Tuesday, July 07, 2009

Vancouver - Decline From Peak

Here is Vancouver's decline in house prices plotted in comparison to US cities since their respective price declines began. The Case Shiller indices track sales pairs much like the Teranet methodology and have been shown to be the most accurate house price tracking methodology.

Case Shiller data is as of April 2009 - data released June 30.
Vancouver REBGV data is as of June 2009 - data released July 3.
Vancouver Teranet data is as of April 2009 - data released June 19.



Dallas, Charlotte and Denver are 20 months into correction mode compared with Detroit, Boston, and San Diego which are over 40 months into the correction. In comparison, Vancouver is only 9 (Teranet) months or 14 months (REBGV) into its correction.



Time will tell if the latest uptick in prices has staying power but I would hazard a guess that we haven't seen the end of price declines. If we are 40 months from peak and we haven't decreased from current levels by then I will count myself as being wrong. Until then, I'll watch and wait.

8 comments:

JimTan said...

40 months?

Right now, it doesn't look like a spring bounce at all.

Over at RET forum, rentah is still hoping for a 50% decline.

david said...

The disparity between the teranet data and the REBGV data is very interesting. I will be very interested to see in the coming months if the teranet shows such an increase as the REBGV.

OK Jim,

If it's not a spring bounce, put your money where your mouth is. Buy a condo in yaletown, and I will rent it from you which will pay for property tax, strata fees and probably most of the interest if you get a variable rate right now. If you are right, the price will increase or at least stay constant and you will slowly build equity and you can sell it in 3 years for a profit. I will even get the place in showroom condition when you decide to sell.

Let me know what you think.

Jordan said...

Wow, I can't believe the REBGV bounce back. That's kind of depressing, maybe Vancouver really is different? Honestly maybe it is time to give up waiting to buy a house for my family and just move to an affordable city or if renting is always going to be cheaper then buying we should just grin and bare it?

JimTan said...

“If it's not a spring bounce, put your money where your mouth is. Buy a condo in yaletown, and I will rent it from you which will pay for property tax, strata fees and probably most of the interest if you get a variable rate right now.”

David,

Just done that. I've moved in and am looking at the next MLS offers 10% higher.

P.S, Can you really afford $3k a month?

david said...

Jim, I am a bit confused.

You just bought and moved in, and are now looking at offers 10% higher? Does this mean you just bought a place, moved in, and are now looking to sell for 10% more, or you are seeing offers for similar places that are 10% higher? Why even move in and sell for 10% higher? I was under the impression 10% was about the break even point after realtor fees, land transfer tax, and all the other associated fees with real estate transactions.

And when did you buy? what building? what is the size? 3K a month is a lot for rent, you can get a large 2 bedroom in coal harbor for that much. Is that the average rent for that place or what you are paying for mortgage, strata and taxes?

I am just trying verify what you are saying because anyone can say they own a million dollar condo in yaletown. Anyway congratulations I suppose, I am just a little skeptical.

pricedoutfornow said...

I agree, the data does look mighty depressing. We should all just pack it in and buy a pricey condo. Why not? It looks like RE in Vancouver is poised to go up forever!
The media is touting the recession as "over"...somehow I doubt this, as people are still losing jobs, getting paycuts, and getting deeper and deeper into debt. I just don't see this recent bout of optimism lasting. I heard today that housing costs have become "affordable", mostly due to lower interest rates. Sure, the monthly payments may be affordable but that doesn't negate the fact that you just took out a $600k mortgage on an asset that may be overpriced...and you'll have to pay that sucker back no matter if interest rates are 2% or 8%.

mike said...

"The disparity between the teranet data and the REBGV data is very interesting. I will be very interested to see in the coming months if the teranet shows such an increase as the REBGV."

I can think of a couple reasons for this difference. 1) 3 month moving average and 2) sales mix. Perhaps, more higher price homes are moving. some of these may be brand new with no previous sales history from which to build sales pairs.

Ice said...

Jim Tan is a RE agent.