experts: real estate column Saturday, May 11, 2013

Approaching a balanced market again?

Overall North Shore demand is up a little over the last quarter of 2012.

By Alan  Skinner

The purchase and sale of coal, orange juice, Royal Bank shares or residential property involves folks (producers or current owners of the commodity) who desire to dispose of some or that entire commodity and other folk who want to acquire some, interacting with each other. They decide upon a price acceptable to both parties and then trade the money for the commodity.

That price rises or falls depending on the intensity or weakness of the demand of the buyer and the motivation of the seller to dispose of the commodity, with the emphasis on the supply (abundance) of that commodity or other forms of that commodity. An example of "other forms" could be garden furniture made of wood or cast iron. In Real Estate we know these "other forms" as detached homes, condo apartments, townhomes, mobile homes etc, etc. These transactions all take place in specific "markets".

A "balanced" market is simply one where neither the buyer nor the seller has the upper hand by being able to force prices upwards or downwards with ease. In the real estate market, the past year or so has seen the buyers doing just that by their inaction or only offering a lesser consideration than the seller had requested. If a sale is to occur, a portion of the sellers would have to agree to lower their expectations. This is sometimes described as a willing seller adjusting to the lower level offer of the willing buyer. The market can be said to be balanced when the expectation of the seller and that of the buyer are close together and the "tension" in the market is low.

Reversing cycles are inevitable truisms of all markets with few exceptions. One notable one did occur when photography turned predominantly digital and the demand for silver, an important part of the negative print process, dropped significantly. Only when human beings learn to live without shelter, especially in the higher latitude countries, need we start to worry about overall demand for homes plummeting. The apparent oversupply of condos has, to some extent, fueled concerns regarding retention of value. This has exacerbated the delusion of continually falling prices. Just as delusional as continually rising prices that existed some years ago!

Now to the 'Year to Date' figures for 2013. We now have the first 1/3rd figures 2013 vs. 2012. A little more of the statistical information that will help "define" our current year. North Van detached homes sold, down 9% from last year, attached (t/hses) down 10% and apartments down by 26% from 2012. Detached average prices virtually unchanged and inventory now up by 43%. Average prices down 2% (t/hses) and down 2% for (apts). Inventory (t/hses) 8% higher than Apr 30th 2012 and (apt) down from the same date by 6%. The numbers here now reflect the activity in 4 months and these figures are starting to become more meaningful to indicate a trend.

In West Van, detached number of sales for 2013 has dropped by 29% from 2012. Average price of what has sold is virtually unchanged and inventory up 23% over Apr 30th 2012. On the condo side - attached (t/hses) sold 2013 are down 37% from 2012 at 20 vs. 32 units (a 9% drop in average price). Active listings are up year over year from Apr 30th 2012 by 28% (56 vs. 42). Apartments reflect 49 sold in 2013 vs. 64 by Apr 30th 2012; with average price up 5% from Apr 30th 2012 and active listings up14% from Apr 30th 2012. The sample size remains too small for meaningful analysis. Overall North Shore demand is up a little over the last quarter of 2012 with overall inventory climbing since Jan 1st 2013 (exception - N/V apts at 6% lower). With this few actual sales to compare we remain prone to anomalies e.g. possibly fewer "luxury units" selling in these lower demand times. I continue using average YTD prices which will become more meaningful as we get more months' stats to compare.

'SnapStats' (what price ranges are selling and which are not) is being very well received. I'm now forwarding the past 12 month trend for not only N and W/Van but ALL available metro neighbourhoods, as many w requested. If any locations are not of interest, please ignore those areas.

So, 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 N/S R/Estate analysis and jump-off point for FULL market information.

Join those wishing to get the e-mail version of the "update" and SnapStats - send a request to alanskinner@shaw.ca; phone (604) 988-7368 or visit www.OnTopOfTheMarket.ca and you'll be added.




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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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