Listing Volume Continues Up
But not enough to really matter, it seems. The Board is so busy that they’re working overtime putting in numbers today so I haven’t updated the weekly stats but a thought occurred to me as another stat to look at.
Everywhere you drive it seems there’s another for sale sign or direction arrow and that has a lot of people thinking that the market must be turning. It’s not. Not yet, anyway. Slowing down? Yes. Reversing course? No.
The stat I’d thought I’d pull up was the liquidity stat. I used Canada Post to get the householder counts for all of Vancouver West and East. There are 104,882 Houses and 149,883 Apartments. This is including all buildings which really is not necessarily fair as a good number of those apartments are rental buildings. But we’ll call that a wash since the active listings count also does not count FSBOs.
Currently there are 2592 Attached Properties for sale and 1374 Detached Properties for sale.
The new stat for you? In Vancouver West and East approximately 1 out of every 59 attached properties are for sale while 1 out of every 77 houses are.
Now I don’t know about you but an aggregate average of about 1.6% offered for sale does not sound like a very big number to me. Especially in light of the fact that every property is different (OK, condos within a building maybe not so much).
There are a lot of people calling for a big bust to this run and I don’t think I’m being too bold in stating that I think we’ll need a listing increase of over 50% from where we are today to start dropping. That would put us at about 1 in every 40 homes for sale, 5 in an average building, 1 house on every street.
If the market continues on the pace it is now, with no drop in listings and a continued sale/list of about 50% we may hit that mark by the end of July.
If you are thinking about selling, I highly recommend doing so sooner rather than later. The competition you will face in the future is only looking to increase.
Vancouver, BC 
You could be right in that we wouldn’t see a ‘bust’ but the real question I think is how far will prices go down once the competition gets fierce. I’ve personally had to drop my price twice in a month, so have 1/2 of the similar listings in my area. Then factor in the speculators (and I’m sure there are a few) who can’t afford NOT to sell… Yikes. What is that point I wonder… 10%? 20%? I don’t think it needs to go all the way to 50% to start the fire.
10-20%? Well, then at the rates active volume is increasing you are talking about 2-4 weeks. I don’t think anyone will “start a fire” within that time frame. It’s just too soon. But you are seeing price drops, including your own, which may be the start of something. At the same time I wonder how your home was priced in the first place. still see multiple offer situations and sales sometimes as much as 10% over ask for homes that were well priced (not underpriced) and well presented.
As an aside, I have yet to have to do a price reduction that the Seller wasn’t aware would be coming when the listing was taken. Some sellers are firm (at first) in their opinion of value. A good realtor will let them know well before signing the contract that the price is highly unlikely to be achieved and will also be firm in their valuation. They may take the listing but will do so with an understanding that the price will be reduced to whatever within a few weeks.
My place unfortunately falls under the ‘average’ column. We’ve done some nice renos but unfortunately with the low lending rates so has almost everyone else. I’m not too worried about dropping my price, but it’s interesting that all my friends are like, “You need a new realtor, Vancouver is the next New York, prices will never drop and you should always sell the next day”. Not verbatum… but the mentality of people our age with regards to ever increasing home values is pretty naive.
I guess when predicting any major correction it’s not the average home owner, like myself, that actually lives in my home and can make the payments it’s all these guys:
http://www.condoassignments.com/currentlistings.html
Like the US, it will be the stupid people who will take the rest of us down with them. Is there any way you could dig up that stat? Maybe the number of assignments vs. ’sold out’ developments. I’m not sure what the ‘right’ stat would be in that case. But greedy people who are still trying to flip 1/2 million dollar condos scare me.
That flip% stat is a real tough one to try to dig up. The first problem is trying to find all the assignments which are scattered across multiple sites. The clearest way to see what % are speculators are to see what comes up for sale on completion and are listed on the MLS. For an average building we see anywhere from 10-25%. There are some buildings, however, which have as many as 40-50% and that is more indicative of the project marketing than the market in general. Those marketers specifically targeted “insiders” and “speculators”.
Aside: The assignment market is dead. Presale prices are so high, assignment fees are exhorbitant, and the number of people who will hand over an extra 100k have pretty much dried up. That’s not to mention the risk of the project not completing.