experts: real estate column Thursday, October 09, 2008

The Supply/Demand Dictatorship

We know we live in a democracy, but not everybody realizes that there is a tyrant (?) - depends which side you're on - that dictates our lives.

By Alan  Skinner

We know we live in a democracy, but not everybody realizes that there is a tyrant (?) – depends which side you're on – that dictates our lives. Obviously, my old "hobby-horse", embodied in the term 'willing seller/willing buyer' is that of which I speak.

Say, for a minute, the Supply side represented by potential sellers, got together and said ... buyers (Demand side) are not appearing confident to make the decision to buy. Therefore it makes sense to take our homes off the market (or not add them to the supply pool). But, I hear you say, that is not realistic as so many of us really want to (need to) sell. Precisely my point! Now, and this is not meant to be facetious; Sellers, realize that it is your collective wants and needs that will cause prices to drop. Supply must decrease or the confidence of the buyers must be restored. We do know that a very large part of that “damage” can only be repaired by the actions of our neighbours to the south. Just how long will that take??

BTW this is what has actually happened to inventory (homes for sale) Aug 31/08 to Sept 30/08.
N/Van – Detached +26%; Attached +25%; Apartments +16%
W/Van - Detached +12%; Attached +09%; Apartments +11%

The Vancouver Sun (Oct 1st) quoted a report by Benjamin Tal, economist for CIBC World Markets, as follows, “over the past six months it has gone from being a hot seller’s market to a more balanced market .... projecting that over the next few months it will correct further into a buyer’s market, something not seen in Canada since 1995”. “A mere five to seven per cent drop in prices from current levels should bring the national average back to equilibrium ... That’s a mere fraction of the 25 per cent overshooting in the U.S. by mid-2009”.

Just a quick comment on price trends. I consistently use average price, comparing year-to-date with that of the previous year. This I believe is the most readily understood statistic although many other analyses can be done; median price, mean price, price index changes etc. Average price is not perfect as it can be distorted by small sample size e.g. a month in say W/van [two duplexes sell -$650k & $950k -> $800k average] and then the next month [one $1.2mm duplex sells]. Has the market price really jumped by 50%? – obviously not. Note too the YTD average dropping gradually.

Here now the nine month 2008 figures vs. 2007 - North Van detached homes sold down 23% from last year, attached (t/homes) down 25% and apartments down by 29% from ‘07. Detached average prices +12% and inventory now up by 92%. Average prices up 7% (t/hse) and up by 10% (apts). Inventory (t/hse) 111% higher than ‘07 and (apt) up from ‘07 by 85% - both of these still affected by slower absorption of new construction. While there is some demand, this inventory will continue a softening of sales prices.

In West Van, detached number of sales has dropped by 33% from ‘07. Average price up 6% and inventory now up 67% over ‘07. On the condo side – attached (t/hses) sold are somewhat equal to 2007 at 46 vs 47 units; average price down 12% YTD. Active listings are now up marginally over last year (45 vs. 44). Apartments reflect 113 sold vs. 161 by Sept ‘07; with average price up 7% from ‘07 and active listings up 47% from ‘07. Overall North Shore demand is sluggish with inventory higher than 2007. Do note the changes from last month as shown in the 3rd paragraph. I will continue to track this significant statistic.

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 to and you’ll be assured receipt; phone me at (604) 988-7368 or visit Feel free to forward to a friend.

E-mail this story to a friend    Print this story   Save This Page to

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

Related Links:

Alan Skinner

Related Articles:

Have you tried these JUROCK.COM FEATURES?



Subscribe To Our Newsletter

Check out this week's Jurock Real Estate Insider Special deal


Gibsons waterfront


Don't Worry About Greece ... Worry About The EU



   Privacy | Security | FAQ | Site Map | Masthead
Contact Us   
Copyright © 2014 Jurock Publishing Ltd. All rights reserved