Where Were You When the Boat Tipped Over?

The people who depend on the real estate market in Vancouver will remember November, 2008 as the month that they threw in the towel, walked away, and started over.

Year-over-year sales dropped by 70%, the biggest drop in market history. In fact, sales levels are now below levels seen more than an entire generation ago, more than 24 years in the past. Many, many local neighborhoods simply have no sales to report.

Price declines are massive. The Greater Vancouver Real Estate Board (GVREB) reports that the "benchmark" price across all categories is now $495M, down from somewhere above $568M in May, 2008. This report is illusory, designed to create the impression that prices are down only about 12% since they peaked in May, 2008. However, prices actually peaked in March, 2008. And GVREB was not reporting "benchmark" prices for all categories in March, 2008, but was relying on, and reporting the "benchmark" price for single, detached homes.

As a result, a much better example of how much prices have fallen is to compare the "benchmark" price of a single detached property, which the GVREB reported was $921,000 in March, 2008, to today's "benchmark" for a detached property which GVREB reports as $666,525, a decline of 28% since the market peaked.

Sales levels are so low right now it is actually impossible to do a proper statistical analysis of the decline in price, by category and neighborhood, over what has now become an almost two year price drop. It is only possible to point to anecdote examples of product. For instance one condo we know that maxed out at about $480M is now listing for about $350M, a drop of 28%.

Sales are so slow that many sellers have simply let listings expire so that they do not have to keep their house in "best form" in case they might get a showing.

Earlier this year we predicted a price decline of 25%. That price decline has now been met and surpassed. We adjusted our prediction to 25-30% drop. We are now adjusting to 30-35% and believe that we are being conservative.