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Conditions Give Buyers The Luxury Of Being Choosy And Many Are Exercising That Advantage

A report from CBC News on Canada. “The P.E.I. Real Estate Association says changes to the Provincial Nominee Program are already having an impact on the Island’s housing market. A month after the province announced it was scrapping the immigrant entrepreneur stream of PNP, the association says the steady rise in house prices P.E.I. has seen over the past couple of years appear to be slowing.”

“The controversial entrepreneur stream granted applicants permanent residency upon arrival on P.E.I, in exchange for a $200,000 deposit and a promise to start up or buy a business here. Greg Lipton, the association’s president says while the majority who came through the entrepreneur stream ultimately lost their deposit and left the Island, many still bought houses here.”

“‘There are vacant houses out there that people just aren’t living in. They were specifically bought for the point of ‘okay, we need to have a residence on P.E.I. Here’s our residence on P.E.I.’,’ said Lipton.”

“Charlottetown realtor Jie Hu says 90 per cent of her business over the past few years has come from immigrants who arrived through the entrepreneur stream, most of them from China. ‘We did have quite a few clients that purchased high price real estate properties,’ said Hu. ‘In China, they only had an apartment or condo. But when they came to P.E.I., they found single family homes that are so affordable, and so lovely. So they say, why not buy a house?'”

From The Province. “Interfor Corp. plans to cut production by about 20 per cent across its sawmills in the B.C. Interior as it faces declining lumber prices and higher log costs. The pullback comes as lumber prices for Western softwood have plunged from over US$650 per thousand board feet in June to under US$400 as concerns mount about the U.S. housing market.”

“‘We obviously saw some very strong lumber markets in the first part of this year, and the higher log costs didn’t have as much of an impact when there were higher lumber prices,’ said chief financial officer Martin Juravsky.”

“The drop in lumber prices has sent industry stock prices lower for a variety of Canadian players since the June high. Canfor Corp. is down 38 per cent, West Fraser Timber Co. Ltd. is down 34 per cent, and Interfor is down 39 per cent.”

From Penticton Infotel. “Home sales took a plunge in the South Okanagan in September. The latest statistics from the South Okanagan Real Estate Board indicate the number of homes sold declined 46.9 per cent over September 2017 with only 119 units sold in September this year compared to 225 sold during the same month in 2017.”

‘Year-to-year statistics show home sales are down 20 per cent so far in 2018 compared to the same period last year from 1,977 to 1,576 respectively. The average price of a home in the South Okanagan in September was $362,320 compared to $421,116 a year ago, which is a drop of 14.2 per cent.”

“Real Estate Board President Linda Devreux says real estate activity in the South Okanagan ‘came off the boil sharply over the first half of the year, and is currently running at below-average levels.'”

“She calls the decline in average price in September ‘a compositional thing.’ ‘It seems to be the result of very little going on above the $1 million mark, compared to last September,’ she says.”

The Regina Leader Post. “The Association of Regina Realtors, which operates the area’s multiple listing service, said there were only 238 home sales in Regina and the surrounding area throughout the month of September. That’s 19.3 per cent fewer than the same month last year.”

“‘This is the lowest level of sales since 2005 when 228 sales occurred and well below the past 5-year average,’ the association said.”

“Home prices in the Regina area are also down, according to the association. The price of a benchmark single family home dropped from $303,800 last year to $288,900 last month. At a highpoint, five years ago, the same house would have cost $313,400.”

“In its press release, the association said most of the damage was done over the past 12 months.”

“It’s also taking longer to sell a home, the data suggests. As of September, there were 1,652 active residential listings on the Regina market. The average home in the city stayed on the market for 61 days before selling — longer than at any point over the past eight years.”

“The data is only the latest sign of a chill in the local market. Building permit numbers for June showed Regina had the biggest 12-month percentage drop in value of any large city in the country.”

From CBC Calgary. “Calgary home sales were expected to be slow this year — but not this slow. ‘We didn’t expect this much of a decline in sales activity,’ said Ann-Marie Lurie, chief economist with the Calgary Real Estate Board, taking stock of the first nine months of 2018.”

“Fewer than 13,000 homes changed hands during that time, down 14 per cent from the same period in 2017, which was itself a slow year.”

“From a sales point of view, 2018 has been the slowest Calgary has seen in more than a decade. There was some thought, earlier this year, that the summer season might boost the pace of transactions, but that failed to materialize.”

“Sales have been below long-term averages for the past few years now. Lurie said it’s increasingly apparent that ‘the market has changed’ and the near future probably won’t look like the recent past. ‘So that expectation of a quick rebound in the real estate market? It’s really just not the case,’ she said. ‘We just don’t expect to see that happen.'”

“In other words, the heady days of 2014 aren’t coming back anytime soon. By September 2014, the number of home sales that year had already cracked 20,000. They would reach nearly 26,000 by the end of the year. And prices followed. If you bought a middle-of-the-road home in January 2014, you were $27,000 richer, on paper, by December.”

“Today, however, many homeowners are finding themselves in the opposite situation. Median prices are down $10,000 so far in 2018, compared with a year prior. And there are indications the downward trend could continue.”

“Emma May, co-founder of Charles Real Estate in Calgary, wouldn’t be surprised if prices continue to fall in the coming months. ‘There’s lots of inventory and prices are starting to move downwards but they haven’t really, quite yet,’ she said. The current conditions give prospective buyers the luxury of being choosy, and May said many are exercising that advantage.”

“Some of her clients who want to sell are even reluctant to list their homes, said said, for fear of being subjected to a ‘whole flood of people’ coming to kick tires without being willing to put in offers anywhere near the price they’re hoping to ask.”

“Other would-be sellers who can’t get the price they want are opting to rent their homes in the meantime, and wait for a rebound in sale prices. But May doesn’t expect that to come anytime soon. ‘I think people need to wrap their minds around it,’ she said. ‘These prices aren’t going to be going up anytime soon and, if you want to sell, this is the new normal, for now.'”

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This Post Has 43 Comments

  1. ‘We didn’t expect this much of a decline in sales activity,’ said Ann-Marie Lurie…‘So that expectation of a quick rebound in the real estate market? It’s really just not the case,’ she said. ‘We just don’t expect to see that happen.’

    You finally gave in eh Ann-Marie? All these years, telling people a turnaround was just around the corner. It is a bubble. The bust lasts for years. Alberta, this lesson has been at no charge.

  2. ‘ while the majority who came through the entrepreneur stream ultimately lost their deposit and left the Island, many still bought houses here…‘There are vacant houses out there that people just aren’t living in. They were specifically bought for the point of ‘okay, we need to have a residence on P.E.I. Here’s our residence on P.E.I.’

    And it’s gone…

    1. My wife and I visited P.E.I for about 2 weeks. It truly is a gorgeous place, but the local industry couldn’t support home prices any loftier thank $200k from what I saw. I remember we stayed at the University of P.E.I. for a few nights (the dormitories) since they were converted to summer hostel of sorts because tax revenues were down and the province was having cash flow issues. Lots of good deals on Airbnbs, good oysters, and some wonderful excursions to the beach. This was in 2013, I’m sure things have gotten much crazier since then.

  4. “The drop in lumber prices has sent industry stock prices lower for a variety of Canadian players since the June high. Canfor Corp. is down 38 per cent, West Fraser Timber Co. Ltd. is down 34 per cent, and Interfor is down 39 per cent.”

    But…but…tariffs!

  5. “Some of her clients who want to sell are even reluctant to list their homes, said said, for fear of being subjected to a ‘whole flood of people’ coming to kick tires without being willing to put in offers anywhere near the price they’re hoping to ask.”

    You got that right, greedheads. We housing vultures are going to have a vast selection of carrion FBs and foreclosed shacks to choose from, and we just want to stake out the prime real estate pickings in preparation for The Great Cratering.

    1. ‘subjected to a ‘whole flood of people’ coming to kick tires without being willing to put in offers anywhere near the price they’re hoping to ask’

      That is one of the funniest things I’ve ever read.

    2. If the downturn is real, you will get one or two offers in the first 6 weeks. No need to worry about a “flood”

    3. “…are even reluctant to list their homes…”

      Sounds like a form of denial, as in “la la la, I can’t hear you!”

      1. Or sense of entitlement. “I don’t have to deal with that mess, I’m an upscale home owner”. I’ll get my price when the time comes with none of this malarkey.

    1. Selling minorities overpriced houses and then using these sales in ads to show how “woke”, they are. Sociopaths doing well by doing “good”.

  7. Did you get burned by your shitcoin investments?

    Brave New World Dept.
    October 22, 2018 Issue
    The Prophets of Cryptocurrency Survey the Boom and Bust
    Inside the ongoing argument over whether Bitcoin, Ethereum, and the blockchain are transforming the world.
    By Nick Paumgarten
    “It’s definitely nice to try to eke out some completely parallel kind of world,” Vitalik Buterin, Ethereum’s founder, said.
    Illustration by Robert Beatty

    Not long ago, I was in Montreal for a cryptocurrency conference. My hotel, on the top floor of a big building downtown, had a roof garden with a koi pond. One morning, as I had coffee and a bagel in this garden, I watched a pair of ducks feeding on a mound of pellets that someone had left for them at the pond’s edge. Every few seconds, they dipped their beaks to drink, and, in the process, spilled undigested pellets into the water. A few koi idled there, poking at the surface for the scraps. The longer I watched, the more I wondered if the ducks were deliberately feeding the fish. Was such a thing possible? I asked the breakfast attendant, a ruddy Quebecer. He smiled and said, “No, but it is what I tell the children.”

    My mind had been marinating overnight—and for more than a year, really—in the abstrusities of cryptocurrencies and the blockchain technology on which they are built. Bitcoin and, subsequently, a proliferation of other cryptocurrencies had become an object of global fascination, amid prophecies of societal upheaval and reform, but mainly on the promise of instant wealth. A peer-to-peer money system that cut out banks and governments had made it possible, and fashionable, to get rich by sticking it to the Man.

    Some of this stuff I understood; much of it I still did not. If you’re not, say, a computer scientist or a mathematician, the deeper you get into the esoterica of distributed ledgers, consensus algorithms, hash functions, zero-knowledge proofs, byzantine-fault-tolerance theory, and so on—the farther you travel from the familiar terrain of “the legacy world,” where, one blockchain futurist told me, pityingly, I live—the better the chance you have of bumping up against the limits of your intelligence. You grasp, instead, for metaphors.

    Blockchain talk makes a whiteboard of the brain. You’re always erasing, starting over, as analogies present themselves. So, Montreal bagel in hand, I considered the ducks and the carp. Let the pellets be a cryptocurrency—koicoin, say. Would the ducks then be currency miners? Every altcoin—the catchall for cryptocurrencies other than bitcoin, the majority of which are eventually classified as shitcoin—has its own community of enthusiasts and kvetchers, so perhaps the koi were this one’s. The koicommunity. The breakfast attendant who had put out the pellets: he’d be our koicoin Satoshi—as in Satoshi Nakamoto, the pseudonymous and still unidentified creator of Bitcoin. Yes, the koicoin protocol was strong, and the incentives appeared to be well aligned, but the project didn’t really pass muster in terms of immutability, decentralization, and privacy. Koicoin was shitcoin.
    …

    1. So you cracked the code and figured out Bitcoin and the rest of the scam cryptocurrencies have an intrinsic value of zero. Seems like a roundabout deductive journey to reach such an intuitive conclusion.

      A work friend of mine was (is) a Bitcoin/blockchain true believer. He “invested” six figures when Bitcoin was trading at under $1K, rode it all the way up to $20K (with me urging him to take profits), and now he’s ridden it back down to $6K. Some things I don’t understand, like why he didn’t sell when he could’ve made 20X his original investment. He’s emotionally wedded to Bitcoin and the Bitcoin community, which is a horrible way to approach investing.

      1. Well as of today he is 6x his investment not to bad he should sell. Personally I don’t understand the bitcoin at all. Philip Morris I understand they make cigarettes and sell them for more than it costs to make them. They pay a dividend.

        1. I can’t wait to see how Bitcoin does as all the other Fed-induced bubbles implode. My hunch is Bitcoin will implode a lot more than assets with fundamental value, but I may missing something important.

    2. I can’t wait until shitcoin goes to zero, along with all the other worthless altcoins. Nothing signifies this everything bubble more than this craptocurrency.

      Also, I was thinking how exciting it would be if the DOW plunged like 14,000 in a single day. And then the next day blew off another 4,000 to erase every bit of the largesse that the Fed bestowed upon it, leaving them curled up in fetal positions, cowering in fear. Maybe then, they’d consider some alternatives that actually benefit humanity.

  8. Oh dear…a glut of luxury apartments that most renters don’t want and can’t afford. Remind me again of what happens when supply greatly exceeds demand.

    https://www.zerohedge.com/news/2018-10-13/nyc-luxury-real-estate-market-verge-full-blown-collapse

    After New York City developers ignored affordable housing for years in favor of the fatter profit margins on luxury development (spurred on by what looked to be an extremely durable post-crisis recovery), the chickens are finally coming home to roost, as the Financial Times explains, what appeared to be an uncomfortable pullback in sales prices for luxury homes – spurred by a retraction in bids at a time of expanding supply – is now poised to metastasize into a full-blown market rout with implications beyond New York City.

  10. For those on Chrome, I have updated the JoshuaTree extension to at least partially work with the new blog format.

    Link here

    Currently the extension just tracks new comments, and adds toolbar for next.previous navigation. Hopefully folks find this useful.

    I’ll upload the Firefox version tomorrow, which should go live in a day or two. The new version is 4.0.0.

    2. Nice. Since the new blog I installed RSS and modified it based on username. Whenever one of the known criminals or liars post, I get pinged.

      1. That’s great, Chrome informed me this morning automatically that I needed to allow new permissions and I suspected that’s what you’d done. Thanks a bunch, great way to start the day.

        1. Fyi, the permissions should be no different from before. Not sure why it asks for that (I got same thing)

          1. It seemed to me it’s because you specified a second site that it applies to, so you’re adding permissions for that site too.

          2. That makes sense, Carl.

            Version 4.1.0 just went up, cleaning up the CSS to behave better on mobile now that the website is more mobile-friendly, and adds back the ‘options’ link.

            FYI, I added something to give some indication of comment threading on mobile. Let me know what you think!

  11. Ben great to see you sleuthing around north of the border. Canada is facing an 08 reckoning in housing market… I see you’ve discovered my other hometown, penticton. Keep it coming, I swap from your blog to greaterfool.ca, daily! Just got back in the states from northern interior bc. Friends all work at those mills. SO far, nobody mentioned anything slowing down. Not that the average joe would know much until he’s laid off. Or maybe nobody wanted to bring up lumber industry subject b/c no matter the flag we’re under, I think we’re all tired of politics. This tangled web we weave, of macroecon. All the best to you. I read daily, never comment. Also, CBC is fairly biased/typical MSM news, with a veneer of niceness, in true Canadian style. Check out https://www.castanet.net/ Or https://www.okanaganedge.net

  12. 228 sales occurred…the association said…“It’s also taking longer to sell a home, the data suggests. As of September, there were 1,652 active residential listings on the Regina market. The average home in the city stayed on the market for 61 days…

    Excuse me house sellers. 1652 / 228 * 30 = 217 days

    1. What factors contributed to drop in Triangle’s Q3 housing market?
      Triangle Business Journal-18 hours ago
      The story of the Triangle’s housing market has been one of rising prices and robust … “Buyers have gotten frustrated with the lack of inventory and the competing …

    2. “If you go from the speed of light, which was what the market was doing before, to the speed of sound, it feels a little slower” dumb dumb realtor analogy. Speed of light is roughly 900,000x faster than the speed of sound. That being said we can take even the recent rare case of the home selling in the 3 days (that’s if it closes escrow) and multiply by 900,000

      1. Realtors are having to reach farther than ever into their reserves of falsehoods and trite misleading analogies to try and explain away what savvy buyers can see with their own two eyes.

  14. Oct 14, 2018,9:16 am
    Dr. Doom Ignites A Bitcoin Firestorm
    Peter Tchir
    Contributor
    Markets
    Serious Shots Fired in the Battle of Bitcoin (source Getty)

    Interest in Bitcoin and Cryptocurrencies has slowed of late. Earlier this year, across social media, every mention of Bitcoin and cryptocurrency garnered a lot of attention. There was a particular emphasis on futures, ETFs and any plans that Wall Street was making to bring crypto more mainstream. That interest has waned, at least partly because prices have stalled, Bitcoin for example closed in the U.S. markets on Friday at $6,214 on Friday (according to Bloomberg – I use coindesk for real-time pricing). We are getting to the point that most purchases in the last 12 months will have been made at prices higher than today. Early adopters are still doing well on their early purchases, but very few people who have bought Bitcoin in the last 12 months can say that. That is definitely hampering the ability of Bitcoin to attract new adopters – which remains key to it being able to rise in price.
    …

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