Canada's Housing Bubble

Sep 02, 2011 rebgv.org

Vancouver becoming a buyers' market: Real Estate Board

New listings rose to the highest August level in 16 years.

A real estate agents' group says the market "has been trending toward a buyers' market over the past three months." -- From news1130.com

Greater Vancouver Housing Price Index 2006 - 2011

Greater Vancouver Inventory 2006 - 2011

Greater Vancouver Sales 2006 - 2011

Greater Vancouver Sales 2006 - 2011

Greater Vancouver Months of Inventory 2006 - 2011

The Months of Inventory -MOI- is basically a ratio of the Inventory of homes for sale by the number of homes that have sold over a period of time. The higher the months of inventory, the slower the market and visa versa. Generally, 4-6 months of inventory signals a balanced market, less than that would undoubtedly be a very strong Seller’s market, & more than that would be a Buyer’s market. In the most basic sense, a strong market will have an MOI of under 5 .

Source: REBGV, SpreadSheets, Sept

Definitions of: Housing Price Index (HPI), Mean Average Price, Median Price

Mean: is an average that is arrived at by taking a range of home prices and dividing them by the number of units sold. If 12 homes sell in a price range from $220,000 to $690,000, the mean average price is determined by adding all of the sales prices and then dividing by 12.

Median: is the middle value. If 12 homes sell in a price range from $220,000 to $690,000, the median price is determined by arranging the sales prices from the lowest to highest. The media is the number in the middle.

For many decades, the mean and median average were standard industry measures for recording sales activity.
But these measures were not always accurate. In a neighborhood where 11 homes sell in the range of $650,000 to $850,000, and one home sells for $1.3 million, the average or mean will be significantly skewed.

The Housing Price Index (HPI): For accuracy, the Greater Vancouver and Fraser Valley Real Estate Boards developed the HPI, a tool to measure market activity.

The HPI is a measure of price change, for a set time period, for residential properties. It provides the most reliable information on housing price trends.

It’s modeled on the Consumer Price Index (CPI), which measures the rate of price change for a basket of goods and services including food, clothing, shelter, and transportation.

But instead of measuring goods and services, the HPI measures the change in the price of housing features such as lot size, number of rooms, age of the home and neighborhood.

The HPI tracks movement of mid-range priced homes and excludes extremely high and low priced properties.

Greater Vancouver Monthly Real Estate Statistics -- Nov 2010

Home sales in the Vancouver area fell 19 per cent last month compared to a year ago, but prices continue to rise.

The Real Estate Board of Greater Vancouver says there were 2,500 sales in November, but the adjusted average selling price of $580,000 is 4.1 per cent higher than a year earlier. However, the industry group says prices have "remained virtually unchanged since June of this year."

The unadjusted selling price of a detached home was little changed last month from October at just over a million dollars, but was 15 per cent higher than a year ago.

Listings fell 12 per cent from the previous month, and were also 12 per cent lower than November of 2009. (Richard Dettman news1130.com)