experts: real estate column Friday, June 15, 2012

Like the bus, eventually the cycle arrives

The stages of the cycle are natural and all should be accepted as normal parts of healthy markets.

By Alan  Skinner

My talk of cycles in last month's Update sparked some response and comments which again put me in mind of the Blood, Sweat and Tears hit "Spinning Wheel". The oft postulated "what goes up must come down" like the pendulum is believed by some to imply the Physics law of an equal and opposite reaction. Far from it here on the 'sunny' (?) North Shore. To explain my viewpoint we need only to revisit the tenets of Supply and Demand. A quick aside here I do wish that the popular press and various other commentators would let go of the notion - rising average prices, GOOD flat or any decline in prices, BAD. The stages of the cycle are natural and all should be accepted as normal parts of healthy markets. I guess that drama is more exciting when selling a position. Back then to "boring" supply and demand. Supply, as in number of properties for sale at any given time, is certainly up markedly on our North Shore (N/Van particularly with all categories over the number of units offered at the end of Apr 2011). Fact is, however, we have an "improved selection" of homes for sale now. A good proportion of these are, admittedly priced a little higher than the market is comfortable with. Demand too, has apparently reduced; the evidence being (again N/Van figures) the May '12 fact of (in houses and t/house categories, between 8 13% fewer sales vs. May '11. Apartments are the contrarian with 7% more sales YTD than May '11. I use the term "apparently" as we are seeing a fair level of interested buyer activity in the market despite the obvious drop in number of offers being made. Seems some price reductions are sought for in the former two categories.

This cautious nature of the "interested buyer" is not surprising but does not by any means indicate that that group has "all packed their tents and are heading off for protracted summer holidays". In the same vein, I believe that we on the North Shore are not yet truly into the "buyers' market" alluded to in the official press release of the Real Estate Board of Greater Vancouver. This we cannot really claim until (and if) prices moderate somewhat and average prices show a reduction. [Only W/Van apartments show a lower average (8%) on significantly fewer sales (and small sample size)]. This we have not yet seen see stats following. To sum up, what we are experiencing is that Buyers are cautious and wannabe Sellers are likely regretting not having put their properties on the market 3 or more months ago. Indeed, we can bet that many of the unsuccessful Sellers who listed in the 1st quarter of the year regret they listed at the price they did.

An exciting new addition (for those who relish actual results number of homes sold, average price and inventory).I will be forwarding the past 12/13 month trend for both N and W/Van. If you are interested in what price ranges are selling and which are not, you will love this!

Now to the summary of our North Shore results. North Van detached homes sold are down 'year to date' by 8% from this time last year, attached (t/hses) sold down 13% and apartments up 7% from 2011. Detached - average price is 5% higher than 2011 and inventory May 31st, 2012 up 17% from 2011. Average prices up 6% (t/hses) and up 5% (apts). Inventory (t/hses) up 25% from May 31st, 2011 and (apt) up 6% from 2011. N/Van overall inventory at May 31st, 2012 is up13% over 2011 and all categories in N/Van, down 4% in total sales '12 vs. '11.

In West Van, detached number of sales to date 2012 is down by 43% from last year. Average price up by 11% and inventory May 31st, 2012 up 19% from last year. On the condo side - sales of attached (t/hses) are up, at 44 vs. 30 units; average price is now 12% higher. Active listings from May 31st, 2011(50 vs. 33). Apartments sold are down from 2011 (110 vs. 83), with average price 8% lower than' 11 (remember the small sample size) and active listings up 20% from May 31st, 2011(117 vs. 97). Overall 22% higher inventory with softer demand evident particularly detached properties. Some 37% fewer units sold YTD vs. 2011.

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 those wishing to get 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:

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