As mentioned earlier, there were 2,162 new listings in my target area last week, and 792 sales, for a sell/list of 36.63%.  There were 903 price changes. 

Inventory hit 15,734, of which 2,404, or 15.27% were over 90s.

The average list price of sales was $606,465, with average sales price at 592,248, a difference of $14,217, or -2.34%.  Average DOMs was 34. 

There were 86 (10.86%) overlists.  Average list price of overlists was $634,154, with average sales price coming in at $652,594, a difference of $18,440, or +2.91%.  DOMs for overlists was 19.

There were 32 price increases (3.54%/96.46%).    Average original price was $632,083, while average new price was $608,856, a difference of $22,228, or -3.67. Average DOMs to price change was 49.

There were 202 new listings entered on Saturday.  No sales processed.  That’s an overtime shift at the Board due to volume.  I think the staff there do a great job, and coming in on a Saturday to enter data is something they should be commended for (Yeah, yeah, I know, they get paid, but frankly, I wouldn’t do it, so I’m grateful that someone at the Board does). 

My searches are limited to 10,000 transactions.  For the first time that I can remember I exceeded that number in 7 days worth of searching. Let me clarify: in this case a “transaction” is a listing, a price change or a sale.  In the past I’ve exceeded the 10,000 mark when I’ve searched for 14 day averages (some of you will remember 13, 12, 11, or 10 day rolling sell/lists a few years ago - the 10,000 limit was the reason for this).  So, we’re seeing a lot of transactions (”rush to the exits” crowd, that’s your cue).

 There were 2,162 new listings in my target area last week, and 792 sales, for a sell/list of 36.63%.  There were 903 price changes. 

Inventory hit 15,734, of which 2,404, or 15.27% were over 90s.

 WoW keeps asking if I’m ready to say that the market has changed.   I’m not ready to say what he wants to hear (after all, the market is always changing - that’s what it does) but this much is clear: I think we’re getting ready to have the rubber hit the road.  No, I do not forsee a crash.  We’re missing (at the moment) the external negative event that I think would be required (severe economic downturn, severe increase in interest rates, etc), but what has been an easy market for sellers is coming to an end. 

I’ll try to post more detailed data tomorrow.  We’re blessed to live in interesting times, and I suspect those times are going to test some of us in the coming months. 

There have been 1,064 new listings so far this week and  499 sales, for a sell/list of 46.9%. Inventory in my target are reached 15,190, of which  2,358, or 15.52%, were over 90s.

Out of a random sample of 100 new listings (I just started counting from the top) 15 had been on the market in April.  10 of the new listings were price changes, defined as a lower price but the same Realtor. 5 were re-lists, defined as an expired listing period, and a new listing with a new Realtor. Of those 5,  2 came back on the market at higher prices. 

To put the 10 price changes in perspective, multiply it by 3.64 (we had 364 new listings today), and compare that to the price changes (200), of which probably 97%-98% were reductions, meaning we likely had 36 price reductions by way of re-list compared to 196 price reductions by way of price reduction. 

Ari recently wrote that he is unsure of how to buy a house.  After reading the number of horror stories on the blogosphere he finds it tough to trust anyone.

You can’t argue with the customer.  If he says he has trust issues, you have to resolve them. There are two different ways to do that.  One is to mislead, confuse and BS the customer into submission.  The other is to give him all the information he needs to make a decision, and then abide by the decision.   

I prefer the second approach.  As a Realtor I have to be aware that if I give the customer all the information he needs to make an informed decision, he may decide not to buy real estate at all, or he may decide to buy, but may decide to buy through someone other than me.   I prefer that downside to selling someone the wrong property or misleading them.

So, what’s the first step?  There’s a lot of ground to cover, but since we need to start somewhere, I suggest starting with the Agency Disclosure Brochure, known variously as “Working With a Realtor”or “The Blue Brochure.” I’m picking this as a starting point because I believe that most people should use a Realtor to buy or sell property, regardless of how much they know about real estate. To begin with, most people are not well-informed about the process, and so need professional help. This help appears to cost a lot, and a poorly informed consumer isn’t always aware of the value they receive. Understanding agency is the beginning of a solution to this problem. At the opposite end of the spectrum, well informed real estate traders can still benefit from a good agent (and we can discuss how they do that at a later date).

The brochure contains a lot if info, and even if its dry you should read it. The most important part, in my opinion,is the list of agency duties owed by an agent to a principal. This list is not the end of the discussion - it is, rather, the starting point. Take this question, for example: should a buyer’s agent tell a buyer about a possible defect with a property, such as a building setback encroachment or a zoning problem? The brochure tells us that an agent has a duty to exercise reasonable skill and care in performing their assigned duties. It seems fair to say that a buyer could say to an agent Ïf I work with you can I expect you to explore potential property defects, including zoning issues, and disclose them (and their potential impact) to me”? The answer that you receive should contribute to answering the trust question.

There are two other parts of the brochure that I think everyone should consider. The brochure includes a list of services a Realtor can provide when no agency relationship exists.

The other thing to consider is the role that you, as a buyer, plays, and what your responsibilities are. I think that the brochure underplays this considerably. Buying real estate with a Realtor should be viewed as a business arrangement. Both parties should benefit, and both should have responsibilities. The idea that a buyer should not owe certain responsibilities to the Realtor contributes, I think, to poor outcomes for both parties.

So, Step 1 in buying a house? Read the Agency Brochure and become educated on the various aspects of agency. Its a complex topic. Please discuss

April sales volume  rose in comparison to March, to 3,218 compared to 2,997(+7.3%).   Sales were lower than April 2007, however, (3,218 vs 3,387= -4.99%). New listings continued to rise in April, to 7,010, compared to 5,674 in March (+23.54%).  April 2007 saw 5,580 new listings. Compared to April of ‘07 the benchmark price is up 11% for detached properties, 10.5% for attached properties and 9.6% for apartments.  March’s numbers were 12.1%, 10.6% and 11.5%, respectively.

The sell/list for  April was  45.9% (counting backwards the numbers were 52.82% for March, 50.87% for February,  38.9% in January, 111.91% in December, 85.37% in November, 62.83% in October, 69.05% in September, 76.77% in August, 78.66% in July and 76.7% in June).Total  inventory at April 30 was 16,648, (13,475 last year) while sales for the month were 3,383 (3,562 last year), meaning MOI is 4.92.  Counting back to December ‘06 the numbers have been 4.63, 4.54 5.87, 5.4, 3.7, 4.09, 4.89, 2.74, 3.32, 3.18, 3.10, 3.78, 3.32, 3.92, 4.89, 6.2. It was 2.92 in June ’06. 

Last month I noted that prices were up, but price growth was slowing, inventory was growing and sales were off record pace.  This trend is continuing. MOI is rising slowly, and year over year price gains are slowly falling.   I fully expected sales price drops this month, but these did not materialize.  The market continues to defy.  Two trends are becoming increasingly clear, however: inventory relative to sales (MOI) is increasing, and YoY price growth is slowing.

While you guys have been debating the market I’ve been busy putting shingles on the side of our reno.  Its a slow process, but I’m quite happy with the result.

Here’s the question: should the band over the window remain light coloured, like the soffits, or be painted black like the window trim?

We’ve reduced price on 1280 Rupert Street and will be having an open house Sunday. This is a excellent house in a great location, and if you’re looking for an East Van family home it would be hard to do better. If you think the market is imploding, stay away. But, if you think the market is just taking a breather, this is great value. Compare what you get for $725,000 with what you get for $650,000 and I think you’ll agree.

I’ll apologize in advace if I’m covering ground that we’ve already been over, but in recent conversations I think that Googler brought up some valid points.  One that resonates with me is this:

 ”Maybe you don’t have the obligation to do so, but I think, as a blogger, you have the perfect opportunity to explain the errors or missing facts from the Sun article. ”

I’ve said that people shouldn’t get investment advice from the newspaper, and I’ve said that the internet is a great place to find information that was inaccessible in the past, so from that point of view I have to recognize the validity of Googler’s statement.   I don’t have an obligation, but the opportunity is great.  I’m not going to attempt to criticise the whole article, but only that small portion that deals with me. 

I was not fully quoted in the Sun article.  I don’t have a problem with that, but I will take this opportunity to expand.  I recommend buying real estate on the basis of some specific metrics.  The first is break even point, defined as how much of a downpayment is required before the property will cover itself.  This obviously varies with interest rates, so you have to sometimes moderate your take on it, but right now I’ll closely examine anything that breaks even with less than 40% down.  Those properties are in short supply.

A second metric I use is rent multiplier.  This is a very simplistic metric, and again, it will change somewhat with interest rates. When I began in this business I’d be impressed with a rent multiplier of 100, meaning a property that rents for $1,000 per month should sell for $100,000. Nowadays I’ll take a closer look at any property that has a rent multiplier of 180 or less.  Again, those properties are very hard to find.

If I do find a property that meets the first two tests I gather more information, make an assumption of 5% per year annual appreciation, long term, assume a long term inflation rate, and then calculate the internal rate of return (I just use the simple Excel function) and cash on sale at various points in the timeline. 

Those four metrics allow me to compare different properties to each other. These days we’re not doing much on the second two metrics because we aren’t finding many that meet the first two.

There are lots of reasons for that.  One is that prices have risen very steeply, and outpaced rents (even if you think rents have risen quickly).  The flip side is simply that rents have not risen all that much.  A lot of speculative activity has been rewarded handsomely (and not because speculators are stupid and lucky, but because many of them are quite bright), with the result that many investors calculate returns on much higher capital appreciation rates than I customarily use.  Many great strides have been made to address affordability, such as increased insurance coverage and extended amortization terms, but the (perhaps) unintended consequence is that the market priced those strides into price.  Consumers have agreed to be satisfied with less space, sometimes with the balancing payout of better location or amenities, and sometimes simply without trade-off.  Infrasructure and services have expanded to make what were less desirable areas acceptable.   Rents, throughout, have been controlled.  The end result is high break even points and rent multipliers, and low IRRs and cash on sale.

Housing prices do not always go up.  They don’t even always go up over the long term.  The clearest proof of this is a visit to a ghost town.  There are places where real estate once commanded premium prices but now has no real monetary value.  

There are somewho will argue that even if real estate increases in value in nominal terms it decreases in real terms.  Others will argue that some real estate, like apartments, lose value over time because they depreciate and don’t really include a land component, as opposed to a house on a lot.   What is clear is that the price of real estate goes up and down.

To invest in real estate you need to make some assumptions, and I’ve pointed out the 5% annual appreciation rate. I base this assumption on Vancouver being a desirable place to live, being Canada’s only large city on the West Coast, on land being realtively restricted, and on the increase in economic activity on the Pacific Rim.  Some may discount may assumptions and argue the opposite, but let’s face it: they’re my assumptions, and I’m not claiming that they’re anything other than that. 

That’s a brief view of the investment front.  I’m not so sure that everything is bleak on the homeowner front.  It is a difficult time to make a trade, but it is possible for existing homeowners to trade up or down to their advantage, and to be able to do it for the long term.  I don’t think that homeowners should treat their principal residences as an investment, however, and should move strictly for lifestyle reasons.  There are some people who can ignore this rule, but I think its safe to say that you can determine whether you are one of them based on the answer to this question: Are you willing to move from your family home on short notice either because you can earn a large profit or because your landlord can earn a large profit? For some the answer is clearly yes (mind you, if you answer “yes” once, be prepared to do it twice), while for many stability (especially once they begin raising families) is critical.

As far as the media misrepresenting any of my comments in a premeditated manner so as to further a widespread marketing campaign, I have to state that I am an unbeliever.  I don’t think the reporter  is bullish on real estate, and I don’t think he’s conciously compromising his values in order to satisfy a mercenary goal.  I could be wrong, but that’s my opinion, and I haven’t seen proof to the contrary.  I know that I have seen the press report negative news about real estate in the past, and I’m confident that they’ll do so again in the future, but again, that’s just my opinion.

My feelings toward the MSM is probably best described as ambivalent.  I buy the National Post/Financial to read the editorials (I like the regular writers and I like the wider range of writers and topics); my next stop is the stock price page and Soduko, and then the news.   I don’t read the Sun or Province much.  I don’t find I miss much information, and get plenty from the radio and the internet.  While pursuing other interests I discovered factual errors in a wide variety of newspapers over a time period stretching back to the early 1900s.  That made clear to me that newspapers are more entertainment and less information source.  I don’t think I’m unique in that sense, which partially explains why I wasn’t too concerned about the Sun article.

I do believe that the public should be more informed about the real estate market.  A well informed consumer is a better customer.  That’s really why I maintain the blog.

So, thanks, Googler for bringing up the topic. I don’t share your all of your concerns, but you were right to point out the opportunity that has been presented.

There were 965 new listings and 423 sales in my market are since Monday.  That’s a list/sell of 43.83%. Over 90s hit 2,132 out of an inventory of 14,569 (14.63%)

Coco, I’m sorry that you  shut your blog down.  I can understand your reasons, and empathize with you, but the fact is that your link summaries were popular.  If you’re willing, I’ll put you up on this blog as a regular contributor.  You can email me your posts  and I’ll get them up for everyone to read.  You don’t need to do it everyday, we can turn comments completely off if you like, and you don’t need to constantly monitor it.  I’m willing to do anything workable to make it easy for you to contribute to the blogosphere.  If you look at Bloodhound Blog you’ll see that they adopted a similar approach, and have done it in a big way.  I think it can be a great solution, and I’m happy to explore it.

VHB….same offer to you, my friend.  If this market has indeed turned, your day has arrrived.  Why not enjoy the adulation that comes to the prophet after years in the wilderness?