Saturday, May 12, 2007

Inventory Update

Lots more inventory this week.




20 comments:

Warren said...

Thanks for the stats.

So if Chipman's overall area is trending significantly higher, but the west side and downtown are only marginally higher, are we to conclude that the FV is seeing something like 50% higher inventory?

freako said...

"are we to conclude that the FV is seeing something like 50% higher inventory?"

51% yoy for April to be exact.

vineland said...

Ah yes *sigh* new houses popping up in old 'acreage' country over and over again, 5 houses for sale in a 100 yard radius of our house (and either sitting for months or selling in mere days). So far one sold immediately, four are just sitting there with one dropping the price, twice.

Warren said...

Thanks freako, my guess was pretty damn close. :)

I suppose high gas prices isn't helping sell RE far away from the city.

patriotz said...

I suppose high gas prices isn't helping sell RE far away from the city.

I don't think it's the gas prices. In real terms prices aren't very high (in 1970 a gallon of gas was about 45 cents and a bus ride or a glass of beer cost 25 cents. Minimum wage was $1.25/hour). But RE prices sure are.

I think it's the time value of the commute, which is a lot more than the cost of the gas.

Warren said...

patriotz:

Actually we are not far off record prices, in real terms. The US avg is around $3.02/gallon now, with the inflation adjusted record being around $3.30.

Personally I'm all in favor of higher gas prices, as it seems to be the only thing to make people change their habits.

I suggest it as a cause of lower RE sales in the FV because high gas prices are all over the news, and that seems to be the only thing that changes buyer psychology around here.

freako said...

"I think it's the time value of the commute, which is a lot more than the cost of the gas. "

Right you are, if commuters were rational. But time value takes a back seat. Commute times make people cranky. Gas prices make them pitchfork irate.

As you point out, real price of gas isn't through the roof. Once you reduce the increased taxation, the gap narrows.

"Personally I'm all in favor of higher gas prices, as it seems to be the only thing to make people change their habits."

Hear ya. You could double them tomorrow, and I'd be happy. Good luck with that though, the pitchforks will come out. I will re-pitch my suggestion that we could include basic auto insurance in gasoline prices. In the long run it would:

1. Simpllify administration of basic insurance.
2. Elimininate the problem of underinsured motorists.
3. Amount of use, size of vehicle, and manner of driving would at be reflected in cost of insurance.
4. Since it increases the marginal cost of auto use, it would discourage driving more than flat fee insurance.

Disadvantages:
1. If you buy gas out of area, you cheat the system.
2. Insurance would still need to be topped off for collision, theft etc.
3. Drivers involved in accidents would have to be issued a separate surcharge.

I can't see why it couldn't be at least paritally implemented. Tack on 15 cents per litre. Hand extra revenue over to ICBC, who reduces the aggregate cost of basic insurance by a similar amount. Voila. Two birds with one stone.

jesse said...

High gas prices have direct effects (costs more to fill up tank) plus indirect effects (inflation). The latter keeps Dodge et al up at night. Libertarians have long argued that oil prices are self-correcting due to reduced supply curtailing demand so their long-term effects on inflation are extraneous. We will soon see if bond markets (and mortgage markets) agree.

freako said...

Looks like 12K will be crossed today. The linear predictor has 13K in July. I think it will be a lot quicker than that.

A month or so ago, I commented about the rate of inventory run up. We had added about 50 a day to that point. If listings increased by 25%, and sales slowed by a similar amount, listings would pile up at much faster rate. Well, it looks like the listings are there, but sales are still fairly high. Excluding the month end cancellations, we have grown at 77.7 per business day. At that rate, it is 1631 per month. Take off 331 for expirations, and we grow by 1300 per month. In other words, we would break 16K in late August. If so, not too far off the build-up in places like Phoenix, Las Vegas and San Diego. With a one year offset.

freako said...

"High gas prices have direct effects (costs more to fill up tank) plus indirect effects (inflation). The latter keeps Dodge et al up at night."

I know that is probably how it happens, but I don't get it. High gas prices raises CPI, but is not inflation as defined by "increase in money supply in excess of GDP growth". That is what the BoC should be worrying about. Yes, purchasing power based on a fixed basket may shift, but that is no excuse to start pulling on monetary levers of the economy.

CPI is not inflation, it just attempts to measure it.

"Libertarians have long argued that oil prices are self-correcting due to reduced supply curtailing demand so their long-term effects on inflation are extraneous."

Not only self-correcting, but not "inflation". If people spend more on gas, they tend to spend less on other things, which offsets the impact.

freako said...

Also, the NAR releases their Q1 data today. I am going to have a gander to see if Vancouver moved up a spot or two on the "North America's Most Expensive" list.

freako said...

Nope, we are still fourth behind Oakland, San Francisco and Orange County. Third if count Oakland/San Fran as one metro.

These three areas actually increased prices during Q1, very strange. I am pretty sure that the quality adjusted stats are down, so it must be a result of subprime bringing the low end to a crawl.

dingus said...

"I will re-pitch my suggestion that we could include basic auto insurance in gasoline prices."

Interesting idea. Me, I think it should be based on km driven. Easy enough to administer, the broker just follows you out to the vehicle to check the odometer. There would be some needed QA for fraud, though.

I drive little (500k a month?), usually along fairly tame streets, but do drive to work over 15 km over 2 days per month, so pay as much in insurance as someone commuting 2 hours along the highway every day, driving to get groceries etc. Annoying, as I'd think that I'm far less of a risk given my driving habits.

It would encourage transit use or cycling etc. Currently there is no economic argument to use transit for most people -- most people own a car and are paying insurance anyway and the cost of gas is less than the cost of a fare, especially with the zones nonsense. Add the time factor to that and unless you are getting killed on parlking at your destination, you have to be a saint to commute by public transit. The Tory tax break on transit passes probably is ineffective to encourage more new users, but is in effect a subsidy to low income folks. Fine, but not its expressed purpose.

Insurance based on km driven -- let's have an incentive NOT to drive.

Warren said...

If so, not too far off the build-up in places like Phoenix, Las Vegas and San Diego. With a one year offset.

Based on the same 1 year offset, what are prices in those markets doing?

Assuming we don't have a subprime implosion, how do you think that will mitigate falling prices in Vancouver? Or, at least delay the slide.

Warren said...

Also, the NAR releases their Q1 data today. I am going to have a gander to see if Vancouver moved up a spot or two on the "North America's Most Expensive" list.

Not that I doubt the vast knowledge of the NAR, but I'm always skeptical of any cost of living type information that crosses borders. Particularly when its US "experts" running the numbers for Canada.

digi said...

Warren: because its different here?

jesse said...

"High gas prices raises CPI, but is not inflation as defined by 'increase in money supply in excess of GDP growth'."

This is true. I am not sure if the government cares about money supply or about ensuring wages and goods baskets track with a small positive bias. Economists use the term "passing through costs" to try to forecast "CPI inflation". Recently there has not been much pass-through for whatever reason but it has happened before.

OT: Calculated Risk (Tanta) has a great post on a WSJ article personalising tightening mortgage standards and how it crimps demand. The interesting thing is that the lender used a projected market price to determine how much to lend, effectively ignoring the market appraisal snapshots.

jesse said...

"These three areas actually increased prices during Q1, very strange.

It is usually the case that well-to-do areas suffer later than the fringes. From macro perspective we may be seeing "decompression" before tandem price movements. Experience from previous Vancouver downturns portends movements at the top end can be violent and fast, but delayed.

Interesting to consider: does price compression only occur at market peaks or does it occur in valleys too?

Deliverator said...

"I will re-pitch my suggestion that we could include basic auto insurance in gasoline prices."

Interesting idea. Me, I think it should be based on km driven.

Well, Dingus, I'm pretty sure that if you drive more, you'll be buying more gas and will therefore be paying more 'insurance tax'. While this doesn't account for the fuel efficiency difference between a Yaris and a Yukon, it does do a far better job of allocating the pain to those who drive the most without adding much in the way of an enforcement burden.

freako said...

"While this doesn't account for the fuel efficiency difference between a Yaris and a Yukon,"

But there is a risk factor associated with larger size, so not entirely unfair. In fact probably more fair than not. Finally, the manner of driving will affect your gas usuage/insurance. Drive like a bat out of hell, it will cost you at least a little more in insurance.