experts: real estate column Friday, March 07, 2003

Hooray for Economics!

Classical economists like Keynes would have loved the North Shore Real Estate market.

By Alan  Skinner

Classical economists like Keynes would have loved the North Shore Real Estate market. Why? Because, as a market, it follows the economic rules. Most do, although many markets are unduly complicated by myriads of external factors and uncontrollable variables. We are Canadian, and therefore not unduly complicated.... well, not on the surface, at any rate.

Demand remains good (relatively high) - supply, on the other hand is down, significantly so in North Van and noticeably so in West Van. Prices - logically (i.e. "by the rules") up.

Now to North Van - the number of sales, January and February. Detached, attached and apartments, down 18%, down 39% and down 15%. "Now wait a minute, you've just implied its up, up and away, so why all these "downs"?" A good question. It is largely the supply factor that is to blame here. End of Feb '02 vs '03 - detached down 8%, attached down 54% and apartments down 39% implying that much of the "demand factor" is waiting for the right home to appear. Remember, not all "downs" are bad (e.g., taxes, gas prices) - inventory is not one of these (except for those making up the small group of sellers!). Prices however are showing what they should with YTD averages + 18% detached, +8% attached and +8% apartments.

West Van too shows lower inventory - detached down 4%, attached down 33% and apartments down 37%. Here as well, sales are down YTD from 2002 by 11% - detached, 43% - attached and 13% - apartments. To round out the picture, average prices - detached up 10%, attached up 16% and apartments off by 4% (this based on a small sample of sales and skewed somewhat by proportionately fewer high priced units changing hands).

To you buyers out there - a little light on the horizon in the form of a quickening in the pace of arrival of new listings - will it continue? Doing so will hopefully moderate the price rise and lead to a more orderly market. Feeding frenzies with 5 to 6 offers competing are NOT a good thing.

To the sellers - listen to the market demand and be guided accordingly. To those contemplating becoming sellers - I wouldn't hold off too long. Interest rates gently rising, but not, I believe a major factor over the short term.

Enjoy our early Spring - 'til next time.....

I remain ready, willing and able to assist Buyers and Sellers dealing with property on the North Shore. My strong suggestion is for folk to "interview" me by visiting my website (www.AlanSkinner.com) - then call for a face-to-face meeting at (604-988-7368) - or pop into one of my open houses - I look forward to meeting you.

Please join the group subscribing to the e-mail version of this "update" - send a request now to northshore@canada.com and you'll be assured receipt.




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Recent Articles by this columnist:

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Resistance to change and compliance delay
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Yes, it's official - demand is rising
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