Here is some news from the US:
1) The S&P Case-Shiller House Price index posted its largest decline in 16 years. Wall Street Journal. S&P Press Release.
2) The National Association of Realtors released existing home sales for August. The national inventory of existing homes for sale reached 10 months of supply. This does not include new homes. Here is Calculated Risk's take.
The data out of the US housing market continues to surprise to the downside even for many of the most bearish prognosticators and certainly it seems to have quite a ways to go yet. Every month we hear a new person boldly declaring that "housing has hit bottom" but every month they are proven wrong. I think, based on past downturns, we have 2-4 more years to go before recovery begins.
Before it's all said and done Vancouver may have the title of most expensive single family homes in North America.
Update:
The California Association of Realtors released stats today. Highlights of C.A.R.’s resale housing figures for August 2007:
C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in August 2007 was 11.8 months, compared with 5.9 months (revised) for the same period a year ago. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.
Thirty-year fixed-mortgage interest rates averaged 6.57 percent during August 2007, compared with 6.52 percent in August 2006, according to Freddie Mac. Adjustable-mortgage interest rates averaged 5.67 percent in August 2007 compared with 5.64 percent in August 2006.
The median number of days it took to sell a single-family home was 55.5 days in August 2007, compared with 50.9 days (revised) for the same period a year ago.
An interesting quote:
“Despite the overall increase in the statewide median price, prices declined in nine regions last month, falling 11.5 percent in the Central Valley region and 12.1 percent in Sacramento,” said C.A.R. President Colleen Badagliacco. “Price softness is even more pronounced when we look at different segments of the market. For example, the statewide median price in the entry-level price range of less than $500,000 fell 5.1 percent in August to $349,360 compared with $368,210 for the same period a year ago."
9 comments:
It might be interesting to plot the Vancouver and FV %YOY change graphs like this Seattle Bubble post. I would be interested to see if Vancouver and FV are following the concave shape like all other US cities.
jesse - I post the YOY% price change every month for the FVREB area - see September 5th post. We definitely have the same concave shape as the US. It is pure folly to think we will escape unscathed.
FV YOY% change peaked at 24% in June 2006 and it is currently at 9%. I expect we are on track to hit negative YOY by end of Q1 or beginning of Q2 2008 if we follow the same path as most other markets.
Apparently with the dollar parity we're all rushing down to buy cheap Washington real estate.
http://tinyurl.com/24p2ja
How long before people in Seattle start blaming rich Canadians for their housing bubble.
How long before people in Seattle start blaming rich Canadians for their housing bubble.
When there's no real reason for a thing to occur you have to grasp every straw you can if you want to believe.
I've seen ppl on TheHousingBubbleBlog explain Bellingham's high prices with the 2010 games!!!
Yep, they'll be calling a bottom every month for the next four years. Eventually, even the sheep will stop believing...
From CAR release: "Large changes in local median home prices typically indicate both local home price appreciation, and often, large shifts in the composition of housing market activity. Some of the variations in median home prices for August may be exaggerated due to compositional changes in housing demand."
"Local home price appreciation." I think they may want to update their disclaimers.
"Price softness is even more pronounced when we look at different segments of the market."
This is the first I have seen a Realtors' association acknowledge the bottom of the market is getting hammered. Bloggers have been saying this for months. I hope people at the higher parts of the market aren't inferring price declines will be exclusively isolated to the low end.
Highlights of C.A.R.’s resale housing figures for August 2007:
C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in August 2007 was 11.8 months, compared with 5.9 months (revised) for the same period a year ago.
I expect this number to climb sharply into the late fall and winter. Inventory is still adding at a good clip, and sales are still falling. The liquidity crises is not reflected in August sales, and will only be partially reflected in September. The October numbers will be a slaughter IMHO.
The video of the auction is interesting to watch. I wonder how come mortgage lenders in Canada don't sell more foreclosed properties by auction? I had heard that the law in Canada allows the borrower to sue the lender if they dispose of their foreclosed property for "less than market value".
If that were true, it may discourage lenders from "dumping" properties for whatever they could get at auction.
Speaking of auctions, I was looking into the annual tax sale auction that is held by most cities in B.C. on the last Monday in September. We drove around and looked at some of the properties for sale. Some of them are quite nice.
I would guess that the owners are taking advantage of the law, in that the property can be sold at auction for being in arrears of property tax, but the owner can redeem the property within a year's time, as long as they pay the taxes owing, plus some fees.
Not much of an incentive to pay your taxes, if you still have a year afterwards to redeem your property. And they don't lose possession of the property just because it was sold at auction.
As I understand it, anybody buying tax sale property does not take possession of it for the duration of that year. They are somewhat at the mercy of the delinquent owners, trusting them not to trash the place. Not a very good system, IMHO. As such, we did not attend the auction.
casual observer,
I was thinking of checking out the City of Vancouver's tax sale this year:
Tax Sale Details
If I go I'll let you know. Your point about 1 year to "trash the place" is a good one.
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