Of Beauty Contests And Price Wars

I am reminded of a comment made of their market, by a US Realtor a year or so back, that it had become “a combination between a beauty contest and a price war”. This could well apply in our market too and somewhat highlights the message that “to sell one must stage the property and price it to compete”. I’ll address my usual “supply vs. demand” comments in a more basic way this month (although I won’t omit the usual N/Van – W/Van synopsis in closing). I’m addressing the number of actual sales (9 mth – year to date) of all residential units and end of Sept inventory ’11 vs. ’12.

W/Van first – total sales (’11) 1188 vs. (‘12) 686 – down 42%.

Units for sale Sept 30/11 – 624 vs. Sept 30/12 – 750 up by 20%.

N/Van – total sales (’11) 1936 vs. (’12) 1595 – down 18%.

Units for sale Sept 30/11 – 927 vs. Sept 30/12 – 1132 up by 22%

This tells us that the pairing off of willing sellers and willing buyers was far more plentiful in ’11 than thus far in ’12. It also appears that there are lots (high inventory) of willing sellers today but, at the prices asked, not nearly as many willing buyers (diminished sales).

A proposition! Say, for a minute, the Supply side represented by potential sellers, got together and said… buyers (Demand side) are not appearing confident to make the decision to buy. Therefore it makes sense to take our homes off the market (or not add them to the supply pool). But, I hear you say, that is not realistic as so many of us really want to (need to) sell. Precisely my point! Now, and this is not meant to be facetious: Sellers, realize that it is your collective wants and needs that will cause prices to drop. Supply must decrease or the confidence of the buyers must be restored. We do know that a very large part of that “damage” can be repaired by the actions of our neighbours to the south and a “normalizing” of the European economy. Just how long will that take?

What of Realtor fiduciary responsibility?  We (Realtors) have an obligation to advise our clients who are considering selling, once we know their full circumstances, whether it is in their best interest to do so now or seriously consider the option of not offering the property for sale at this time. Realtors need to guard against being seen as “collectors of listings”. The recent growth in inventory will likely dictate lower selling prices for those competing for the minimal number of current buyers. Good news for potential buyers, I’m sure, but are our selling clients receiving this advice? Solicit this counsel from an experienced Realtor and then make your decision accordingly.

My recent addition of ‘SnapStats’ (what price ranges are selling and which are not) has been well received. Thanks for the calls and e-mail. I am happy to forward the past 12 month trend for not only N and W/Van but including ALL metro neighbourhoods as many have requested. Just fire off an e-mail to me at alanskinner@shaw.ca asking for SnapStats. If all are not of interest, please ignore those other areas.

Again, visit my website to see and “hear” the new developments.  I continue my commitment to keep you… www.OnTopOfTheMarket.ca – the “go to” site for North Shore Real Estate analysis and jumping-off point for FULL market listing information.

To join those wishing to get the e-mail version of this “update” and SnapStats – send a request now to alanskinner@shaw.ca and you’ll be assured receipt; phone me at (604) 988-7368 or visit www.OnTopOfTheMarket.ca

October 2012 Numbers

 

Now to the summary of North Shore results.  North Van detached homes sold are down ‘year to date’ by 22% from this time last year, attached (t/hses) sold – down 22% and apartments down 11% from 2011. Detached – average price is 7% higher than 2011 and inventory Sept 30th, 2012 up 45% from 2011. Average prices up 6% (t/hses) and no change (apts). Inventory (t/hses) up 38% from Sept 30th, 2011 and (apt) up 6% from 2011.

In West Van, detached number of sales to date 2012 is down by 48% from last year. Average price up by 9% and inventory Sept 30th, 2012 up 17% from last year. On the condo side – sales of attached (t/hses) are up, at 58 vs. 48 units; average price is now 22% higher. Active listings as at Sept 30th, 2012 (63 vs. 34).  Apartments sold are down from 2011 (131 vs. 171), with average price 13% lower than’ 11 (remember the small sample size) and active listings up 13% from Sept 30th, 2011 (118 vs. 104).

My recent addition of ‘SnapStats’ (what price ranges are selling and which are not) has been well received. Thanks for the calls and e-mail. I am happy to forward the past 12 month trend for not only N and W/Van but including ALL metro neighbourhoods as many have requested. Just fire off an e-mail to me at alanskinner@shaw.ca asking for SnapStats. If some are not of interest, please ignore those other areas.

Podcasts

North Shore Real Estate Radio

On an ongoing basis I pledge both my continued personalized service and a commitment to my reduced  business ecological “footprint”. A significant part is the radio (podcast) library which I’m continually creating.

All North Vancouver Real Estate “Updates”, reports and information articles, checklists etc. will be archived on my website and available for download or desktop listening 24/7. You can access the information you seek when the spirit moves and not when someone pushes yet another flyer into your mailbox. I am most excited about these developments. Input as to the topics for “programming” you feel would be of interest is strongly sought. Please e-mail This email address is being protected from spam bots, you need JavaScript enabled to view it or call me 604 988-7368 and 1-800-665-1455.

Click on the “Podcast” Icon in the top right of this article to listen now.

North Vancouver Real Estate

Podcasts

What Is Seasonal Adjustment?

By Brendon Ogmundson, BCREA Economist

“BC Multiple Listing Service® (MLS® ) home sales fell 27 per cent in December!…
BC home sales rose 49 per cent in March!”

Both of these statements are true, but are they meaningful? Not really. The type of
variation we see in some monthly data is produced by a normal and predictable
seasonal pattern. Which is why whenever the media reports economic statistics such
as how many jobs were created or houses sold each month, it is very likely that the
statistics they are reporting have been “seasonally adjusted.” But what exactly
does that mean? Before we get into how and why seasonal adjustment is done, it will be useful to define a few terms:
Time series: a time series is a set of data points of some economic (or other) variable
observed through time. For example MLS® home sales from January 1980 to
December 2011.
seasonality: a time series displays seasonality if there is, within the calendar
year, repetitive and predictable movement around an economic variable’s trend.
Trend: the trend is the long-term movement in a time series after other components, such as cyclical fluctuations, have been accounted for.
Cycle: the cycle component of a time series is the fluctuation around the long-term
trend that occurs at a period of longer than one year.
irregular: a time series may also have what is called an irregular component consisting
of whatever variation remains once trend, cycle and seasonality have been accounted for. It can be the result of one-time events like extreme weather conditions or other  unpredictable events.
Many economic data are influenced by recurring seasonal factors. Whether from weather, holidays or other recurring calendar events, these seasonal factors often obscure the underlying movement of an economic variable and make data analysis more challenging. Consider the increase in retail sales during the Christmas shopping season or home sales in the spring and summer months when the sun is shining and flowers are blooming. If  one were to look at the raw data for these series, you would observe spikes in the level of
the data that could mask a meaningful underlying trend. The challenge for economists and other users of data is to isolate movements in a time series that are due solely to seasonality and not to other important economic factors that might be impacting trends in the data. To accomplish this, various statistical methods have been developed to decompose a time series into its trend, cycle, irregular and seasonal components.
Most of the monthly fluctuation in sales are due to the long-term trend and medium term
cyclical economic factors. However, there is a pronounced seasonal factor as well. Once the seasonal factor has been removed, it is much easier to see smaller movement in the underlying data that were previously masked by seasonal fluctuations.
As we have seen, seasonal adjustment is an invaluable tool for data analysis that
can significantly enhance understanding and communication of the month to month
changes in the housing market.

“Copyright British Columbia Real Estate Association. Reprinted with permission.”