experts: real estate column Friday, June 06, 2008

Like the Bus, Eventually the Cycle Arrives

Strong market surges are clearly appearing to be deserting us.

By Alan  Skinner

Stating what one truly believes to be the current market position and direction (even based on the facts of current market data) is often fraught with the danger of conflicting with some publicly held preconceptions. Over the past, say 3 years, many proponents of the “imminent crash” theory have, sometimes vehemently, objected to predictions of market value rises. Over that same 3 year period (based on demonstrated performance), our North Shore has seen average price increases of from 10%, to in some segments 13 or 14% per annum. Was it wrong to extol the bullishness of that market over that time? Only, I guess, if one believes that the scribe could have stimulated the demand with his/her opinion. I believe in market forces and, in this case, that the pen is not mightier than the market.

These past strong market surges are clearly appearing to be deserting us. I still maintain a belief in my “epicenter” theory, where those areas geographically further away from the centre are the first to experience this softening and generally experience a greater weakening than those more centrally located (e.g. the softening in the Fraser Valley). Yes, the cost of fuel ($ per barrel) is rising and will almost surely continue to do so. More grist for the “epicenter” mill? Plateauing in parts of the North Shore is evident but on average it seems that CMHC’s prediction of just under 10% rise for Greater Vancouver in 2008 (and probably the 5% for 2009) is a likely scenario. Remember this is an average arrived at by adding the Langleys, Deep Coves and Dundaraves etc of our local world and dividing by the number of sales. Will some areas outperform others? I’d be amazed if all went forth in “lock step”.

Now the 5 month 2008 figures vs. the same period last year - North Van detached homes sold down 15% from last year, attached (t/homes) down 7% and apartments down by 13% from ‘07. Detached average prices +18% and inventory now up by 70%. Average prices up 12% (t/hse) and up by 16% (apts). Inventory (t/hse) 65% higher than ‘07 and (apt) up from ‘07 by 91% - both of these continue to be affected by slower absorption of new construction. While there is still evident demand, this should lead to a tempering of sales prices – plateauing.

In West Van, detached number of sales has dropped by 12% from ‘07. Average price up 8% and inventory now up 69% over ‘07. On the condo side – attached (t/hses) sold are up by 10% from 2007; average price up 2% YTD. Active listings have now jumped 43% over last year. Apartments reflect 76 sold vs. 84 by May ‘07; with average price up 13% from ‘07 and active listings up 8% from ‘07. North Shore demand is still evident with inventory 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 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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