Data firm finds lower sales, slower price gains, but ‘no panic’
Derrick Penner
Sun
It’s a buyer’s market in real estate around British Columbia, according to a new Landcor Data Corp. report, although company president Rudy Nielsen reckons buyers are just sitting on their hands for the time being.
Landcor tracked lower sales and slower price gains in most markets around the province to the end of June. The median prices of some home types dipped into negative territory from the first to the second quarter, Landcor found.
“I’m not an economist,” Nielsen said, “but it seems everybody is sitting right now on their money, sitting back to see what’s going to happen [with the market].”
Looking at the numbers, Nielsen said “the main thing we found in this report is there’s no panic [in the market].”
Landcor counted 64,268 property sales recorded by B.C.’s land-title registry office to the end of June, which was down just over 15 per cent from sales in the first half of 2007.
That counts more than the Multiple Listing Service sales figures, which are reported by real estate boards and tend to get wider circulation.
Landcor’s report, however, shows that sales in the second quarter — 36,612 — showed a steeper decline of 19.5-per-cent decline.
The median price tracked by Landcor across B.C. was $417,780 in the second quarter of 2008, compared with $414,794 in the first quarter, and $380,018 in the second quarter of 2007.
“To me, that’s a positive,” Nielsen said of the median sales figure, which indicates people haven’t lost a lot of equity in their properties.
There are areas, however, where those median prices — which reflect the point at which half of prices are above and half below — slipped between the first quarter and second quarter.
In the Fraser Valley, while median townhouse prices remained even from the first quarter to second quarter, and detached home prices advanced $5,000 between quarters, condominium prices slipped almost four per cent.
The median Fraser Valley condo price, $235,000 in the first quarter, declined to $226,000 in the second.
In Greater Vancouver, condominium apartment prices also slipped, but almost imperceptibly, from $336,500 in the first quarter to $336,000 in the second quarter.
In the Okanagan, Landcor found it was median townhouse prices that fell, by almost three per cent to $320,450 from the first to the second quarter.
“There is a lot of inventory on the market [in the region],” Nielsen said. “Buyers can pick and choose what they want.”
Nielsen added that the picture is the same on Vancouver Island, where the median condominium price slipped by 3.5 per cent to $275,000.
The Landcor report also showed that fewer out-of-province buyers were active in the B.C. market in the first half of the year.
Albertans, the biggest group of non-resident buyers, bought 1,320 B.C. properties in the first half of 2008, down 21 per cent from the first half of 2007.
Americans, although a much smaller buying group, showed a steeper decline. Americans bought 127 properties over the first half of 2008, a 40-per-cent drop.
U SAID
Vancouversun.com readers had a lively debate about the housing price story in Thursday’s Vancouver Sun. Here’s a sample:
Wait one more year and it will be more affordable to purchase a house in Greater Vancouver.
Not surprised one bit about the drop in sales.The majority of people out there are either single or divorced. They earn roughly an average salary of $60,000. Based on those numbers, the closest that they can come to purchasing a home is somewhere near the $350,000 mark unless they purchase together. So how is someone suppose to afford a home that is over $375,000 if the bank will only approve them for anything less than $350,000 based on a salary of $60,000 a year? If you want to see some real sales, start marking the houses down and stop gouging people. Better yet, stop whining that you can’t sell your house because you can’t find a buyer.
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The buyers are not from Canada. It’s still a bargain to buy in a safe, stable country like Canada. Until Canada stops allowing foreign investors to buy freehold it will be the same. New Zealand and Mexico have a “lease” of sorts to be able to own. The government needs to start taxing offshore investors.
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Property has had a fall and hopefully it will not continue to the same degree in the U.S. I am a property owner in Vancouver and do not wish to see the fall, but I wish people would stop with the “I told you so.”
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I told you so! I’ve been calling this downfall on forums and blogs since 2005 and wasn’t in a position to buy earlier than that, when it made more sense. Please don’t give us this hindsight is 20/20 garbage. The current value of your home is a vapour number based on distortions and misallocations in the economy and now it will drop down to reality.
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I guarantee prices will be at least 50-per-cent higher in 10 years. All the naysayers do is look at week-to-week or month-to-month statistics. All the people that do make money off real estate do not care about this stuff. I bought several units in downtown Vancouver two years ago, and they have gone up 50 per cent. Who cares if they go down 10 per cent?
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Wow, look at all the bitter people. It isn’t too hard to pick out the people who aren’t smart enough to invest in real estate or are just bitter at the people who ARE able to invest.
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The downward cycle is just beginning. The perfect storm is forming for a crash. Slowing economy, stubborn inflation, record inventory and slowing sales. Why would anyone buy now?
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Sell everything if you can! I’ve sold both my rental properties and am in the process of selling my main residence on acreage. If these prices fall drastically as expected, my mortgage would end up being greater then the value of my properties and I would go bankrupt. Now I’m going to try to buy back these assets cheaper.
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This is just the beginning of the down times. In two years, the prices will drop a minimum of 50 per cent or more, the economy is in really bad times, and it is 1930 all over again.
