experts: real estate column Friday, June 11, 2010

What is a "Buyers' Market"?

And then a recommendation based on a proposition

By Alan  Skinner

It may seem to the casual observer that a buyers' market is one in which potential buyers decide not to buy. And a sellers' market is one in which "lemming" buyers feel the uncontrollable need to buy (because everyone else is). Can we conclude that decisions are so much easier when we see many others around us doing something and feel it must be a good decision (in this case "to buy" or "not to buy") - a kind of Hamlet dilemma.

Much has been written/discussed regarding the 'anti-cyclical' decision. Who has not heard/read of the frenzied market action before a major downturn in both stock markets and real estate markets and, yes, we've all said "I guess that makes sense". However, when it comes to making the decision to buy in one of these "soft" - buyers' markets, we invariably work on the notion - "I guess there must be something that the myriad 'non-buyers' know that we don't know". Happy, self assured people make decisions - by definition, unpleasant news does not breed 'happy people'. One thing is absolutely for sure - we cannot accurately predict peaks and we cannot accurately predict valleys. We can sit on the sidelines and wait until the market is showing gains and then compete with the "confident" buyers. This group will ALWAYS pay more that the buyer who competes with the smaller group (the mere handful) who are looking for deals (bargains) in high supply, low demand times. Think about it.

My recommendation (after almost 19 years of real estate sales experience AND 18 years in finance) is - find an experienced Realtor whom you consider trustworthy and get their advice on these market cycles that they have seen before! This is not intended to be self serving - it does not have to be me ;).

Now, a proposition that I have stated before. B.C. and Greater Vancouver in particular, are markets at the higher end of world desirability. Canada is a stable country; we in the West have great potential; we have the mildest climate in the country and are arguably the most beautiful province (just ask Conde Nast); we are an envied nation; comparatively, crime is low; we have a higher tolerance for fellow human beings; we are an accepting people. Ergo, other people on this planet (and many in other parts of Canada) would love to live here. What part of DEMAND do we not understand? We are a relatively small region (Vancouver in particular) - what part of "limited" SUPPLY do we not understand? View all this in light of the annual Mercer and other "most livable city" reports and .. conclusion?

Now the May 2010 YTD figures for our North Shore. North Van detached homes sold are up by 15% from the same period of the previous year, attached (t/hses) up by 24% and apartments up by 27% from '09. Detached average prices up 18% and inventory May 31st, up by 50%. Average prices up 15% (t/hse) and up 18% (apts). Inventory (t/hse) 2% higher than '09 and (apt) up 24% from '09. N/Van inventory is significantly higher than 2009.

In West Van, detached number of sales is up by 58% from '09. Average price up by 21% and inventory May 31st up by 18% from '09. On the condo side - attached (t/hses) sold are up from 2009 to 36 vs 11 units; average price up 65%. Active listings are up from May 31st (55 vs. 41). Apartments reflect 73 sold vs. 55 during '09 - a 32% increase; with average price 33% higher than '09 and active listings up 11% from May 31st 09.

Demand is dividing into two categories - those making decisions to buy and take advantage of the opportunities out there and those choosing to move their demand to a future "pent up" position i.e. defer the buying decision. As we see this higher number of new listings coming on the market we know we will see a period of levelling (and lower) prices. How many will recognize this as an opportunity?

Again, visit my website to see and "hear" the new developments. I continue my commitment to keep you... www.OnTopOfTheMarket.ca - 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




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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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