Wednesday, July 15, 2009

FVREB June Stats

It completely slipped my mind until today but I neglected to post the monthly recap of the Fraser Valley Real Estate Board statistics release.

Here it is:
Active listings ended the month of June 2009 at 9300. A level well below the lofty levels of last year.
Sales were nearly at peak levels with 1982 homes changing hands during the month. I would love to hear some anecdotes of sellers and buyers to hear what is motivating them to move in the market right now.


Prices have certainly stabilized for now and increased a little with the robust activity this spring.
The correlation between Months of Inventory and price changes is extremely strong.

15 comments:

Deliverator said...

Just from eyeballing the graphs, it doesn't look like the decrease in the number of active listings is entirely due to sales. The drop in MOI would appear to be more due to listings being removed and not renewed than anything else.

mohican said...

I think you are right Deliverator.

Many would be listers have not listed this year for whatever reason. I can speculate on what may be motivating them but there is no hard data to suggest where all of these listings have gone.

Dave said...

Mohican, I think the answer to where those listings have gone is basic supply and demand. Lower prices (in our case 10%) result in less supply.

Anecdotes... I see lots of people around me buying places. What is driving that? Affordability is a big one as that metric has improved significantly. The people I see buying believe that real estate is always a good investment over the long term. They recognize the potential for a further correction in the short term, but they aren't buying for the short term, so it just isn't a big factor. The economy isn't a big factor either because it is your personal economy that counts and many people feel secure with their incomes. With the continued growth in dual income households, I think there is less of a worry about income than in the past.

mohican said...

I basically agree Dave based on what I'm seeing this spring so far. It now seems far more likely that we will experience a slow stagnation with flat and lower prices in the local real estate market rather than an outright collapse.

jesse said...

"With the continued growth in dual income households, I think there is less of a worry about income than in the past."

Actually dual income homes have been declining over the past year and will continue to decline well into 2010 and 2011.

Given that mortgage rates look set to be low for a while (read: years) I don't see prices collapsing as they did in 2008 (at an annual rate of -20%!!). However, wage growth is going to be very low and will probably lag rising interest rates by 1-2 years. High unemployment and rising rates are not good news for housing.

buff_butler said...

What are your thoughts on places like Ottawa and Quebeq that didn't really have any loss in regards to equity and are now "bi-standards" to this stimulus? Do you think that this combined with low interest rates will lead to an equity bubble?

Patiently Waiting said...

"It now seems far more likely that we will experience a slow stagnation with flat and lower prices in the local real estate market rather than an outright collapse."

Is this a short-term or long-term prediction?

pricedoutfornow said...

Mohican, it sounds like you're throwing in the towel! I think that it may seem that the RE market will not collapse from where we're sitting, but take a look at No-Lympics excellent analysis of what will happen as interest rates increase even slightly from recent lows (and it WILL happen, they cannot remain so low indefinitely). I still refuse to believe that "it won't happen here"

Nero said...

I get the feeling that we're in for a long, slow grind to a trough that could be as many as 4-5 years away.

If we enter a phase of stagflation, what does this mean for real estate?

mohican said...

I wouldn't say that I'm 'throwing in the towel' but it seems to me that, barring a spike in interest rates, we are likely to see a long slow correction in prices. I still think we'll see the eventual correction in prices but it may take longer than most of us expected or perhaps hoped.

jesse said...

As a comparison, some US markets peaked in late 2005/early 2006 and are only now starting to approach pre-bubble valuations. That's 3-4 years with most of that time spent with interest rates a few % higher than current levels. There is a "spring bounce" in the US as well, though funny how they haven't "bounced" back to 10% off peak!

BC is barely a year from peak and received a shot of methanol in the fuel lines with rate cutz earlier this year. I would expect at least another 4-5 years before valuations look more reasonable for long-term value investors, who aren't enticed by what looks to be temporarily low mortgage rates.

mohican said...

I would tend to agree with your conclusion jesse. I was hoping for a quicker correction in which we play 'catch up' with US cities but it seems that these super low rates have really juiced up the affordability level for a lot of people and it will take some time to work through the system.

mikyung said...

The question is; how long will these super rates last? And how much do they have to go up to reverse the current upswinging trends?

buff_butler said...

In edmonton (where I am right now) the stats were released and my initial argument was that the interest rates dropped so low that they let 3 years worth of buyers into the market all at once "shifting the demand curve." By next year this extra queue of buyers will be exausted and prices should stagnate or drop. This looks to be a similar case in Vancouver with prices dropping to the 2006 levels so all of a sudden we had 3 years worth of buyers let loose to fight over the same properties. I dunno am I grasping at straws here?

If this wernt true it would be a litte unfortunate. It would be nice if some of the fundimental problems with our city get cleaned up.

RentingSucks said...

Canadian posted this link to real estate talks. Wow the game is rigged after all.

http://americacanada.blogspot.com/

Average equity of people buying homes including move up buyers was 6 percent.

The only question is does this have to collapse or will the government intervene with taxpayer money?