experts: real estate column Monday, May 12, 2008

Running ... In Every Sense

So, Supply is increasing but what of Demand?

By Alan  Skinner

Talk about full employment and a full plate of “busyness” – the past few weeks have been hectic in the extreme – a stretch that seems to have extended from the running of the Vancouver Sun Run to the Vancouver Half Marathon yesterday. These abused bones, muscles and grey cells need a rest!! If you ask any Realtor they will tell you that being involved (on either side) in “multiple offers” can be stressful – but three successful sets of these in just over a week is a handful (and following a 21Km race, somewhat more so) - not that I’m complaining. Don’t believe the ailing real estate market stories; I certainly do not!

Why then is our overall residential inventory [North Shore] starting to build (see the stats below)? So, Supply is increasing but what of Demand? Let’s try and define demand, in a home buying sense. There are clearly different levels of intensity of demand that prevail when someone or a couple or a family is embarking on the “new home” quest. From the “maybe we should buy a bigger/smaller abode” to the “must be in before the school year or new job in Vancouver starts”. Added to these “deadlines of need” there are the psychological accelerators and brakes that ebb and flow during the process. By this I mean the considerations of higher/lower interest rates, positive/ negative press, positive/ negative friends (or family), “is my/are our jobs secure?” ... .. and countless other hopes and fears. Yes, all these “buyers” would buy, now, today, if they could mitigate (rationalize) each and every fear [potential risk] but, indeed, many cannot. Risk can never be eliminated but it must be considered and then rationalized as acceptable (if appropriate). Only then can the decision to proceed be made.

With this in mind, I propose that inventory may well remain higher than, say, May last year while potential buyers wrestle with these considerations. Yes, I believe we are in that sort of phase and are seeing a type of “pent up demand” emerging. A cautionary state of mind, if you will, which will likely settle over the next 6 months to a year as the US mortgage concerns are seen to be less of an impact on our real estate markets than some would wish us believe.

In this vein, thank you for the comments on last month’s Update and I encourage you to take a look at the new report from CIBC World Markets on my website. This is a conservative bank’s take on the hype surrounding the “it must happen here” rhetoric.

Now the first 4 months 2008 figures - North Van detached homes sold down 10% from last year, attached (t/homes) down 12% and apartments down by 7% from ‘07. Detached average prices +20% and inventory now up by 34%. Average prices up 12% (t/hse) and up by 18% (apts). Inventory (t/hse) 57% higher than ‘07 and (apt) up from ‘07 by 60% - both of these largely affected by slower absorption of new construction. While demand is still evident, this may well lead to a tempering of sales prices – plateauing.

In West Van, detached number of sales remains equal to ‘07. Average price up 16% and inventory now up 54% over ‘07. On the condo side – attached (t/hses) sold are now up by 15% from 2007; average price up 5% based on 23 sales YTD. Active listings have however jumped to 35% over last year. Apartments reflect 58 sold vs 55 by Apr ‘07; with average price up 11% from ‘07 and active listings at 88, a “dead heat” with Apr 30/07. North Shore demand is still healthy with inventory clearly continuing to climb – more so in North Van.

Again, visit my website to see and “hear” the new developments. I continue my commitment to keep you ... . . 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 getting the e-mail version of this “update” - send a request now and you’ll be assured receipt; phone me at (604) 988-7368 or visit . Feel free to forward to a friend!

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Recent Articles by this columnist:

Keeping Realtors Honest
Tuesday, August 12, 2014

How well do we stack up?
Tuesday, July 29, 2014

Resistance to change and compliance delay
Wednesday, June 04, 2014

Of urban planning and municipal wisdom
Thursday, April 17, 2014

Yes, it's official - demand is rising
Tuesday, March 11, 2014

All articles by Alan  Skinner

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