Wednesday, March 07, 2012

Greater Vancouver Market Snapshot February 2012

Below are updated sales, inventory and months of inventory graphs for Greater Vancouver to February 2012.

Commentary: February sales volumes are low compared to most years of the last decade. Total inventory was not growing as fast as in January, likely due to advanced listings being "borrowed" from February to hit the markets before Chinese New Year (my speculation).

Below is the predictor of price gains, based on half-over-half price change to months of inventory correlation, and below that the scatter plot showing the raw actual data:

What this shows is the change in prices in a month from 6 months ago based on actual data and “predicting” the price based on months of inventory from that month based on linear regression of half-over-half price change to months of inventory (with 3 month moving average). With changes in the benchmark price I may adjust these graphs using the new figures in the months ahead.

February did see some enclaves of price strength, most notably in lower-priced detached properties, and some noted weakness in higher-priced newer homes and most of Richmond, the latter of which one can only opine had previous buyers looking at economics reflected in funny mirrors. March is usually the onset of the peak selling season and sales volumes will likely increase, as will inventory through the rest of the first half of the year. While tracking and comparing year-over-year data may be interesting it likely won't portend much for this year, at least initially; any retracing of conditions preceding the severe housing recession starting in about April of 2008 and lasting for about a year has little predictive power on future price movements. Now if months of inventory climbs over 10, that would be worrisome for those hoping to maintain their current equity positions in Vancouver real estate.

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