Tuesday, December 02, 2008

FVREB November 2008

Missus mohican is out and I'm looking after mohican junior. He is content with his snack for the moment while watching 'Big Comfy Couch' so I thought I'd put down a few thoughts after a celebratory smooth drink of Hennessey paired with some wonderful dark chocolate. A good way to end a day.

Why am I celebrating? Real estate prices are down, down a lot in fact and down very fast. I am going to celebrate every decile (10%) decline in benchmark prices because I don't want families who want to purchase a decent home to mortgage their future away just for the opportunity to own a home. We have a long way to go yet but, as predicted, this is becoming reality very quickly. In fact, I may be willing to throw a -40% party at a local pub when the time comes with the first 40 beers on me - I think that would be very nice - one for each percent decline. At the rate things are going, we may not have to wait very long, assuming the pub is still open and I'm still getting a paycheck!
Sales in the Fraser Valley were low, so low in fact that November 2008 broke the record for lowest sales in one month as far as the current records go back. Only 507 homes changed hands in November and with over 500,000 homes in the board jurisdiction, that fact is truly astonishing. Talk about illiquid.
Active listings in the FVREB were still extremely high for the time of year. We should see a sizeable decrease in listings during December.
With high active listings and low sales the months of inventory rose to the stratosphere in November. There is over 23 months of inventory in the FVREB and this bodes ill for any quick turnaround in the local real estate market.
Price changes are highly correlated to months of inventory so I'll be looking for substantial price decreases over the next 6 months. I waited 6 months for the first celebration at -10% but I may not have to wait that long for the -20% celebration.

Benchmark prices for all housing types in the Fraser Valley are now back to February 2007 levels and I am looking for them to break through to August 2006 levels next month.


mightymouse said...

Sweet! Count me in for one of the first forty!

Unknown said...

Wow, awesome charts!!! Thanks so much!.

van_coffee said...

Boo Yah!
It's getting real ugly out there.

There will be (is) blood.

Nice work, once again and thanks for keeping this up.

Anonymous said...

Count me in for the -40% party.

Anonymous said...

The 40 rounds will be on me when I buy my first place at a 40% discount!

Mango said...

Stunning. And how vindicating for the bears. Truly a great day for young Canadians and families. Congrats again to everyone for holding their ground. I really look forward to hearing anecdotes in a couple years on here from long-time bears who are buying nice places for a nice price.

Anonymous said...

I have taken sooo much abuse from people who called me a naysayer. I foresaw this and have held off buying a house for the past 2 years. It was painful to postpone my plans, but right now I'm so glad that I did. There was no way that I was going to mortgage my future away. Instead, I've been building up a larger downpayment while prices tumble. Woo hoo!

Jordan said...

If prices hit -40% we'll be able to do a 40% down payment on my first home.

I don't like not having a yard for my kids, but maybe we're helping to start a new trend, called saving money.

Let's hope it catches on and comes back in style.