experts: real estate column Tuesday, July 10, 2007

Buyer (and Reader) Be Aware

May it be possible that some pockets of B.C. and specifically our Lower Mainland are plateauing pricewise and starting to show some build-up in inventory?

By Alan  Skinner

What to be aware of?... or, more correctly, as Ms Milne my grade 3 English teacher would say – ‘Of what to be aware?’ Possibly headlines that make strong statements such as “Time To Buy!” – in a flyer that hit my mailbox a few days ago. Why do we need to be aware? Simply that the exhortation to “buy now” seems to be based in part upon a British Columbia wide study which compared calendar 2005 to calendar 2006 (i.e. up to Dec/06) and then states (a full 6 months later) that ‘the time is now!’ Note – it is July 2007 and this is Greater Vancouver (more specifically, the NorthShore) and not B.C. in general where, during 2006, well leathered Albertan buyers discovered in vast numbers how much they loved central/rural B.C. property. May it be possible that some pockets of B.C. and specifically our Lower Mainland are plateauing pricewise and starting to show some build-up in inventory? It was actually the “ifs” penned in that same flyer, written who knows when, that perturbed me more than just a little. An expert (in this case an academic) was quoted to say that a price escalation pattern could apply if there were no increasing interest rates or no oversupply. Well, mortgage rates have increased in the last few months by approx 1/2 to 3/4% and inventories are climbing (see the actual stats for Jan – June 2007 below). Does this suggest we should be trumpeting – “Time To Buy!” All I say is read comments carefully, find out timeframe of the comments and the geography of the report; Canada, province, full city or Ambleside (e.g.) ... but enough of my personal frustration.

Before we however look at actual (six months on) facts, I would like to say that backing off from the thought of buying could well be folly. The overemphasis on affordability may be just that ... overemphasis. If a fair proportion can afford to buy – enough to maintain demand – we shouldnot assume that the increase in supply dictates a weakening in demand and that prices cannot be sustained (or increase) – think about it.

Now, the North Shore figures (N/Van first). With 6 mths under our belt, it appears clearer that 2007 is continuing the upward price trend. The YTD (year-to-date) figure comparison shows mixed but slightly lower levels of sales from last year. Detached average prices +10% (4% fewer sales) and inventory is down by 11%. Average prices up 12% (t/hse) and up by 14% (apartments). Inventory (t/hse) 22% higher than ’06 and (apt) up from ’06 by 19% (largely new construction). The lagging inventory in the 1st category combined with the evident demand will likely foreshadow a gently continuing rise in detached prices while condos generally seem to be level.

In West Vancouver, detached number of sales down 3%. Average price up 14% and inventory now 19% higher than ’06. On the condo side – attached (t/hses) sold are down 34% from 2006; average price change up 18% based on 33 sales YTD. Active listings now up 60% over last year. Apartments reflect identical level sales as ’06; with average price 7% lower (aberration owing to some inordinately large sales early last year) and active listings 8% lower. The North Shore demand is healthy with inventory steadily increasing but not yet enough for a balanced market.

A final note: As I attempt to help steer folk through the winding turns of the local market I must confess to finding the challenges of steering a canoe (in this case down the River of Golden Dreams) to have been somewhat formidable. Yes I know the course was running high, however thank you John and Susan for this initiation and your hospitality! Humility is a necessary thing.

Again, visit my website to see and “hear” the new developments. I continue my commitment to keep you ... www.OnTopOfTheMarket.ca. This work in progress strives to be the “go to” site for North Shore Real Estate analysis and jumping off point for FULL market listing information.

To join the group subscribing to the e-mail version of this “update” - send a request now toalanskinner@shaw.ca (or from the website) and you’ll be assured receipt; phone me at (604) 988-7368 or visit www.OnTopOfTheMarket.ca




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Recent Articles by this columnist:

Keeping Realtors Honest
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Resistance to change and compliance delay
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Thursday, April 17, 2014


Yes, it's official - demand is rising
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