How soon will the housing demand recover
The Soft Gooey Centre Of A Cycle – The $64,000 question is, of course, when (and how soon) will demand recover?
Alan Skinner
Other
As I commence composing this month’s Update (and the final edition of 2012), I am gazing at the REBGV Average Price graph for Jan 1977 to Nov 2012; you know, the one that has appeared frequently in the newspaper and in articles (and advertisements exhorting people to become home owners – until earlier this year, that is!). (To view the graph visit http://rem.ax/TSsQR4)
It is created by placing a “pin prick” on the graph each month which represents the average price of all detached, attached and apartments sold in that specific month. As is the nature of graphs, a squiggly line appears by “linking the dots” much like that on a patient’s chart at the foot of a hospital bed. Since earlier this year (I’ve heard theories ranging from Feb to May ’12 as the “height of the market”) this jagged curve has been falling, representing higher supply and lower demand, or, as one commentator stated – those on the selling side who have to sell and those on the buying side who can buy at their price. The point being that nobody really “has to” buy. The “softer” demand is borne out, in our neck of the woods, by the fact that the total number of sales on the North Shore Nov 2011 to Nov 2012 dropped by 28% (i.e. from 3723 to 2702 by the end of this past month). The clear message to sellers continues to be “if you have to sell in the short term (with minimal evident demand) accept a lower, and declining, sales price”. If they can, “wait and see” with an anticipated recovery of demand, that may well be to their advantage. The $64,000 question is, of course, when (and how soon) will that demand recover? Could today’s unhurried seller become next quarter’s frantic seller? Either way it augers well for those seeking enhanced affordability and, yes, those seeking a great deal.
With this year coasting to a quiet close, I reiterate a previous injunction – potential sellers, seek advice from an experienced Realtor on when to sell (and at what price to list the property) and potential buyers do likewise with a heightened emphasis on an experienced negotiator to pin down that “great deal”. Please note, no Realtor can make you buy or sell – you must have the confidence that your decision is the right one for the times.
Now to the 11 month YTD 2012 figures vs. 2011 – North Van detached homes sold down 21% from last year, attached (t/homes) down 23% and apartments down by 12% from 2011. Detached average prices +5% and inventory now up by 45%. Average prices up 2% (t/hse) and up by 1% (apts). Inventory (t/hse) 55% higher than Nov 30th 2011 and (apt) up from the same date by 7%. These relatively high inventories and soft demand will continue to keep sales prices level.
In West Van, detached number of sales YTD has dropped by 48% from 2011. Average price up 6% and inventory up 25% over Nov 30th 2011. On the condo side – attached (t/hses) sold YTD are up 5% from 2011 at 63 vs 60 units (townhomes being the only contrarian). Active listings are up year over year from Nov 30th 2011 by 64% (51 vs. 31). Apartments reflect 151 sold YTD vs. 198 by Nov 30th 2011; with average price down 12% from Nov 30th 2011 and active listings up 67% from Nov. Overall North Shore demand is sluggish with inventory significantly higher than Nov 30th 2011. Yes, folks, the average prices YTD 2012 vs. 2011 are still up in all segments except for the “small sample” apts in W/Van. With this few actual sales to compare we are far more prone to anomalies such as possibly fewer “luxury units” changing hands in these lower demand times. Note that I continue to report, as I always have, on average YTD prices – while this may soften the impact of recent price slippage, it does show the price picture over the longer term. This was equally important during the rampant “up-cycle” we left some 9 months ago.
The ‘SnapStats‘ (what price ranges are selling and which are not) is being extremely well received. I am now forwarding the past 12 month trend for not only N and W/Van but including ALL available metro neighbourhoods, as many were requesting. Just fire off an e-mail to me at [email protected] asking for SnapStats. If any locations are not of interest, please ignore those areas.
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” and SnapStats – send a request now to [email protected] and you’ll be assured receipt; phone me at (604) 988-7368 or visit www.OnTopOfTheMarket.ca
Now, as we approach the Season, it is once again the time to embrace our families, give thanks for our blessings, and some extra cheer to strangers in need. Thanks to all my friends, colleagues, clients and acquaintances for your support, feedback and for reading my monthly missives! To all, stay safe and keep warm in your abodes… ’til 2013….
Copyright © 2012 Jurock Publishing Ltd.