Real Estate Update - Brian Ripley

Summary of Housing Price Changes for Major Canadian Cities February 2010

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			Vancouver's detached house prices are again at a new all-time record high as they ticked up another 1.6% M/M in February 2010. They have rallied 23.5% since their near term low in December 2008 (chart) and have recovered the 15.9% plunge into despair from April 2008 (the last peak) to December 2008's pit of gloom. The 14 month Vancouver rally has blown away the previous record prices of Single Family, Townhouse and Condo units and like a James Cameron Hallelujah Mountain, Vancouver is in complete defiance of gravity and has become an Avatar master of debt creation. By my calculation it takes 3.2 average BC incomes to qualify for an 80% mortgage here in Pandora... errr Vancouver, and by Demographia's calculation it requires 9.3 times the median income to buy a median priced house. This "world" record is the result of government managed low interest rates and default risk being insured by tax payers. In the March 4-11th 96 page Georgia Straight (a weekly alternative to the CanWest Global Communications Corp (Shaw?) Vancouver Sun and Province) the number of unsold real estate developer projects and reseller/flipper advertisement pages jumped 42% M/M and 162% Y/Y. Furniture ads, spiked in sympathy and budgets for massage parlors, brothels, phone sex and dating services ticked up as well. My Vancouver Bubble Deflator Index tracks the number of Single Family Dwellings listed for sale in Vancouver (Eastside & Westside) as well as on the North Shore (West Van & North Van) on a chart plotting houses listed under and over $750,000. Vancouver is the most speculative housing bubble in Canada and as it completes its blow off bubble top, we shall see a shift of SFD listing prices to the downside and the proportions below will reverse. As of February 2010 high hopes prevail and 84% of SFD listings in the areas covered are asking over $750,000.... an increase of 2% since November 2009.
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Calgary's detached house prices zoomed 3.9% M/M in February 2010 (chart) as SFD sales jumped 36% M/M (scorecard). Calgary's detached housing prices peaked 31 months ago (Plunge-O-Meter) when the warning showed up in the Gold to Real Estate Ratio rising in the summer of 2007 as the Smart Money got out of real estate and moved into gold. Average Calgary SFD prices are now only 9.4% below their July 2007 peak.   Edmonton's detached house prices ticked up 0.5% M/M in February 2010 (chart), as SFD sales popped 35% M/M but remain 4% below last year. Edmonton still remains ranked as the Canadian city with the largest percentage plunge in price from their peak 33 months ago (Plunge-O-Meter) down 13.3% or $56,455. Condo prices dropped 3.1% M/M (scorecard). CONTINUE READING