Here is the news release. Here are the numbers.
MLS® home sales activity in the area served by the Chilliwack and District Real Estate Board was up on a year-over-year basis for the third consecutive month in July 2009, posting the largest gain in four years.
According to statistics provided by the Board, MLS® home sales numbered 255 units in July 2009, jumping 42 per cent from the weak moth of July last year. This is the third year-over-year activity increase in as many months, and the largest since August 2005.
Sales were up on a month-over-month basis in the June-July period for the first time in six years. As a result, seasonally adjusted sales rose 14 per cent in July 2009 compared to June (seasonal adjustment removes normal seasonal variations). Seasonally adjusted activity has more than doubled since reaching an eight-year low last December.
“Consumers are becoming more confident,” said Jim Adam, President of the Chilliwack & District Real Estate Board “Recovering demand is drawing down the supply of homes for sale. This is firming up the market, and helping to stabilize prices.”
The combined dollar value of MLS® home sales in July 2009 totalled $77 million. This is also up 42 per cent from levels in July 2008.
Total MLS® sales numbered 274 units in July, an increase of 42 per cent from year-ago levels. The total value of all MLS® properties sold in July 2009 was up 48 per cent to $82.7 million.
The MLS® residential average price for homes sold in July 2009 was $302,133, virtually unchanged (up $210) from year-ago levels. Even so, this is the first increase in average price in more than a year.
The number of new residential listings on the Board’s MLS® system numbered 410 units in July 2009, down 19 per cent from July 2008. This is the seventh consecutive decline in new listings, all of which have been greater than 15 per cent.
Active listings continue to retreat from their elevated levels of 2008, posting a fifth year-over-year decline in as many months. There were 1,449 active residential listings on the Board’s MLS® system at the end of July 2009, falling 29 per cent from year-ago levels. This is the largest decrease in more than nine years.
The number of months of inventory stood at 5.7 months in July 2009, which remains down significantly from the recessionary peak of 24.2 months last December. The number of months of inventory is the number of months it would take to sell current inventories at the current rate of sales activity.
The Chilliwack and District Real Estate Board is an association of 283 REALTORS® that provides services to and sets standards for members. The Chilliwack and District Real Estate Board serves Chilliwack, Agassiz, Hope, Boston Bar and Harrison.
No sign of a bubble out there.
ReplyDeleteWhat there is a sign of, is a temporary reflation of the original bubble, a pause in its deflation. Very like what has been seen in all the worst US markets. Just as nothing goes UP in a straight line, nothing goes DOWN directly, either.
ReplyDeleteSales may be up, but prices, adjusted for inflation, are DOWN.
With China on the brink, commodities and stocks unstable, unemployment rising, recession still a reality, and debt levels INCREASING just as long term interest rates are poised to climb, the second leg of the real estate collapse promises to be more catastrophic than the first.
Jim Tan will need to double his meds.
Octagonian, things DEFINITELY go down in a straight line. I can point out a plethora of examples but let's just stick with the most recent examples.
ReplyDeleteTake a look at any commodity chart over the past year, for clarity sake, let's look at crude oil. Crude went from 140 to 30 in 6 months... with absolutely no breaks in the downwards movement.
In terms of Vancouver real estate, I really don't know what's going to happen. I think interest rates going up will hurt prices but inflation will help prices so I see us pretty flat.
Also, Jim, is it possible to email you and discuss things because I've been bearish real estate for a very long time because all I ever find are perma bears on boards and the only bullish people I hear are bias real estate agents. I'd love to hear your thoughts on things as I'm looking to buy a place (first time buyer) but all these perma bears do make me cautious.
ReplyDelete@chadmpnp:
ReplyDeleteOf course things don't go straight down, and oil did not. I am in Alberta and am invested in oil. The initial decline was broken up by several bounces, just as the recent recovery in price has been corrected on the way up.
The stock market itself is an obvious example of things that do not go straight down, or up.
If you follow the graphs on housing prices across the former bubble cities of the US west coast, you also see pauses and bounces.
If you are looking for counsel on a first time purchase from Jim Tan, you may as well skip it and take the plunge.
If you can not make your OWN mind up -- and weigh for yourself the cases made by bears and bulls -- then you deserve to be separated from your money at the top of a market.
In fact, it is your moral imperative as an actor in the market to lose your money, because you can not intelligently employ or deploy it.
If anyone wants to actually know the facts on Crude Oil, just take a look at a chart, it went straight down and didn't touch the edges. Octagonian, don't let the facts get in the way of a good story..........
ReplyDeleteAlso Nat Gas (UNG) is a great example of an asset class that went straight down with no real breaks in the decline.
ReplyDeleteHi Chapmpnp,
ReplyDeleteHere's my background. I'm a retired finance guy. I was expecting a 30% fall in condos. But that didn't happen.
I bought in May as the market turned. The inventory disappeared so quickly! I had been attending open houses since November. So, I was ready when I had to pull the trigger.
You need to be specific about what you are looking for. The best time to buy premium/popular RE was in early spring. Mortgages were cheap. You had a choice of properties in a buyer's market.
As you can see, the prices of premium/popular RE went crazy when people realized that there would not be a crash. It is now a seller's market.
I have more hope for not so popular RE. It is possible that prices will drift down as the effects of unemployment catch up with us. Mike did a multi-factor analysis some weeks ago.
I strongly advise you not to buy problematic properties. They may be cheap but they will be poor investments. Always buy the best quality you can afford even if you have to sacrifice on footage or amenities.
How much leverage should you apply? That depends on your personal situation. Always run the numbers through several scenarios.
I hang out on the RET forum. It's not a good forum because it's not moderated. However, there are people who can help if you ask specific questions.
I run an economics thread titled 'Canada flirts with recovery'. Have a look at the first four pages, and the last two pages. I'll try to help.
http://www.realestatetalks.com/viewtopic.php?f=8&t=37349&start=0
Thanks Jim, ultimately, this is my home, but I don't want to be putting a substantial amount of money into something that may be at a long term top. I'm a stock guy, and really don't know much about real estate but from all the research I've done the scenario I see playing out is simply over the next 10 years inflation will put upward pressure on prices, while interest rate increases will put downward pressure on prices leaving us with a fairly flat market, which is something I'm ok with being a first time home buyer.
ReplyDeletechad,
ReplyDeleteIf you think there will be inflation, and increased interest rates, how would this lead to flat home prices?
Inflation leads to assets costing more. High interest rates will make homes less affordable for anyone taking out a mortgage to pay for one.
So if things like groceries and gas cost more, and it costs more to get a mortgage, how will this keep prices constant?
Right now it is unlikely the average salary will increase very much over the next few years, since most companies are still cutting costs. If inflation drives the price of necessities like food and gas upwards, people will have less to spend on a house. Add that to rising interest rates (decreasing affordability) and you have falling prices.
A home is important to a persons survival, but food is more important. If people have to spend more on things they need, they will have less money left over to pay rent or a mortgage. It is easier to decrease your housing costs by renting a cheaper place or moving in with roommates, than it is to decrease the amount of food you eat and gas you use. Sure you could get a bus pass and eat no name brand food, but it gets to a point where 1500 a month for housing on 2000 take home pay makes it virtually impossible to buy everything else you need.
What I think will happen is people will have less money for housing after all other costs in a few years. This forces them to move to a cheaper place. Add this to rising interest rates means they probably will not buy when they move. This will most likely put downward pressure on prices in the next few years.
David,
ReplyDeleteBecause inflation has a direct positive correlation on real estate prices, it's as simple as that.
Chad,
ReplyDeleteIt is not that simple. Inflation does not cause everything to increase in value equally.
The housing market does not function like the stock market. You mentioned you were a stock guy, and you seem to be applying the same logic to the housing market. There are similarities but they do not function the same. Look at a time with huge inflation in the past 30 years. In the early 80s mortgage rates were around 18%, indicating huge inflation. Housing prices plummeted to almost half their value in a single year. It then took almost 10 years for prices to hit those numbers again. This is an extreme example, and it may never happen again, but it still happened once showing it is possible.
Inflation causes prices to increase. This will happen first in things like groceries. Consumers have very little control over this as everyone needs to eat. The housing market is not the same because not everyone needs to own. Renting is always an option. I am saying someone currently renting will be very unlikely to increase their monthly housing costs (by purchasing a home) while at the same time their other costs are increasing, but their salary is not.
Inflation in the long run will cause housing prices to rise. But in the past 7 years prices have risen much faster than inflation, so inflation has some catching up to do. You seem to think these prices are normal when historically they are very abnormal.
Just judging by the linear regression line Mohican posted a while back I wouldn't say prices are that far away from normal.
ReplyDeletechadmpnp
ReplyDeleteI'm not sure that we are at a long term top. The technical strength of the bounce was very impressive. You might want to keep an open mind.
Chad,
ReplyDeleteHow about comparing Vancouvers price to income ratio to almost any other city in the world? Would you say that it is normal that most cities have the average house costing 4X the average income while in vancouver it is 8.2 last time I checked?
I am saying that the average person should be able to afford an average home in this (or any) city. Things like investors and speculation drive that number upwards, but eventually they run out of greater fools and the system collapses. These low interest rates have brought affordability to some people, but when these interest rates disappear and return somewhere around the historical norm of 8% these people could end up getting screwed.
If you do buy plan on paying something around 8% (this is a total guess, but is historically normal) and see what you can afford. Then just for curiosity sake see what will happen if rates skyrocket to around 12%. This would be a disaster for most people.
Even a $200000 mortgage at 12% requires over 2000 a month. And 250000 (assuming 20% down) doesnt by squat in Vancouver.
David,
ReplyDeleteI've run the disaster scenario up to 14% interest rates and while it would make things difficult, it would not be impossible for me. I still am in the camp of flat prices for the next few years but I really don't see the bottom falling out.
I will most likely go through and buy this unit if my offer is accepted. Ultimately, this is my house, but it is also a big investment.
Chad,
ReplyDeleteAt least you are prepared if things get nasty, which is more than I can say for most first time buyers.
I personally see prices falling steadily in the next few years unless there is a dramatic rise in interest rates, then there could be dramatic drops similar to those in the US.
Most bulls are predicting flat prices or moderate increases, which would make it near impossible for investors to make money, as there would be no large capital appreciation and rents cannot pay the mortgage. No investors leads to decreasing demand which leads to decreasing prices.
Generally I think buying an asset near its all time high price doesnt make sense.
This graph from UBC shows nominal and real price (inflation adjusted) for vancouver homes.
http://cuer.sauder.ubc.ca/cma/data/ResidentialRealEstate/HousingPrices/housing-pri-vancouver.pdf
It is a few months out of date so add the spring bounce in there and it is clear we are almost at the all time high for homes in real prices. No one can say for sure where we will go but in the past 35 years prices have never been as high as they are now (with the exception of last summer) so I simply do not see them holding their value given the current economic crisis.
Ultimately it is your choice and it does seem like you have done your homework and are prepared if things get hairy. Good luck to you if you purchase this fall and I hope it works well for you.
David,
ReplyDeleteIf you're talking about nominal prices then it would be unrealistic for prices to be anywhere close to those of 35 years ago. I agree, I think the upside is capped and I see a MAX downside of 20% from here. I'm not an investor, I'm buying this home to live in but obviously I don't want to be buying at a terrible time. I think in 10 years prices will ultimately be higher and I'm fairly content with my decision even if it will unlikely make me a ton of money, I'd be surprised if it lost me a lot.
.. Also David, thanks for posting the chart, being a stock guy I feel more at home looking at this! How often do they update the chart?
ReplyDeleteThanks
This is the answer to those bears making a big deal about unemployment.
ReplyDeleteNo 'jobless recovery' this time around: CIBC
John Morrissy, Financial Post
Published: Wednesday, August 19, 2009
OTTAWA -- Canada's unemployed are finding work at almost the same pace they did before the recession began, suggesting that when the economy turns around, it won't bring with it a 1991-style "jobless recovery," says a report Wednesday by CIBC World Markets.
While the number of unemployed Canadians has soared to 1,583,000 and the unemployment rate to 8.6%, people are finding new jobs within an average of 15 weeks, only one week longer than it took before the economic slide began, said senior economist Benjamin Tal.
"Rising unemployment in a context of a relatively short duration of unemployment is a reflection of a dynamic labour market where becoming unemployed does not mean remaining unemployed," Mr. Tal said.
Furthermore, he said, the data suggests that the current wave of personal bankruptcies, which climbed more than 54% to almost 11,000 claims in the month of June, will be relatively short-lived.
The report explains that while the bottom line is the unemployment rate, the bigger implications for the economy lie in how much time people spend out of work. The longer people remain unemployed, and the larger the number of people doing so, the worse the impact on the economy at large, as consumer confidence falls and underlying fundamentals wilt.
Currently, about 250,000 Canadians have been unemployed for more than six months, a number 30% lower than at the equivalent stage in the 1991 recession, Mr. Tal's study shows. Conversely, the rate of newly unemployed Canadians -- at one million -- is "in line" with the pace seen in the 1991 recession, he said.
That shows people are still finding work -- although perhaps of a lower quality or in the form of self-employment -- despite the fact companies continue to lay people off, Mr. Tal said.
Moreover, Mr. Tal said, this "exit rate" for the newly unemployed, who are finding jobs in relatively short order, "bodes well for a more normal job market recovery, as opposed to the jobless recovery that followed the 1991 recession."
But it will again be a case of "the West versus the rest," as the fate of Ontario and Quebec, which currently suffer the longest lengths of unemployment, at 18 weeks and 17 weeks respectively, will be tied to a more anemic U.S. recovery, while B.C. and Alberta respond to a more vigorous global expansion, Mr. Tal said.
Oil did go straight down if you ignore 5 rallies of greater than 10% each. There was a particularly large rally from 90 to 110 which was more than 20%. You want dates or just a graph?
ReplyDeleteRoss,
ReplyDeleteGive it up, oil went STRAIGHT DOWN. A 10% rally in a volatile instrument such as crude oil is absolutely NOTHING, a 10% move up or down in crude happens in a single day quite often. Move on, admit you're wrong and next time enjoy the fabulous world of FACTS.
http://billcara.com/assets/charts/2008_11_28_WTIC.weekly.png
ReplyDeleteThis is either a picture of the oil collapse or the visual representation of straight down in Websters Dictionary.
You said straight down that implies no rallies and NO opportunities to get short. I have identified 5 such opportunities. It followed standard fib retracements and EW counts. That is not straight down in my book. This may not be your definition or straight down if so then I agree to disagree just as a majority of tech traders would.
ReplyDeleteThe bounce from 90 to 110 was not a great opportunity to get short?
ReplyDeleteIt pulled right onto the moving average and formed a perfect flag.
This is the stuff tech traders dream of.
Try a daily chart as that rally lasted 3 weeks.
ReplyDeleteIf you want to see my definition of straight doen look at the 1987 stock market crash. There were no opportunites to get short. That is a true crash and a nuch better definition of srtaight down. I do not have to resort to tricks like using a weekly chart.
ReplyDeleteThis is your definition of straight down?
ReplyDeletehttp://cdn.billcara.com/assets/charts/2008_12_22_WTIC.daily.png
The four rallies on that chart are as follows
ReplyDelete1. $90.42 to $110.45 gain 22%
2. $62.3 to $71.77 gain 17%
3. $48.25 to $55.98 gain 16%
4. $40.5 to $52.95 gain 30%
So I have to ignore these rallies?
OK you are right.
LOL
LOL, you're comparing a 1 day crash in 1987 to a 6 month crash in Oil?
ReplyDeleteGive you're head a shake
You are right. I will just close my eyes, plug my ears, and repeat "a 30% rally did not happen" over and over so that it goes away.
ReplyDeleteDamn I opened my eyes and it is still there. Maybe using a 6 month sampling rate. Yes, that is it a graph with two points on it really makes your point.
You are sooooo right.
LOL.
Who compared oil (a short term highly volatile commodity) to housing?
ReplyDeleteI would say you opened that door and I just walked though it with my 1987 comparison. Are you closing that door now that it no longer suits you?
If you are closing the unrelated comparisons door then your entire point evaporates.
The best related example of "straight down" is Vancouver real estate in the early 1980's. Oh, and good luck with your bid on that place.
ReplyDeletePlease show me where I compared oil to housing. I was responding to the incorrect comment that "nothing goes straight down" which the crude oil chart that goes straight down clearly shows, as does an intraday October 19th 1987 S&P chart.
ReplyDeleteAgain, don't let facts get in the way of your argument, but at very least don't argue against yourself, you are starting to look silly with all the extra time on your hands.
You said
ReplyDelete"Crude went from 140 to 30 in 6 months... with absolutely no breaks in the downwards movement."
I said.
"The four rallies on that chart are as follows
1. $90.42 to $110.45 gain 22%
2. $62.3 to $71.77 gain 17%
3. $48.25 to $55.98 gain 16%
4. $40.5 to $52.95 gain 30%"
As a final comment I will say you have a different definition of "absolutely no breaks in the downwards movement" but whatever floats you boat.
Good to see these stats up.
ReplyDeleteGot any more House Buying Tips for chilliwack homes?
What's it worth now? Does Zillow overstate the value? By how much? Mobile homes for sale in arkansas
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteThere are similarities but they do not function the same.
ReplyDeletecharisma condo