In the vein of thinking about the direction of the housing market, I stumbled across some data that I've had sitting on my computer for some time that I found quite interesting but have never posted for some reason. The data comes from http://www.macromarkets.com/ - who started and continue to operate the housing market futures trading on the CME.
So, let's talk about what these indicators mean to us in Vancouver. If we start with the premise that there should be no significant differences between the correlations in US markets and Vancouver, we can use the correlation data above to make some informed observations about the local market and perhaps on the future direction of the market. I think this is a fair assumption given that it makes reasonable sense to see correlations between housing starts, construction spending, unemployment and house prices.
For the record:
- Construction spending is way down in Vancouver at the moment.
- Housing supply is elevated but much lower than last year.
- Mortgage applications are not tracked officially on a local level but anecdotally they are up from last year.
- Housing starts are way down from last year.
- Building permits are also way down.
- New home sales are low but higher than last year.
- Median rent is high in Vancouver compared to other Canadian cities.
- Personal income is falling right now.
- The unemployment rate is rising.
Now what do you think?