Vancouver Real Estate Market Slowing

[SethM]

[robert james]

Well,,that is certainly good news,, there will be no pressure to sell in Vancouver because of all the wealth.. Thanks for the laugh Tsur !!!! Time to warm up those helicopter engines..

[vanpro]

Reporter ends w/ the common refrain "no pressure to sell". Then why are sellers reducing prices (earlier in the story he said 1 in 5 listings have reduced prices)?

[robert james]

It might be an idea for someone to tell Tsur that Home equity lines of credit is not considered to be wealth.. Vancouver must be the only place on the planet that could possibly believe that..

[jesse1]

No pressure to sell... well that explains the low volumes. Oh my this is so NOT like any of the US bubble cities in 2006-07

[fishguy15]

Oh my this is so NOT like any of the US bubble cities in 2006-07

So true...it's different here.

[SethM]

This blogger had some interesting comments on this Global story:

http://tinyurl.com/Whisperslowdown

If you are new to reading blogs which focus on the Vancouver or Canadian Housing Bubbles, you probably aren't aware of the complete distain many in the community have for the uncomfortable relationship that seems to exist between those work in the real estate industry and the mainstream media.

Critics pinpoint advertising dollars as the foundation of what appears to be a symbiotic relationship between the two and complain the media isn't giving the Canadian public a proper, critical view of the dangers - or existence - of the growing real estate bubble.

Worse... critical media is subjugated and transformed into nothing more than a public relations arm of the real estate industry.

And when it comes to television, no one station seems to epitomize that corrupt relationship to the critics like Global TV.

Bearish Real Estate blogs rail against the fluff pieces that Global TV seems to generate.

In fact, when it comes to Real Estate stories, Global always seems to be the ultimate optimist.

Like the man who is finds himself standing in horse sh*t up to his waist - Global TV is the station that looks around and proclaims, "Gee... there must be a pony around here somewhere!"

This belief is hammered home by a story which aired earlier this week.

Unable to ignore the impact of market conditions, Global TV starts off it's latest examination with hard facts that would have most in the Real Estate 'bear' community believing Global is finally presenting a balanced picturet:
Vancouver Real Estate had defied trends and showed steady growth for far longer than anybody believed possible. The evidence is not in the polls, which very often contradict one another, but on the ground, in the neighbourhoods where plum properties have always sold quickly and at a profit.

Sellers are finding the days of multiple, over-asking offers have disappeared. At least in the condo market. And buyers are getting the pick of the crop with buyer reduced signs popping up all over the place.
A real estate agent takes the Global reporter to several upscale apartments in choice Vancouver neighbourhoods and highlights their desirable selling points. Viewers are then told the units are being reduced in price, an action completely unheard of through most of our ballooning housing bubble.

The take on the situation from the realtor?

"If you want them (condo's) sold, you have to reduce."
This view is identical to the one we shared with you yesterday from Richmond realtor James Wong. And the Global TV reporter summarizes the real estate situation in Vancouver succinctly:
It seems to be a growing trend in Greater Vancouver. Drop you asking price to get results. With listings up over 15%, and sales down by the same amount from May this year to last year, 1 in 5 sellers have reduced their price.

What's different is the frenzy created with the flood of Asian buying has cooled.
Global rounds out the state of the current market by next showing you that even single family houses are seeing prices slashed.

But it's at this point where Global seems to change direction - dramatically.

Sales are down, listings are soaring, realtors are saying if you want to sell you must slash your prices. A declining market, right?

Not according to the real estate industry... err, Global TV.

Global trots out their favourite apologist, Tsur Sommerville. And suddenly Global TV makes the case that Vancouver is different. And that the fundamentals of the market simply don't apply here:
Sommerville: Now we have a situation where prices aren't rising, they're flat. We have a situation were listing are rising, sales are falling and there isn't any of the kind of angst or anxiety out there in the marketplace. Instead what it's replaced with is less worries about people driving prices up and more worries about Greece blowing up the world economy.

Global Reporter: Vancouver is that market that is way different than any other kind of market.

Sommerville: Vancouver is very hard to figure out because so much of the purchases are done by wealth. Either people immigrating with wealth or people receiving wealth from parents or relatives so the normal 'what are incomes doing and what are prices doing', that just doesn't work out here well.

Global Reporter: And that may explain that while there are price reductions, average selling prices just aren't going down. Unlike other depressed markets in the world, there's no pressure to sell. And with our geography, the mountains and the ocean, it's not likely to change.
Did you catch that?

Global TV slips in that ours is now a 'depressed market'.

Then they quickly gloss that over by saying that we're "unlike other depressed markets", that ours is different. Then they imply that the inevitable outcome for depressed markets won't happen here.

What drives observers crazy is that it's not Sommerville, a supposed expert, making these statements.

These are the conclusions of the Global reporter.

It's as if Global is trying to reassure the market instead of reporting on what's going on in the market (and possibly triggering panic).

Is it balance reporting or manipulative massaging of the facts?

When Global TV puts out pieces like this, and makes these types of conclusions, few in the blogosphere think 'balanced' even enters the vocabulary.

[jesse1]

And that may explain that while there are price reductions, average selling prices just aren't going down

It may but is unlikely. It doesn't matter how many "wealthy" people have previously bought, they won't be the ones setting the marignal price. Prices were sticky downwards even in the most catastrophic areas of the US, which is why inventory balloons and sales shrink -- the market is saying that the price needs to be lower to fill the bid.

[Taipan]

And as an outsider, I couldn’t believe the level of propaganda and brainwashing that was going on between the industry, and media and assisted by a government which put in place the mechanisms for the bubble.

As an aside to Mr Sommerville. If it’s different here, why did the Teranet index increase for all major urban areas across Canada starting in around 2003? Trouble is that Vancouver while increasing at a similar rate, doesn’t have the underlying income to justify the prices.

[tdma800]

Things are different here, its a legal fact, in particular there's no possiblity of going to jail if you don't vote and any person can purchase a piece of property no matter where he or she is from and no matter which passport the person holds.

[timber2012]

And as an outsider, I couldn’t believe the level of propaganda and brainwashing that was going on between the industry, and media and assisted by a government which put in place the mechanisms for the bubble.

As an aside to Mr Sommerville. If it’s different here, why did the Teranet index increase for all major urban areas across Canada starting in around 2003? Trouble is that Vancouver while increasing at a similar rate, doesn’t have the underlying income to justify the prices.

After a while you just get used to it. We used to have a show called RealtyTV where they would essentially advertise the realty industry for a half hour under the pre-text of it being a reporter type show. The host would interview real estate "experts" (that's the favorite term to describe someone who has no credentials) and nod her head approvingly as these "experts" said the most illogical things.

Now we just have news stories about lineups at condo openings that apparently sell out within hours - and are suddenly available again days later. Or Asians in helicopters. Or mortgage rates going up or down and it's a great time to buy.

[jesse1]

I couldn’t believe the level of propaganda and brainwashing that was going on

I can assure you, from what I've observed, any brainwashing and propaganda were wholly unnecessary for this bubble to occur.

[robert james]

Even the Vancouver Sun is turning on the real estate industry.. http://www.vancouversun.com/business/bu ... story.html

[jesse1]

Even the Vancouver Sun is turning on the real estate industry

A proverbial warning shot across the bow of the Sun's advertising clients. I guess housing isn't the only thing that's not selling!