectly clear on my dates.

In any case, who cares about the 200 listings? If the total is 200 higher than 18970, my prediction will still have been closer than any of my detractors who were saying the upward trend would continue above 21k+. In such a case it would not be a strict technical victory, but a moral one.; September 3, 2008 9:27 PM
freako said...: In such a case it would not be a strict technical victory, but a moral one.

But does a moral victory mean anything to a shifty slime bucket such as yourself?

Jesse is right. I offered to spot you the extra day you tried to weasel, but you refused. Will it come to that? Dunno. I think sales will decline further, and we will have a healthy pile of listings. Furthermore, perhaps fewer expirations.; September 3, 2008 9:34 PM
freako said...: If the total is 200 higher than 18970, my prediction will still have been closer than any of my detractors

Ah, but as Jesse states, a much more meaningful prediction (prices)of years went to sh*t already. Summer prices did go down, and we are nudging up to your 5% cap already.; September 3, 2008 9:38 PM
jesse said...: This post has been removed by the author.; September 3, 2008 9:39 PM
jesse said...: "Contracts are dated 12:01 a.m. to avoid the problem."

Well that's good to know. In the case of this bet it doesn't make one bit of difference. Make it for 11pm September 30 or 1am October 1, you'll get the same number. But in principle it's good to run these things by lawyers first. 12:01 am October 1, 2008 it is then. Enjoy the extra minute!; September 3, 2008 9:40 PM
Dave said...: But does a moral victory mean anything to a shifty slime bucket such as yourself?

Jesse is right. I offered to spot you the extra day you tried to weasel, but you refused. Will it come to that? Dunno. I think sales will decline further, and we will have a healthy pile of listings. Furthermore, perhaps fewer expirations.

Why the hate? I expected more from you. Anyways, I was open to having a fun bet, with some stake relating to pride, but my interest in that is now gone.

No, you weren't spotting me anything. I was clear as to what day I was referring to before you made an 'offer'. I said we would compare that to the numbers Paul posted on October 1st. You even quoted my clarification before making any 'offer'.

If Paul were to do a search at 12:01 am October 1st, it would not catch the expiries. The computer system takes time to capture the numbers.

Freako, I was DEAD CLEAR on this point. That's why I clarified it within minutes of the original post. Don't go and claim I am acting in bad faith.

I can only surmise you are bringing this up out of the fear that I am going to be correct.; September 3, 2008 9:48 PM
jesse said...: "Doing a search at midnight will not capture these cancellations as it takes time for it to show up in the numbers that Paul posts."

Ah so listings canceled some time during the day of October 1st were actually dead men walking at the end of September. If so you should not count the ones listed on October 1st as well.

You made a good call about listings flattening out over the summer.; September 3, 2008 9:49 PM
jesse said...: "Freako, I was DEAD CLEAR on this point. "

Were you? Citation please.; September 3, 2008 9:51 PM
freako said...: More gold from the original "bet" post:

Dave on MOI:

I think MOI will stay in the 6 or 7range for the rest of the year and maybe dip towards 8.

Looks like your extreme came up 50% short. Perhaps your detractors are onto something? Do you still consider it a balanced market?

My post to anonymous who thought calling Dave on the "September 30 is October 1" shenanigans was a case of "semantics"

Semantics? If you have a job interview on the last day of September, do you show up on October 1, and then bitch about semantics when shown the door?

Finally, the very funny Dave Dictionary:

Slow decline: a price drop of 24% or less in one year
Typically: Once.
Always: Twice.
Never: Not for 5 years; September 3, 2008 10:02 PM
Dave said...: Were you? Citation please.

DaveI would expect listings to be lower than today within three months (i.e. by the end of September). Bets?
FreakoYou are on.
DaveOK, we will go off Pauls' June 23rd numbers which he will hopefully post today. We'll compare that to listings as of October 1st, 2008.
FreakoDave, this isn't rocket science. Obviously September 30 numbers are released on October 1.; September 3, 2008 10:05 PM
freako said...: Why the hate? I expected more from you.

You also expected MOI in the 6-7 range. It's not hate, just reality. There is zero good faith in your behavior. I don't really care about the stupid bet, but just look at yourself trying to explain why the end of September includes October 1st. You are reaching so hard that is tragic.; September 3, 2008 10:08 PM
Dave said...: Ah so listings canceled some time during the day of October 1st were actually dead men walking at the end of September. If so you should not count the ones listed on October 1st as well.

One could do that as well, but it wasn't what I was referring to. Rather, I simply was referencing the numbers Paul posts on the first day of each month. You can also go to other blog sites and they will post different inventory numbers than what Paul comes up with.; September 3, 2008 10:10 PM
freako said...: FreakoDave, this isn't rocket science. Obviously September 30 numbers are released on October 1.

Ok, Dave you got me there. For some reason when I wrote that, I mentally lapsed and for some reason thought that Paul released numbers one day later (he doesn't, they come late in the evening).

Obviously Paul's September 30 numbers are the ones that represent the listings at the end of September. The board stops adding listings in the evening. A second ago, you were musing about a moral victory, not a technical one if you were to lose. Yet you try very hard to achieve the inverse.; September 3, 2008 10:14 PM
freako said...: You can also go to other blog sites and they will post different inventory numbers than what Paul comes up with.

What are you talking about? Paul posts REBGV numbers, and they are DEAD on. Chipman? He creates his own "area".; September 3, 2008 10:16 PM
Drachen said...: Dave

"Not only that, we only have to drop 200 listings this month in order for me to be correct."

*ahem* 300 now, and rising like a rocket :)

"my prediction will still have been closer than any of my detractors who were saying the upward trend would continue above 21k+."

Umm, as usual Dave, making stuff up to support your argument is juvenile. I never said that, I certainly don't think Freako or any of the others said that, you're gonna have to source that one. Straw men are for fools to slay.

I like how you don't even bother trying to defend your crap any more after I shoot it full of holes. You've recognized that your BS is called for what it is and you just move on to the next pile to shovel.

I have to say in all my years of getting in various silly debates online I've never met anyone so disingenuous as yourself. Either you have some serious kind of mental disorder where you can string rational seeming ideas together without being able to understand genuinely rational ideas or (and Occam's razor tells me that this is more likely) you are simply lying to us.; September 3, 2008 10:26 PM
jesse said...: Sorry I'm not sure that's "DEAD CLEAR". October 1 has 24 hours and no time was specified. Since the time is ambiguous we must revert to your earlier statement "by the end of September", which, according to resident lawyers, is a full 1 minute after 12 am October 1, 2008.

If you said "as posted on October 1, 2008" you might have a case. freako's statement I don't think constitutes an understanding of contract, more a statement of perceived fact, which happens to be incorrect. Paul posts the full September 30 numbers the evening of September 30 because MLS typically shuts down before midnight and the database does not change until the next morning. But IANAL.; September 3, 2008 10:29 PM
freako said...: freako's statement I don't think constitutes an understanding of contract, more a statement of perceived fact, which happens to be incorrect.

Yes, that is exactly what it was. I was trying to make the point it is the relevant date that matters, not the date that numbers are RELEASED. I thought he meant Sep 30 numbers that are made available the next day, October 1. My mental lapse. Don't waste more time bantering with this disingenious individual.; September 3, 2008 10:43 PM
Anonymous said...: C'mon Dave. It's not even going to be close enough to whine about moral or techical victories.

After a month of 53% declines in sales and other unfathomable stats, do you really think there is a chance of an upside like what you're calling for at this point? No one knows how bad it's going to get and it's certainly not going to be good.

Vancouverites were so stupid about real estate for much too long. That's the cause. Look around hard. Jobs, lifestyles, assets: How could any sensible person be surprised?

Chico; September 3, 2008 10:49 PM
patriotz said...: How many years in the last 40 to 50 years of real estate did prices remain at YOUR definition of fundamental value (i.e. price to rent)? How many years were prices above that level?

Prior to the early 70's, prices were at or below fundamental value almost all the time.

After that, only about 10% of the time.

But you're missing the point. What matters is not how much of the time prices are at or below fundamental value, but that prices always eventually revert to fundamental value.

Get it, Dave?; September 3, 2008 11:36 PM
patriotz said...: BTW price/rent is not a definition of fundamental value, it's just an indicator.

Fundamental value is defined as the present value of future income (i.e. net rent in the case of RE).

Since asset prices always adjust to fundamental value, comparing present to historical P/E gives an indication of how close price is to value.; September 3, 2008 11:41 PM
Lesser Ape said...: The fact is that with a week to go in June, Dave bet that in 3 months, inventory would be lower. That got turned into "the end of September".

Then Dave realized that he could pretend that the end of September was actually the beginning of October, he'd get 3 months of listings, but 4 months of month-end expiries. So, right away, he changed the terms of the deal to October. I guess he wasn't so confident of his prediction, and wanted to hedge as much as he could.

That said, I don't think anyone can complain about the unfair terms. Dave did deviate from his original terms, but everyone else agreed to it, and didn't even try for what was reasonable, just because they were so over confident that they'd win even with the unfair endpoint.

It's good that Dave manipulated the terms in his own favour, though, because it makes the bet much more interesting. Dave would be completely dead in the water if his original statement was the real terms of the bet.; September 3, 2008 11:43 PM
freako said...: Get it, Dave?

Highly unlikely. The direction versus magnitude trips them up every time.

Dave would argue that thermostats are useless because the temperature is very rarely at exact value you set it to.

It's good that Dave manipulated the terms in his own favour, though, because it makes the bet much more interesting.

Yeah, that was pretty slick. Which makes his recent "a moral victory if not a technical one" comment more than a little trite.

Yes, some of us were a little too sure about continued inventory growth, but how can he with a straight face claim "victory" of any kind over his detractors when his other predictions (price, MOI, balanced market) when to sh*t.; September 4, 2008 12:14 AM
jesse said...: freako: "My mental lapse."

It doesn't matter. Your statement was incorrect and not part of the contract, unless it was explicitly agreed that listings canceled the day AFTER the end of September were in effect canceled BEFORE the end of September, as seen by checking the MLS database.

Dave's other argument is that we must include and infer the individual listing contracts' expire dates, if stated as "end of September" or whatever but are de-listed from the database the next day. The bet was to compare listings on Paul's numbers on October 1, not parse the intent of the individual listings that happen to expire later vis a vis the actual database.

It would also be necessary to view each contract individually to see if the active period before expiry included ANY part of October as that would violate the "end of September" part of the bet. Even if this were relevant, it would be impossible to measure without sifting through all the expired contracts.

It's pretty bloody relevant to everyone here to see what kind of nasty tricks can be played with contracts, including purchase agreements and presales, if you aren't careful. Above all, don't rely on blogs and forums to form the basis for legal advice.; September 4, 2008 6:55 AM
jesse said...: When I mean "nasty tricks" it is not inferring maliciousness. It could well be misunderstanding but heck if you can't be clear we have to muddle through the statements and get technical, not moral. Be warned this type of disagreement puts lawyers in the West Side SFHs so many of the readers here are so eager to purchase down the road.; September 4, 2008 6:59 AM
Anonymous said...: Nobody has mentioned the Sun headlines today.

"Buyers See Hope As Home Prices Decline". They have one of those Case-Shiller type graphs with $921K as the top in Feb.08 and $808K in Aug.08. Hard for anyone to ignore.

Just like was predicted, though, by the time MSM reports this, it's old news.; September 4, 2008 7:18 AM
Dave said...: What are you talking about? Paul posts REBGV numbers, and they are DEAD on. Chipman? He creates his own "area".

That's exactly what I am talking about. Different bloggers use different search terms. The numbers are slightly different depending on the method used for the search.

That's why I was clear in referring to Paul's numbers. We are posting on his site and he posts the numbers each day. I was IMMEDIATELY clear on the specific dates and it was clear what numbers I was referring to (again within 5 minutes).

You had your opportunity to disagree and you willingly admit that you agreed to the dates. Call it a mental lapse or whatever you want, but your prior statement can only be construed by me as an agreement.

Calling me disingenuous or manipulative is petty at best.; September 4, 2008 7:30 AM
Dave said...: It doesn't matter. Your statement was incorrect and not part of the contract, unless it was explicitly agreed that listings canceled the day AFTER the end of September were in effect canceled BEFORE the end of September, as seen by checking the MLS database.

Jesse, this wasn't a legal contract. You are getting too technical on the details.

I picked the dates and I was clear on this point. The terms were agreed to and nobody took exception at that time.

If the terms were not clear, then the opportunity existed at that time to clarify them. But, Freako responded by saying these terms were 'obvious'. Why this makes me the person being disingenuous is strange at best.; September 4, 2008 7:34 AM
Dave said...: Prior to the early 70's, prices were at or below fundamental value almost all the time.

After that, only about 10% of the time.

But you're missing the point. What matters is not how much of the time prices are at or below fundamental value, but that prices always eventually revert to fundamental value.

Get it, Dave?

So up until 40 years ago, 'fundamental valuation' was only useful in predicting prices 10% of the time. So clearly, this isn't a very useful method for predicting the market 90% of the time. I would argue that these prices should be referred to as fundamental at all. Perhaps a better term would be 'bottom valuation'.

That's why one should also consider using other valuation metrics such as technical analysis.; September 4, 2008 7:38 AM
Dave said...: Dave "my prediction will still have been closer than any of my detractors who were saying the upward trend would continue above 21k+."

Drachen Umm, as usual Dave, making stuff up to support your argument is juvenile. I never said that, I certainly don't think Freako or any of the others said that, you're gonna have to source that one. Straw men are for fools to slay.

Dave Really? You never said that?

Here is your quote, Drachen "C) For what it's worth, I concede the point. I wasn't the one to bring it up but I shouldn't have jumped in, 100-200 listings is not going to make Dave's case for him, more than likely September will see inventory thousands of units above current levels."

You said thousands of units above current levels. That makes at least 21k.

Mohican made a similar comment in that thread and said 21 to 22k.

Not only that, you conceded at that time that the dates were agreed upon. Yet, you are now backtracking and accusing me of being disingenuous.

Who's being disingenuous now?; September 4, 2008 7:51 AM
Anonymous said...: Dave we are on Paul's blog. Posting under an entry that has a graph on it that shows the end of the month inventory. That is what everyone here accepts as the end of the month inventory, EXCEPT YOU!!!!.
Your statement “end of September (October 1st)” is ambiguous. Any ambiguity in a contract is decided against the contract writer. You wrote the contract. IBID.; September 4, 2008 7:57 AM
jesse said...: "I picked the dates and I was clear on this point. The terms were agreed to and nobody took exception at that time."

You were clear? On the date yes on the time no. Fail. Maybe in your own eyes you knew what you meant but the words are definitely ambiguous. Your intent is irrelevant.

"If the terms were not clear, then the opportunity existed at that time to clarify them."

Oh I think we can all agree to that. Problem is you come out on the losing end if they aren't clarified. I'm not trying to manipulate anything. What was written was written and it's obvious, to most I think, that your intent was not clearly stated, on purpose or not. Regardless, it seems to have backfired on you, despite your apparent best efforts.

I'm getting technical? Fine but I wish you luck in future contract negotiations. Good faith means nothing if the words don't match.; September 4, 2008 8:16 AM
Anonymous said...: Dave this is your calrification of the end of the month.

Dave said...

If you look it up in a calendar I think you'll find that October first is actually in October, not September. Which is to say it is "after" September, not "the end of" September.

The end of September includes the last day of the month. We won't know what happened that day until the next day, hence the reason for using the numbers released on October 1st.

Good thing I clarified the dates now. God knows how you people would try to spin it.

June 23, 2008 4:37 PM

From that it sounds like you are to include the activity of the last day of September, not the activity on the first day of October. That is what I believe Freako agreed to.; September 4, 2008 8:21 AM
Dave said...: Anon, I suppose one could ignore the new listings and new sales on October 1st to capture the end of month cancellations for September.

Although not my original intent, this is still something I would find agreeable. Again, I picked October 1st for a reason, which is that it removes the expired listings. Those listings could technically be purchased up to midnight on September 30th.; September 4, 2008 8:38 AM
freako said...: The numbers are slightly different depending on the method used for the search.

Yeah, the same way the population of Greater Vancouver is different from the population of of Fraser Valley.

What is your point? We were talking about inventory in GV as tracked by Paul. There is nothing gray or fuzzy about that. Nice try.

Calling me disingenuous or manipulative is petty at best.

Come on dog, you just tried another fast one above, trying to insert fuzziness into black and white criteria.; September 4, 2008 9:04 AM
freako said...: Again, I picked October 1st for a reason, which is that it removes the expired listings.

If your intent is to prove that listings have been dropping shouldn't we be comparing apples to apples the, the 1st to the 1st. Or the 30th to the 30th?; September 4, 2008 9:06 AM
Dave said...: There is nothing gray or fuzzy about that. Nice try.

What in the world are you trying to communicate here? We both agree that Paul's numbers are the ones to use.

Come on dog, you just tried another fast one above, trying to insert fuzziness into black and white criteria.

Another fast one? I just offered a compromise which only adds more listings than what you had originally AGREED to. Paranoid much?; September 4, 2008 9:17 AM
Anonymous said...: The point is not your intent it is what Freko thought was the intent. This is different. He clearly thought that expires happen after month end, not before. You actually agree on this point so you want to include them by extending the bet to Oct 1. Freko only agreed to include all activity performed by the booard up to the end of the month. He never agreed to include any activity performed after the end of the month unless that is simply posting the end of the month inventory on the next day.
You clearly are arguing in bad faith as you are not accepting Paul's numbers on the graph as the end of the month numbers.; September 4, 2008 9:23 AM
Dave said...: You clearly are arguing in bad faith as you are not accepting Paul's numbers on the graph as the end of the month numbers.

Back to law school Anon. The dates were specified and the dates were agreed upon. End of discussion.

In no way was I acting in bad faith. I was explicity clear on the numbers and on the dates.; September 4, 2008 9:29 AM
jesse said...: "In no way was I acting in bad faith. I was explicity clear on the numbers and on the dates."

Again, you were clear on the numbers and the dates but not the time. Your ambiguity seems to be a result of either your inability to properly state things clearly or a deliberate attempt at obfuscation. I'll take you at your word it's not the latter reason.

Back to law school? ROTFL! How drole, coming from someone who was just schooled and doesn't even know it.; September 4, 2008 9:40 AM
Anonymous said...: And I say once again
Your statement “end of September (October 1st)” is ambiguous. Any ambiguity in a contract is decided against the contract writer. You wrote the contract. IBID.; September 4, 2008 9:55 AM
Drachen said...: Dave

"You said thousands of units above current levels. That makes at least 21k."

You really are a moron aren't you? You just ignore the phrase "more than likely" to try to spin your straw man argument. There is a world of difference between "more than likely" and "will".

"Not only that, you conceded at that time that the dates were agreed upon."

Conceding and agreeing that you were right are again, two completely separate concepts. Conceding is not saying you were right, it's merely my way of saying, "If you want to be that petty about things and argue every little iota it's just not worth my time." Perhaps you should invest in a dictionary before we continue, there seem to be a lot of words going over your head here.

"Who's being disingenuous now?"

Dictionary. Look up "disingenuous". There's a picture of you if the text doesn't clear it up. That word doesn't even come close to describing my behaviour here, and I don't even see how someone as deluded as you could be correctly applying that word to me.; September 4, 2008 9:55 AM
Dave said...: Any ambiguity in a contract is decided against the contract writer. You wrote the contract. IBID.

Anon, there is no ambiguity here. The dates were clear as you rightly admit.

The specific time in question is also clear. Obviously, we are using Paul’s number for the bet. Paul posts his numbers in the evening, not at 12:01 am. It was Paul’s numbers that were referred to in selecting the initial baseline. I said, we will use Paul’s number from today as the initial baseline and compare it to those posted on October 1st. There are no other numbers. It would be unreasonable for anybody to assume otherwise.

Intent does not enter into it.; September 4, 2008 10:09 AM
Drachen said...: Dave

"In no way was I acting in bad faith. I was explicity [sic] clear on the numbers and on the dates."

And you explicitly and intentionally chose a date that did not accurately reflect a fair comparison. The bet was made on the 26th, we should be comparing the numbers to the 26th of September according to your original statement. But you said "end of September" because you had doubts and wanted the expires and a biased comparison of market strength. You've admitted as much, you desperately need those expires and even then you're now resigned that it will likely be 200 or more over your original bet so you try to sway expectations further by saying even if you're wrong by a few hundred you're still right.

If that isn't disingenuous I do not know what is.; September 4, 2008 10:15 AM
Anonymous said...: If there is no ambiguity then what is everyone talking about?
Sorry there is ambiguity>; September 4, 2008 10:23 AM
jesse said...: "I said, we will use Paul’s number from today as the initial baseline and compare it to those posted on October 1st."

That's not exactly what you said. You said "as of October 1st". Maybe you meant different but the words didn't come out right.; September 4, 2008 10:46 AM
jesse said...: as posted by anon: "We won't know what happened that day until the next day, hence the reason for using the numbers released on October 1st."

That is indeed a good reason to use numbers released on October 1st.

Is being a lawyer always this fun? LOL; September 4, 2008 10:58 AM
tjex said...: Can you people take your arguments somewhere else so we can get back to talking about how badly the real estate market is doing? :P; September 4, 2008 12:50 PM
patriotz said...: So clearly, this isn't a very useful method for predicting the market 90% of the time. I would argue that these prices should be referred to as fundamental at all. Perhaps a better term would be 'bottom valuation'.

It's not a useful method for predicting the market, because you can't predict markets. Fundamental value is a measure of what an asset is worth to the owner if never sold (that's why it's called fundamental), and thus what it is worth to all market participants in aggregate. Which is why price cannot remain above it indefinitely.

I kind of like "bottom valuation" actually because when price falls to fundamental value capital markets stop being Ponzi schemes where an investor's gains depend on the next buyer (greater fool) and gains start being based on earnings. Thus the market gets "fundamental support".; September 4, 2008 1:16 PM
Drachen said...: Patriotz

Dave doesn't understand Fundamental valuation (as should be obvious by his comment).

However calling it "bottom valuation" as he did is just moronic, when he'd just used the fact that prices were well below fundamental values for a long period of time to help build his case that it's not accurate.

Dave, just to clarify, (Freako explained it so a first grader could understand, apparently we need to aim lower for you).

Fundamental valuation does not predict the day to day, week to week or year to year of a market. It is simply a measure of a rational market value. Markets can be irrationally high or irrationally low for decades but eventually they will always return to a correctly calculated fundamental valuation. Often, as we saw in the '80s a market will go way above the fundamental line, dip below and then take off above it again without ever sitting still, this happens when market participants are generally not investing for rational reasons.

Do I need to explain it more for you? Would you like to explain to us how your 'technical analysis' works again?; September 4, 2008 1:32 PM
jesse said...: "I kind of like "bottom valuation" actually because when price falls to fundamental value "

As Drachen mentions, it is possible for valuations to be below fundamental value. CalculatedRisk was just talking about this actually. For example, if credit conditions are temporarily tightened or supply is too high, assets can be cleared for less than fundamental value when hard cash is more important to the sellers than the projected income stream or waiting some time for a better price.

I think Dave's original point was stating that it seems that prices are higher than "fundamental value" the majority of the time. If true (I haven't seen the data) it's a worthy topic for discussion.; September 4, 2008 2:06 PM
Dave said...: The bet was made on the 26th, we should be comparing the numbers to the 26th of September according to your original statement.

Bla, blaa, blaaa.... That was the bet.

If you want to look at other dates, then check out the latest REBGV report. It states, "As of August 31, 2008, active residential listings totalled 17,950 in Greater Vancouver, a 6.2 per cent decline from the 19,138 active listings seen on July 31, 2008."

That matches my original prediction of prices peaking in the summer, from which this whole betting fiasco started.

Whilst I may or may not be correct in my bet with Freako, I was definitely correct in my debate with you.; September 4, 2008 2:34 PM
jesse said...: dave, I think you mean listings peaking in the summer, not prices.

Your call on that looks to possibly be correct or at least close; if nothing else, listings did not explode through July and August as they did in months previous and may not go much higher in September.

Any bets on December prices? Just kidding. ;); September 4, 2008 2:44 PM
Dave said...: Yes, I did mean listings. Thanks.

December prices (MLS HPI) will be 7% down from the March / April 2008 peak and only marginally down year over year (1 to 2%).

And yes, this is a minor departure from my original 5% price correction to the end of year.; September 4, 2008 3:15 PM
Paul said...: FV:10803
New Listings 132
Price Changes 151
Sold Listings 54; September 4, 2008 6:40 PM
tulip-Mania2 said...: Dear Geniuses at CMHC:

How could you be so wrong?

With all your data points, proprietary forecasting models(or maybe they just guess), big fancy computers, bloated salaries:

How could you be so wrong and so often?

The question must be asked, are you RE pumpers, and if so, should you not be deleted from the welfare payroll and be paid by those you serve?; September 4, 2008 7:05 PM
Strataman said...: I'm getting the feeling that this is a big listing day I have a small search area in the Vancouver West area and have 40 new ones! (I usually only get 7 or 8). Whats it lookin like Paul?; September 4, 2008 7:10 PM
observer said...: "As of August 31, 2008, active residential listings totalled 17,950 in Greater Vancouver, a 6.2 per cent decline from the 19,138 active listings seen on July 31, 2008."

This part of the REBGV report isn't seemingly consistent with what data I remember.

Could they have sampled after expired listings were removed in one case, but not the other.

Or another possibility, one of the dates falls on weekend and not the other (so no new listings were processed on one of the dates and not the other).

Or was it simply a case of extreme volatility at the end of the month and I misremembered the numbers.; September 4, 2008 7:41 PM
Anonymous said...: Who cares about your bet,discuss after sept or october 1st

Here is my imformed opinion why the market is going to fall big time---40% and will not rise for a decade.
Yes there are tens of thousands of units built unoccupied,speculators bought and bought and thought(first mistake thinking) that the market would rise through to the olympics,no one believed it would fall in 2008, they were all wrong!
you will all see---3% to 5% drop per month for the next year.

whoever posted that the market will recover slightly in 2009 is off his rocker, I have many freinds licking their chops waiting patiently for prices to drop and drop they will.
My guess is that about the middle of october sellers will panic,and watch for buyers who had nothing down on a 35 or 40 year mortgage walk away.
Hell if they walk away and find a way to get back in for 150.000.00 less.
very few could afford these prices on the long term,the crash BEFORE 2010 ----The trend is your freind.; September 4, 2008 7:54 PM
freako's fan said...: Quote: "You are reaching so hard that is tragic."; September 4, 2008 8:44 PM
Anonymous said...: Shanghai's residential RE prices has come down hard (crashed) - new developments from Y21k per sqM to ¥13k per sqM.; September 4, 2008 8:49 PM
freako said...: , I picked October 1st for a reason, which is that it removes the expired listings.

1. Ok, so you basically admit that you manipulated the situation to get an edge on this bet.

2. I misunderstood what you meant, so I let you "get away with it". Fine, let the stupid bet stand, we will check listings as Paul posts at the end of October 1.

3. How could you muse about a moral victory when you admit that you tried to manipulate the bet to your advantage, and AWAY from the spirit of the bet which was that listings would be down later in the year. Such a bet should start and end on the same day of the month. You could win the bet, and listings could still be higher than when the bet was made.; September 4, 2008 9:28 PM
freako said...: Can you people take your arguments somewhere else so we can get back to talking about how badly the real estate market is doing? :P

Well, lead the way TJ.; September 4, 2008 9:30 PM
freako said...: That matches my original prediction of prices peaking in the summer, from which this whole betting fiasco started.

You make it sound like you nailed the peak and called the decline. Why do we have to keep you honest all the time? Here is what you said in the infamous "bet" thread on June 23:

I think prices will be stable the rest of the summer with a likely decrease in price over the Fall. I am calling for no more than 5%, or about 0.5 to 1% drop per month.

Prices peaked in May, not summer. You called for stable prices (they declined) in summer, but they declined in June, July and August. You called for drops no larger than 1%, yet the August was double that. Still you consider yourself to have called it right. Funny stuff.; September 4, 2008 9:44 PM
freako said...: And yes, this is a minor departure from my original 5% price correction to the end of year.

Let me guess. The first of many "minor departures". What made you change your mind, BTW?; September 4, 2008 9:45 PM
patriotz said...: As Drachen mentions, it is possible for valuations to be below fundamental value.

Well of course. What I meant is when the market price drops to fundamental value the price is being supported by earnings rather than by greater fools. But market price can drop further if buyers are unable or unwilling to estimate or pay fundamental value due to risk or financing issues.

House prices were way below fundamental value during the 30's, due among other things to restricted credit as you mentioned.

As to why house prices have spent so much time above fundamental value since the 70's, I think people just "got stupid" about housing. People failed to realize that the fact that housing was a good investment post-WWII was due to a confluence of factors (rising real wages, increasing labour force participation, wage inflation, interest rate declines post-1982) and just decided that RE had become a "can't-lose" investment.

Well the "can't-lose" investment is starting to lose big time, and maybe people will "get smart" about housing, and go back to buying for the same reason that people bought before the 70's - because it was cheaper than renting. Or maybe there just won't be enough dumb money around for the next generation to inflate house prices.; September 4, 2008 10:01 PM
Drachen said...: Dave's past statements

"I think MOI will stay in the 6 or 7range for the rest of the year and maybe dip towards 8."

"I think prices will be stable the rest of the summer with a likely decrease in price over the Fall."

"I am calling for no more than 5%, or about 0.5 to 1% drop per month."

Now you're calling peak on listings when they haven't started to go down yet, in fact it looks like September might still pass August (certainly if listings continue at the rate of 70 per day)

You're almost as reliable as Stephen Harper.; September 4, 2008 10:41 PM
Dave said...: Prices peaked in May, not summer. You called for stable prices (they declined) in summer, but they declined in June, July and August. You called for drops no larger than 1%, yet the August was double that. Still you consider yourself to have called it right. Funny stuff.

I accidently typed 'prices' instead of 'listings' in the post above. My point above was that I was correct in the prediction of listings peaking in the summer.

I was incorrect that prices would respond so quickly. I think we all were.; September 5, 2008 7:19 AM
Dave said...: Let me guess. The first of many "minor departures". What made you change your mind, BTW?

The price declines started earlier and the rate of declines is higher than I had originally anticipated.

I expected the declines to start in September, rather than June. I expected the rate of the decline to be comparable to the rate of the prior incline, which was approximately 1% per month.

I don't think the magnitude of the decreases will continue through the Fall and I expect it to moderate to around 1% per month. We are currently about 4-5% off on the HPI, so I think we will be down to around 7% off the peak come December.; September 5, 2008 7:26 AM
oh please said...: I think I'll print this discussion off for the next time I have insomnia.

Jeepers.; September 5, 2008 9:39 AM
freako said...: I don't think the magnitude of the decreases will continue through the Fall and I expect it to moderate to around 1% per month.

And why do you think that? You were "surprised" at declines to date. Doesn't that suggest you underestimated negative price pressure?

I expected the rate of the decline to be comparable to the rate of the prior incline, which was approximately 1% per month.

Why would you expect symmetry?; September 5, 2008 9:40 AM
Drachen said...: Dave

"My point above was that I was correct in the prediction of listings peaking in the summer."

Umm, listings have yet to start dropping significantly Dave. There's also 4 months left in the year.

It's like watching a hockey game, score is 2 to 1, the home team scores making it 2 to 2 at the end of the second period. If at that point you say, "yay, home team won!" you are wrong, even if they do win in the end.; September 5, 2008 9:52 AM
Drachen said...: Freako

"Why would you expect symmetry?"

Technical Analysis; September 5, 2008 9:53 AM
Paul said...: FV:10825
New Listings 95
Price Changes 88
Sold Listings 35

Another really low S/L ratio today for REBGV. Not really a surprise as we are dealing with sales from August and the higher listing counts of September. Let's watch the trend.; September 5, 2008 5:46 PM
exx said...: Wow, at this rate we'll be back to 20K by mid-month, MAYBE 21K by the end of the month (though based on Dave's definition, I should specify that 21K would be Sept 30:P). Thanks Paul.; September 5, 2008 9:21 PM
johnnyrent said...: Oops. I thought listings were supposed to decline at this time of year. Granted, we had a plethora of cancellations and terminations at the end of August but listings growth appears to be quite robust for the first week of September.; September 5, 2008 9:38 PM
Maggie Chipman said...: Paul the low s/l ratio is because of the nice weather.

You just wait, the market wiil get white hot again.

CMHC predicted single high digit price increase per well into 2010and beyond, and so did Pastrick.; September 5, 2008 9:45 PM
Paul said...: LOL! Nice posts all you three. Some entertaining posts after god knows how many Freako V. Dave spots.; September 5, 2008 9:47 PM
Anonymous said...: Paul, doesn't Maggie have nice legs?; September 5, 2008 10:26 PM
Vansanity said...: Oh Maggie, lol. CMHC and Pastrick are your sources? LOL. You're in more trouble than I thought.

Yes, the inventory and the sales slump was a seasonal phenomenon! Brilliant! I really hope your not telling your potential clients that nonsense.

Can you spot a trend? Everyone here can, save for you and Dave.

Anon - you're dirty.; September 6, 2008 7:20 AM
Maggie Chipman said...: I agree with Vansity; anon has a dirty mind.

I render a brilliant technical synopsis of the Vancouver market (best real estate on earth) and anon is focused on legs.

Paul : just what kind of an outfit are you running here?

You must also be one of those crazy people who believe Vancouver RE prices are constrained by those silly notions of economics i.e. supply/demand, incomes, earnings growth, populaton& family formation, demographics, all those banal things that apply to Hicksville, not Vancouver (world class city)

And don’t give me the Alberta speech, Alberta doesn’t have Rennie, and Bill Good.; September 6, 2008 9:11 AM
Anonymous said...: "And don’t give me the Alberta speech, Alberta doesn’t have Rennie, and Bill Good."

Too funny, Maggie, your sense of humor seems familiar.

Nonetheless, regardless of your unorthodox methods, your point is well taken.

http://www.edmontonsun.com/News/Alberta/2008/09/04/6656661-sun.html

“It's now 13% and falling. How far has the Alberta housing market got to go before it hits bottom is hard to say.”

And yet:

Edmonton Real Estate Board president Marc Perras is still saying that "strong sales this quarter will support rising prices as we approach year end."; September 6, 2008 10:16 AM
Anonymous said...: Oh Maggie, your oughta keep those typical "world class city" pitches from the readers here and to your clients if you want to save any respect that you might have here.

No one buys that anymore -- maybe last year, but reality is finally sinking in for the majority of people.; September 6, 2008 10:42 AM
alexcanuck said...: Maggie should be a bit less subtle in the sarcasm. Some of the bullisht RE pumpers around are so close to what she said I can understand why someone could gloss over her statement and think she (if she is a she, nice legs and all but I've seen all kinds) is serious. Or is she?
Help me out here, Maggie, it's so hard to tell!; September 6, 2008 3:46 PM
jesse said...: Sarcastic? No no you have it all wrong. Read the quotes from Muir, Pastrick, Adamache, and Sommerville out loud in a sarcastic tone and it all makes sense.; September 6, 2008 8:07 PM
Anonymous said...: "Actually it’s only 200 listings lower. We lost about 800 listings over the month of August."

Dave,

Paul b numbers are fake,hand made because the official rebgv statement from dave watt in the vancouver shows inventory at 17,000.suspect do things when number does not get update constently then down comes up when the screen open for new show what a movie i never seen at any time there was no day end of last month when inventory show 17,000.; September 6, 2008 8:20 PM
anne said...: Thank you again for the numbers, Paul.; September 6, 2008 8:44 PM
Maggie Chipman said...: "Sarcastic? No no you have it all wrong. Read the quotes from Muir, Pastrick, Adamache, and Sommerville out loud in a sarcastic tone and it all makes sense."

Jesse: you forgot to add my other heroes/pumpers to the list:

Gregory Klump, Kelvin Neufeld, Bob Dugan, Carol Frketich, Tony Joe, Don Campbell,; September 7, 2008 9:37 AM
VancouverGuy said...: Just got back from a long business trip and damn was I amazed at the price changes. I added all the percentage changes by month relative to May onward for August at pissmeoffvancouver.blogspot.com again. Things look absolutely horrific.; September 7, 2008 4:13 PM
Paul said...: FYI- I had an exceptionally busy open yesterday at a house in Edgemont Village. 32 Groups came through. Much better than the 2 groups that came by my last condo open...; September 8, 2008 7:25 AM
oh please said...: Paul - cool, as much as I want to see a crash we all need you to stay fed and watered.

Now, the real question, how sharp was the pricing and how interested were the peeps?; September 8, 2008 9:34 AM
Paul said...: Good question. The price is sharp imo and we had really good feedback. No offers yet, but that is not unusual in this crapola market.; September 8, 2008 10:43 AM
Dave said...: Come on Paul! Let's close that sale and remove one more listing. I got a bet to win.; September 8, 2008 1:57 PM
Paul said...: FV:10780
New Listings 98
Price Changes 119
Sold Listings 53

Just brutal REBGV Sell/List coming at ya tonight.; September 8, 2008 6:43 PM
fish10 said...: Paul

Take a look at West Van:

http://tinyurl.com/5jjpp4

looking forward to you REBGV numbers.; September 8, 2008 7:41 PM
exx said...: This post has been removed by the author.; September 8, 2008 8:05 PM
exx said...: Yikes, brutal numbers again. So far September is living up to expectations.

Paul, do you know what's up with MLS? It has been brutally slow for the last couple of days. How are people supposed to find properties to buy when it takes a couple of minutes between clicks? No wonder the sales numbers are so low! ;); September 8, 2008 8:07 PM
G said...: 38 sales and 305 new lists for GV....OUCH

20K party soon too!!!; September 8, 2008 8:49 PM
Freako said...: What is going on with FV? It is downright bullish when compared to GV.; September 8, 2008 8:52 PM
vanguy said...: Ouch. Those numbers are bad. 24 condo sales, it almost seems like a typo.; September 8, 2008 9:42 PM
Drachen said...: How's the bet coming Dave?

This will make 4 out of 4 predictions wrong for you so far won't it?; September 8, 2008 10:26 PM
Patiently Waiting said...: freako,

I had a conversation with a couple of young adults from the FV. They were both considering buying condos and said there are deals out in Abby and Chilliwack.

I pointed out that you shouldn't buy unless its cheaper than renting. They claimed it was. I don't think its that good yet, but you could probably buy a new condo for under 200K that will rent for $1000+ month.

You know, if you found a desperate developer you could lowball, you might come close to rent.

I still think I convinced them to wait. I reminded them that prices continue falling and one of them clearly listened to that. Good ol' investor psychology.; September 8, 2008 10:40 PM
anne said...: A neighbors' 2ndary condo OP was $448k, then dropped to $438K, finally sold @$416k (Ast $400) subject to bank loan 95%. Will the bank lend 95% of sale price?; September 8, 2008 10:54 PM
patriotz said...: If it's the true sales price, sure, because CMHC will insure 95%.

you could probably buy a new condo for under 200K that will rent for $1000+ month.

Yeah? Example please?

Anyway the interest alone on 200K at 6% is 1000/month. Tack on condo fees,taxes, etc and you're up to 1500 territory. Maybe not twice rent but still not close to rent.

I would not consider buying a condo for over 100x rent. There are just too many downsides. They were at that multiple 10 years ago and will see it again.; September 9, 2008 12:58 AM
Patiently Waiting said...: Vibe in Chilliwack. Two bedrooms under 200K and the infestors are at least trying to get over $1000 rent on Craigslist.

I suspect that new developments like this might be offering incentives for months or even years of subsidized rates. If they aren't now, they will soon.

Still I agree, there is nothing that beats rent, even way out there. I reminded one FTB about the gas costs as she works in Burnaby. That got her thinking.

I think in a year or so, we'll see places at something like 100X rent out in the far reaches of the FV.; September 9, 2008 2:18 AM
oh please said...: freako - yeah, I wonder the same thing about the FV. I've been expecting worse numbers for some time. What's really odd is that I've heard some second hand info about spec house construction coming to a halt in the summer, house prices dropping $100k all at once, etc. And yet none of that seems to show up in the stats. Was it bogus info?

A couple of possibilities:

1. There are more new SFH in the sales mix and smart developers are cutting prices fast and getting some quick sales (can any realtors out there comment?)

2. FV inventory was rising ahead of Vancouver inventory, so it's more a case of declining new listings than it is more sales.

3. Maybe it's still reasonable to pay 500-700k for a nice house in Langley/Abby, given how much a similar house costs in Vancouver. (And no, I don't believe that, but many evidently do.)

4. The collapse is still working its way inward. FV average SFH prices are still up YOY - they are down 4K YOY in Chilliwack.; September 9, 2008 7:27 AM
Dave said...: How's the bet coming Dave?

This will make 4 out of 4 predictions wrong for you so far won't it?

Four predictions? Not sure about that.

One weekend does not a trend make. All those listings put on the market 3 months ago will expire at month end. I still think a lot of inventory will be cleared this way.; September 9, 2008 7:33 AM
freako said...: One weekend does not a trend make. All those listings put on the market 3 months ago will expire at month end. I still think a lot of inventory will be cleared this way.

You may or may not win the bet. But if listings October 1 are higher than listings on September 1 or August 1 you will have been wrong in your prediction that listings peak in the summer. There was a pause in August, that we can agree upon.; September 9, 2008 10:39 AM
Drachen said...: Dave

"Four predictions? Not sure about that."

Dave's predictions
1) Prices will be stable through summer.
2) Prices will fall 5% at most this year.
3) Listings will peak in late Spring or Summer.
4) Inventory will drop by end of September.

As I said, if listings continue upwards at this pace you'll be 4 for 4.; September 9, 2008 11:30 AM
hammy said...: When is the last time the average SFH sold was less than the median? That's a fairly significant milestone.; September 9, 2008 11:51 AM
g said...: Here is how MOM is shaping up (from Inventory)

Sept 1-8 REBGV SFH+TH+APT
Gross Sales 172,897,674 (720M, prorated)
Units Listed 1,337 (about the same pace)
Units Sold 334 (pro-rated to about 1400 or so)
Sale Success Ratio 38%
% Sales to Listings 24%
Avg Price/Unit 517,657 (-7%)
Active Listings 19,526

August 2008 REBGV SFH+TH+APT
Gross Sales 897,510,715
Units Listed 4,589
Units Sold 1,611
Sale Success Ratio 27%
% Sales to Listings 35%
Avg Price/Unit 557,114
Active Listings 19,067; September 9, 2008 2:27 PM
g said...: Listings should be up 25%...not the same; September 9, 2008 2:33 PM
Paul said...: FV:10794
New Listings 101
Price Changes 77
Sold Listings 50

Better day for sales in the REBGV but still very bearish overall.; September 9, 2008 6:35 PM

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