Archive for May, 2009
You are currently browsing the Aston Lau blog archives for May, 2009.
27
May
2009
Anecdotal evidence
Normally, I don’t give much credence to anecdotes — sample sizes are too small to be meaningful — but I found this comment by DavidWDesjardins, posted on this CBC news story, extremely interesting:
As a developer of software for realtors, I have a keen insight into the real market. First and foremost the real estate board only comments on the sale of properties, avoiding any numbers regarding presales and assignments.
Assignment resales accounted for nearly 50% of realtors revenue who operated in the downtown core. After the crash, reslaes went into the toilet. These number are never reflected in the boards numbers, The real damage and fallout from this won’t be seen for months to come.
MAC Bulk has made some headway, but the numbers of units moved is a fraction of what they were a year ago.
With our software we also track price reductions. Homes in the 500K range have dropped an average of 14%. Homes in excess of 1.5 million have seen price drops of as much as 30% to get a sale. And don’t get me started on the ultra expensive market. Complete stagnation.
26
May
2009
A bit of a laugh from 2005
I found this gem from 2005 while searching for historical real estate prices in Vancouver:
Bursting the bubble myth
By Bruce Benham, Chief Operating Officer of RE/MAX International, Inc.
July 29, 2005We’re all aware of the dramatic headlines proclaiming the inevitable “housing bubble” that will reportedly cripple the real estate industry, and the entire U.S. economy, when it eventually bursts.
But you know better. And I hope your clients do too….
The best part is, at the bottom of the article there’s a button that reads: “Access our market intelligence, contact our team now!”
22
May
2009
Bond yields shoot up
As of May 21, 2009, the 5-year GoC bond yield has shot up to 2.26% — the highest it’s been since the beginning of December:
01/12/2008 2.26%
02/12/2008 2.26%
03/12/2008 2.27%
04/12/2008 2.17%
…
11/05/2009 2.07%
12/05/2009 2.10%
13/05/2009 2.09%
14/05/2009 2.11%
15/05/2009 2.13%
18/05/2009 Bank holiday
19/05/2009 2.16%
20/05/2009 2.15%
21/05/2009 2.26%
As you can see from the data above, yesterday’s rate shot up dramatically in one day.
It’s not a matter of if fixed mortgage rates will rise, it’s only a matter of when… and that when is going to be very, very soon.
14
May
2009
Fixed mortgage rate update
Looking at the 5-year fixed rates at ratesupermarket.ca, it appears that we’ve hit new lows in May. The lowest rate is now 3.54% with True North Mortgage lenders — down from the 3.69% I was seeing at the beginning of the month.
5-year bond yields have been hovering at the highest level it’s been since the start of the year, so you have to wonder if lenders aren’t going to start getting less competitive with each other once the busy Spring real estate season ends.
11
May
2009
Bond yields up again (May 8, 2009)
As of May 8, the GoC 5-year bond yield has jumped to 2.14%, while the 10-year is at 3.16%.
Government of Canada 5-year benchmark bond yield:
Government of Canada 10-year benchmark bond yield:
I can’t see mortgage lenders raising their rates until after the peak real estate season (spring) ends, but they will have to pretty soon after that.
9
May
2009
Bond yields up again
5-year BoC bond yield is up to 2.1%, while the 10-year bond is up to 3.14%.
Will be interesting to see how long it takes lenders to raise their fixed mortgage rates.
7
May
2009
More house price craziness
4323 Shelbourne Street (MLS #261971). I mentioned this house in my post from a few days ago, citing it as an example of sellers in the low end trying to sell for way above assessed value. Looks like it just sold for even MORE.
- Assessed at $445,000
- Listed at $529,900
- Sold for $540,000
1582 Fremont Place (MLS #261888):
- Assessed at $501,000
- Listed at $599,800
- Sold for $620,000
To be fair, this was a very nicely renovated home. (Even if they forgot to install a stove fan in the brand new kitchen.)
I can only attribute this craziness to the “Spring bounce”…. March, April and May are traditionally the busiest months of the year for real estate, so I expect to see prices resume their decline in the summer.
The fact that 22% of U.S. homeowners are currently underwater on their mortgages should give all of us some pause. As much as I’d like to own a home, now just isn’t the time.
6
May
2009
1850 Fairburn Drive
This market is still nuts.
1850 Fairburn Drive (MLS #261805)
Assessed value: $511,000
Listed at: $538,600
Sale Price: $572,000
Days on market: 7
To be fair, this is the first place I’ve seen in a long while that actually sold for above asking.
1
May
2009
Trying to time the market
I’ve been bearish on real estate ever since I started thinking about homeownership back in the summer 2005… turns out I was a few years ahead of my time. Who knew that the real estate boom would last so long? Certainly not the bears of the day. My timing was a few years off.
Well, sort of. The U.S. housing market started its correction in 2006 (but by that time I wasn’t paying much attention to real estate, since I had long ago stopped condo-hunting). There were massive foreclosures in 2006 and onwards, and well, we all know the rest of the story. But what about Canada?
It’s been a different story in Vancouver and Victoria, where I live. Prices have come down, but not spectacular fashion like our cousins south of the border.
I’m fairly certain, though, that this will change in short order. Question is, when? I’m getting sick of renting and itching to get into the market. No longer a swinging single, I now have a fiancee and we’re thinking of starting a family, and we can easily with considerable hardship afford a SFH.
I’m 95% certain that prices won’t go up anytime soon… but how long will it take for prices to go down? Will prices go down?
