Listings are up - - WAY UP. 33% higher than last year.
Sales are down - - WAY DOWN. 25% lower than last year.
Consequently the Months of Inventory is high for this time of year at 7 MOI.
Note regarding active listings - the FVREB decided to change the way they calculate active listings to a more accurate method but it limits our ability to compare year over year changes to inventory. Using the previous method, inventory would have been approximately 12,400 for an increase of 47% YOY and a MOI of 7.8.
Median Prices were up for detached (1.4%) and down for townhouses (-1.3%) and apartments (-2.2%). Low quality is the first to suffer during a real estate downturn like we are entering right now. The lower quality areas, structures, and housing types go down first and most.
We are well on our way to having negative Year over Year price changes with current annual appreciation for the House Price Index coming in at a lowly 4.5%. I fully expect that number to be negative by fall. The House Price Index in some lower quality areas is already in negative YOY% territory - see the press release for more details.
The price change model using months of inventory to predict future price movements is working well with a predicted MOM% price decline for the next few months on average.
8 comments:
I think the footnote contained in the FVREB press release regarding the active listings count is nauseating for its poor timing.
Why change the way you count listings without doing an adjustment for previous months and why do it in a busy month. Why not wait for wintertime when the impact would be less?
The spin contained in the press release was barf-o-rific with the appreciation highlights without mention of the lowlights.
If I were writing the press release it might read like this - - homes in some areas of the Fraser Valley became more affordable over the past year and we are looking forward to lower prices and more attractive entry points for first time buyers over the next 12 months as prices moderate and first time buyers have more opportunities to buy suitable and affordable accomadations.
I can wish.
Don't know if you caught the article in the province
http://www.canada.com/theprovince/news/money/story.html?id=13fbf51e-f058-4360-ab83-6b8c94cbdc80
I've always wondered how much money BC spends on residential real estate investment, I never thought $4billion in a single quarter!
Once the speculators start dumping their condos, that should kick off the overall market decline.
Why change the way you count listings without doing an adjustment for previous months and why do it in a busy month.
They should at least have given us dual numbers for May so that we have a clue about how overstated previous listings were. On the other hand, I think overstated listings are less suspect than understated listings.
Home ownership at record levels; Cdn mortgage debt headed to $1-trillion mark
Never before have so many Canadians owned homes. And never before have they owed so much for the privilege.
Interest rates at or near historical lows combined with low unemployment and recent changes that allow people to buy houses with less money down and pay off mortgages over longer periods resulted in 68.4 per cent of Canadians in the housing market in 2006.
That's up from 65.8 per cent in 2001 and 60 per cent in 1971, according to the latest Statistics Canada data.
The increase comes despite the fact that the cost of housing in many cities across the country has gone through the roof, outstripping inflation by far, while median incomes have essentially flatlined.
Move along folks, nothing to see here.
In my bones I know a substantial drop is coming. A few people I know have acknowledged that they think the market has turned. Yet I still feel like I'm that guy on the corner holding the "end of the world" brochure....
I just wish the drops would start...feel like I've been waiting forever.
Never before have so many Canadians owned homes.
Translation: We have borrowed demand from the future.
The increase comes despite the fact that the cost of housing in many cities across the country has gone through the roof, outstripping inflation by far, while median incomes have essentially flatlined
Restated:
The cost of housing in many cities across the country has gone through the roof, outstripping inflation by far, while median incomes have essentially flatlined because home ownership has increased to record levels.
Cause and effect you know. As people fight to outbid another on properties the price skyrockets. TEMPORARILY. Later new construction will meet a dearth of demand and down we go. What is so hard to grasp about this?
The listings can be hidden in a change of count, maybe once.
They can't change the way they count every month.
Maybe someone at the office needed more time to unload? ;)
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