experts: real estate column Tuesday, September 14, 2010

Why Can't We Just Refer To Cycles?

Realtors share the same hope of all current home owners that our "most valuable asset" not diminish in value and hopefully grows over time.

By Alan  Skinner

The majorly alarmist "Canada's Housing Bubble – an accident waiting to happen" presented in late August by David Macdonald of the Canadian Centre for Policy Alternatives [CCPA] (a left leaning "think tank") – (yes D.R., it's only because of you that I read every word of this 24 page opinion piece). I'm glad I did (see - attached), as, the colleague who forwarded this to me, admitted to not having "read it all yet" and being "concerned with ... this kind of negative thinking". I am not as concerned with this opinion (folk from all walks of Canadian life are totally entitled to their opinion – as, happily, am I entitled to mine).

What does concern me is the use of these opinions without an understanding or rather, a questioning of the "stripe" of the author and (political) motivation of the opinion. Yes, folk, surprisingly, I am a Realtor and this concept is very easy for the reader to grasp and attribute a "motivation" to. I will make one comment here – contrary to popularly held belief, I and the majority of thoughtful members of my profession DO NOT promote a fervent conviction of the need or desire for steadily and continually rising prices. Alas, we share only the same hope of all current home owners that our "most valuable asset" not diminish in value and hopefully grows over time. There's a bubble that I have burst!

In this article, terms used, like 'Bubble bursting slowly' could well be replaced with the more widely (and less emotive) 'declining cycle'. But, when we are attempting to focus attention on a specific point of view and rally the "sky is falling" troops – this doesn't quite cut it. Reading further into this piece reveals a (I believe genuine) desire to protect the vulnerable – seen as the "young families that purchased homes with no down payment" and "seniors who can't wait for a decade or so for prices to recover". I, too, admit to being surprised/disappointed by our 'fiscally Conservative' federal government's decision to encourage zero down, 40 year amortization mortgages. I guess that this proves that government doesn't always make responsible decisions, but I do subscribe to the belief that adults have the right to make their own investment decisions and am often appalled at the knee jerk blaming of officialdom when an individual's (hopefully) considered investment decision, fails to live up to the optimistic expectation of that "independent" decision maker. CCPA's emphasis on the "who will be hurt most" angle is kind but a little naοve. The "young family" was not forced to overextend themselves in their acquisition and neither is the "senior who can't wait ... " forced to retain the (expensive?) family home replete with the dollop of market appreciation. While I do not ascribe to the family home as only an "investment", I believe that ignoring the investment (risk) aspect inherent in such an asset is foolhardy. I totally agree with one comment of the CCPA article's author - 'That doesn't mean we have to sit idly by, waiting for markets to finish their recalibrations'. Hear, hear.

At last, the August 2010 YTD figures for our North Shore. North Van detached homes sold are off by 8% from the same period of the previous year, attached (t/hses) down 12% from '09 and apartments down 6% from '09. Detached average prices up 10% and inventory Aug 31st, up by 35%. Average prices up 12% (t/hses) and up 12% (apts). Inventory (t/hse) 37% higher than '09 and (apt) up 24% from '09 N/Van inventory at Aug 31st is still significantly higher than 2009 (but is continuing to drop).

In West Van, detached number of sales is up by 11% from '09. Average price up by 19% and inventory Aug 31st up by 35% from '09. On the condo side – attached (t/hses) sold are up from 2009 to 54 vs. 27 units; average price up 47%. Active listings down slightly from Aug 31st (44 vs. 45). Apartments reflect 110 sold vs. 109 during '09; with average price 18% higher than '09 and active listings up 46% from Aug 31st 09.

While seasonality has something to do with lesser sales volume, I believe that there continues to be a nervousness regarding purchase commitment. I am still a believer that a window exists for buyers who recognize this period as an opportunity for better "deals" than we will likely see later in the year/ early in the next. May we crown our year with a blessed "Indian" summer!

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

Related Links:

Alan Skinner

Canadas Housing Bubble: An Accident Waiting to Happen

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