“Talk about a good laugh!” Chad wrote, as he sent along a listing from a Vancouver realtor (below). As you may know, the average SFH in Van is changing hands these days for $1,198,828, which is down from close to $1.4 million a few months ago. This drop has been driven substantially by declines in the tonier areas, like the Westside and West Vancouver. In fact, since the Immigrant Investor program was punted by the feds, traditional in-demand hoods have seen an 11% price reduction.
Of course, the city is still nuts. The realtors are mental. The natives are post-horny. And I think we all know what lies ahead when a $2,170,000 house is advertised as first-time buyer special.
And here’s the house. Granted, it smokes. And it’s in an area thick with pretension, old money, and wrinklies with new hips – Shaughnessy. Maybe it’s worth $2.17 million, even though you might have to park somebody in the basement. But, get a grip people, if this is a starter home, we’re beyond screwed.
Now the Vancouver real estate board, despite falling SFH prices, is pumping its current stats as evidence the boom is back on. Sales in April were 15% higher than in March and have improved from last Spring (which was weak). But all is not well here. Listings are swelling in the Lower Mainland, as they are in most places – up 7.2% last month from the month before.
In fact, there are currently 15,515 properties on the market in Vancouver, compared with 19,118 in the GTA – which has three times more people. And of all these listings which are rapidly piling up, 5,000 are on the market at more than $1,000,000 (twice the number as in Toronto).
In fact, here’s a snapshot of prices in the area. Note how prices of detached homes went ballistic in the early years of the new century, just as Ottawa brought in 0/40 financing and emergency interest rates.
Finally, here’s a depiction of the US real estate experience showing a similar experience – relatively stable prices for a long time, followed by a speculative frenzy fueled by cheap money and lax lending standards. See any parallels??
Whether the fools living in Vancouver (or Toronto, or Calgary) believe it or not, prices almost always revert to the mean. There is no place that’s special. No people who are entitled to a home. No way average house prices can stay above $1 million while the average family earns $83,130.
If you think otherwise, I’ve got a bitchin’ starter house for you.