A new day: Y2ThisTimeIt'sDifferent

VREB numbers are out. I'm not going to do much analysis other than to repeat what VG has already said (with an edit): "sales are down considerably from August (25%) and prices are basically flat for the median SFH." Condo median prices jumped almost $15,000, though I don't give much weight to this number because the number of condos sold is so relatively small that blips like this are common.

Anyway, enough about that, you'll get far superior analysis from PB at VT. So go there, then come back and buy some books from Amazon through this site so I can quit my day job and live the dot.com dream ;-)

On with the real show now...

I peruse statistics at work in my own research fairly often. I came across this dandy gem today:

CMHC is forecasting that housing starts in BC will total 14,100 this year, down 13.5% from the 1999 level. A surge in demand for high-end homes (those costing $500,000 or more) is not expected to be strong enough to offset the effect that higher interest rates and construction and land costs have had on the market for entry-level home buyers.

The cost of new housing in BC’s two biggest urban centres continued to fall in August. The new housing price index (NHPI) in Victoria was down 4.4% from a year earlier, while Vancouver’s NHPI slipped 1.0%. Elsewhere in Canada, only two urban areas–Saint John-Moncton-Fredericton (-0.4%) and Sudbury/Thunder Bay (-1.3%)–saw the cost of new housing decline. Prices are rising in other cities, at rates ranging from +0.9% in Windsor to +7.2% in Ottawa/Hull. Overall, new housing prices were up 2.4% from August 1999.

Since 1992, the cost of new housing in Victoria has fallen 28%, while average prices for new housing in the Vancouver area have dropped 17%. Prices for new housing in the province have been declining steadily since the mid-1990s. In Vancouver, the rate of decline is slowing but this has not yet occurred in Victoria. Land prices are beginning to stabilize, but the cost of homes built in the city has continued to drop. New housing prices are affected by a combination of factors, including the state of the housing market, the availability of land on which to build, and the type and size of housing that is being constructed. The long-run decline in the NHPI is a reflection of falling prices for both the land and housing components of the index. (emphasis mine)

When was this from? October 13, 2000. And they say Victoria is different. What was happening back then? Stock market was uber-bullish, the NDP government of BC was on the way out, and developers were ready for a pro-business change. Even then they claimed no one could afford the product on offer. So what does this mean? Just more confusion for yours truly unfortunately. My best guess: the markets change, but the rhetoric doesn't. Man, do times ever change fast in the RE market. That was 7 years ago, almost to the day. Someone. Please. Help. Us.

Not That I Trust Polls Usually...

but this one is just too good to let pass by without comment.

The vast majority of Canadians rank home ownership as a top priority, but are pessimistic about their chances of buying a house in the current market, a new Angus Reid Strategies poll has found

nearly four-in-five Canadians (77%) say that owning their own home is one of their primary goals in life

two-in-three (66%) say that homes in their neighbourhood are overpriced

half (50%) believe that housing prices in their neighbourhood are only going to get more expensive in the next six months

Canadians who own their own homes, nearly all (95%) feel lucky that they bought their homes when they did, and 71 per cent believe their homes are worth the price they originally paid for them

But 74 per cent of homeowners say they would not have the money to put a 20% down payment on their own homes as presently valued

most Canadians who are presently renting feel that buying a home is out of the question in the current market—65 per cent of this group say that they will be waiting for the market to become more favourable before looking to purchase

fewer renters than homeowners (58%) feel their residence is worth the monthly price they pay

Nearly nine-in-ten from Alberta (88%) think homes in their neighbourhood are overpriced, and a similar number of Alberta homeowners (89%) say they could not afford a down payment on their home as presently valued. Four-in-five Albertans who rent their homes (83%) also say they will wait for a more favourable market before buying a home

young Canadians are more likely to have a pessimistic view of their housing markets. Canadians between 18-34 are more likely to believe that housing is overpriced, and more likely to believe that prices will go up in the next half year. In addition, fewer homeowners in this age group believe their homes are worth the price they paid for it

To summarize:

• we all want to own a house
• but aren't feeling confident at all about owning one at today's prices
• most of us think our houses are over-priced
• half of us are confident the market will continue to rise
• half of us believe the opposite or are unsure
• owners feel lucky they bought in at the price they paid
• most of those owners believe their homes are worth what their original purchase price was (wow)
• most of those wouldn't be able to buy today
• most renters won't buy because they can't today
• most renters will wait for a correction
• Albertan's are returning to some sense of sanity
• us young 'uns believe this market is crazy and feel like we got ripped if we bought

You can read a more professional take on this poll, over at The Tyee. Need I point out that even they call it a Bubble?