experts: real estate column Thursday, December 18, 2008

Breathing Out and Breathing In

The $64,000 question is, of course, when (and how soon) will demand recover?

By Alan  Skinner

As I commence composing this month’s Update (and the final edition of 2008), I am gazing at the REBGV Average Price graph for Jan 1977 to Nov 2008; you know, the one that has appeared frequently in the newspaper and in articles (and advertisements exhorting people to become home owners – until earlier this year, that is!). View at alanskinner.com/vangraph. It is created by placing a “pin prick” on the graph each month which represents the average price of all detached, attached and apartments sold in that specific month. As is the nature of graphs, a squiggly line appears by “linking the dots” much like that on a patient’s chart at the foot of a hospital bed. Since earlier this year (I’ve heard theories ranging from Jan to May ’08 as the “height of the market”) this jagged curve has been falling, representing higher supply and lower demand, or, as one commentator stated – those on the selling side who have to sell and those on the buying side who can buy at their price. The point being that nobody really “has to” buy. The “softer” demand is borne out by the fact that, in Greater Vancouver, the total number of sales Nov ’07 to Nov ’08 dropped by 70% (i.e. to 874 during this past month). The clear message to sellers continues to be “if you have to sell in the short term (with minimal evident demand) accept a lower, and declining, sales price”. If one can, “wait and see” with an anticipated recovery of demand that may well be to their advantage. The $64,000 question is, of course, when (and how soon) will that demand recover? Could today’s unhurried seller become tomorrow’s (or next quarter’s) frantic seller? Either way it augers well for those seeking enhanced affordability and, yes, those seeking a great deal.

As this year coasts to a quiet close, I reiterate a previous injunction - potential sellers seek advice from an experienced Realtor on when to sell (and at what price to list the property) and potential buyers do likewise with a heightened emphasis on an experienced negotiator to pin down that “great deal”. Please note, no Realtor can make you buy or sell – you must have the confidence that your decision is the right one for the times.

Now to the 11 month YTD 2008 figures vs. 2007 - North Van detached homes sold down 27% from last year, attached (t/homes) down 31% and apartments down by 34% from ‘07. Detached average prices +9% and inventory now up by 138%. Average prices up 5% (t/hse) and up by 5% (apts). Inventory (t/hse) 179% higher than ‘07 and (apt) up from ‘07 by 32%. This relatively high inventory and low demand will continue to keep sales prices down.

In West Van, detached number of sales has dropped by 37% from ‘07. Average price up 7% and inventory now up 72% over ‘07. On the condo side – attached (t/hses) sold are down 15% from 2007 at 49 vs 58 units; average price down 13% YTD. Active listings are down from last year (35 vs. 38). Apartments reflect 129 sold vs. 197 by Nov ‘07; with average price up 4% from ‘07 and active listings up 101% from ‘07. Overall North Shore demand is sluggish with inventory significantly higher than 2007. Yes, folks, the average prices YTD ’08 vs. ’07 are still up in all segments except for the “small sample” t/hses in W/Van. With this few actual sales to compare we are far more prone to anomalies such as possibly fewer “luxury units” changing hands in these lower demand times. Note that I continue to report, as I always have, on average YTD prices – while this softens the impact of recent price slippage, it does show the longer term price picture. This was equally important during the rampant “up-cycle” we left some 7 months ago.

Now, as we approach the Season, it is once again the time to embrace our families, give thanks for our blessings, and some extra cheer to strangers in need. Thanks to all my friends, colleagues, clients and acquaintances for your support, feedback and for reading my monthly missives! To all, stay safe and keep warm in your abodes... ‘til 2009.

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

Related Links:

Alan Skinner

REBGV Average Price graph for Jan 1977 to Nov 2008

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