UrbanWorkbench has changed location, and we are now broadcasting over the interweb tubes from Langley, B.C.
Having made, in the eyes of most aspirational Canadians, a backward move from home owners to renters, I can say we are most pleased with our decision, particularly with our move to the lower mainland factored in. Despite assurances from the real estate talking heads that we should be lining up to buy a house in North Vancouver at an average bargain price of a cool $1.1M, we are not convinced this is a smart move:
The price of a “standard” two-storey house in Vancouver and on the north shore jumped 10 per cent to $1.1-million in the first three months of 2011, according to research last week by real estate agency Royal LePage. The figure puts the city at triple the national rate for a typical two-storey residence – an average of $379,000, up 4 per cent in the past year.
It is hard to know what the real cause of the push for higher prices has been, or whether it is a bubble waiting to pop or not, but these are some MLS stats quoted on a website that has no reason to “pump up the jam” the way that many realtors do, “it’s always a good time to buy!”
The Richmond market, ground zero for China frenzy, has died.
- Listings have exploded. The number has more than doubled since the beginning of March (going from 400 to 850).
- Sales have collapsed. In February, 250 properties sold. In March, sales were 260. In April, it looks like 120 – down 52%.
- Inventory is swelling. In February there were enough homes listed to last 1.5 months. That has suddenly shot up to 7 months.
And even on the west side of Vancouver, where ugly boxes built 40 years ago were overrun during open houses and have been selling for $1.3 million, sales volumes have just plopped by 30%. Across the entire Van area, it looks like sales volumes will be lower in April by 20%. So much for the Spring market.
Source: The Greater Fool – It’s Over
Here’s an assessment of the affordability and outlook of the Vancouver market from the same post on the Greater Fool:
It now takes more than 70% of gross household income to carry the average Vancouver property. Across Canada, it’s almost 50%. Factor in rising interest rates (the next Bank of Canada announcements are May 31 and July 19), higher taxes (that happens after May 2nd), an economy drop-kicked by a $1.05 dollar, structural unemployment and flatlined wages, and there are no economic fundamentals supporting the housing market. Only hormones. Media drivel. Marketing dinks. Delusion. Public hysteria. Your idiot father-in-law. And Chinese. It’s over.
So while we celebrate the fact that we walked away from a property we’d owned for four years with our pants still on, we watch the media (that has turned home improvements and real estate prices into a facsimile of news) continue to find people to talk up real estate. Have you considered just how much money is raised from the real estate focus specials and house for sale ads in the printed media? Might that have something to do with the message being promoted?