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Tuesday, February 5, 2013

The push to prevent a listings tsunami



So the month of January has come and gone.

You will recall that back on January 2, 2013, we talked about the huge number of listings on the market as the New Year got underway.

Vancouver Inventory started off 2013 at 11,789.  In 2012 we started off with 10,671. So 2013 comes in just over 1,000 listings higher.

Of course these numbers represent Vancouver Inventory.  Realtor Larry Yatkowsky provided us with this graph of Greater Vancouver Inventory comparing the start of 2013 with 2012 and 2011:


Looking at the graph above 2012 started off higher than 2011 and 2013 was significantly higher than 2012.

Bottom line... listings are way, way up.

In January 2012, the market was flooded as total inventory soared 2,727 listings higher.

January 2013 didn't score that high, but the month did clock in a listings increase of 2,141... a total higher than any month other than January in 2012.

No matter how you slice it.... the market is swimming in available inventory.

In fact many believe the market has gotten off lightly.

I personally know of a seller in Richmond who pulled her home off the market in November - at the advice of her realtor - to re-list in the New Year.  His advice... hold off until late February, at least.

Privately realtors will tell you there are many more like her.  And it is what the industry fears.  A Tsunami of listings coming in the next two months to overwhelm the market.

Even with people holding off listing their homes for sale, total listings inventory surged this past month.     And the total surged for one reason - sales were abysmal. The number of homes sold in Greater Vancouver fell 14.3% last month.

As we near the that Spring listings surge from sellers who have been looking to wait out the market, the are attempts being made to convince some sellers to hold off from listing entirely this Spring, if they can afford to wait.

I believe this is the only way to explain the statement the Real Estate Board of Greater Vancouver (REBGV) put out yesterday, as noted in the Globe and Mail newspaper:
Eugene Klein, president of the Greater Vancouver board, said many home sellers are choosing to delist their homes rather than settle for a lower bid. “When a home seller isn’t receiving the kind of offers they want, there comes a point when they decide to either lower the price or remove the home from the market. Right now, it seems many home sellers are opting for the latter,” Mr. Klein said in a statement.
It makes great copy, but sorry Eugene... it doesn't wash with the inventory levels.

Even real estate agent Larry Yatkowsky points out the obvious. Besides coming up with the great image we used at the top of our post, Yatkowsky observes:
“Home buyer demand remains below historical averages in the Greater Vancouver housing market. January had a 14.3% decline YOY in sales. This was the second lowest number of sales since 2001 or put another way, sales were 18.7% below the 10 year average."
Yatkowsky then counter's Klein statement by noting:
"Although down 10.9% YOY, January’s new listing count was 18.9% higher than the region’s 10-year average. Total listings in the region increased 5.6% YOY."
Declining sales, listings surging higher... so why is Klein trying to create media buzz that home sellers are simply refusing to list if they don't get the price they want?

To me it seems obvious.

The full court press is on to try and dissuade the rush to market everyone is waiting to see.  Unlike last year, many believed 2013 would see higher listings in February than we saw in January.

And while the inventory total surged in January, it was solely because sales were so abysmal.  The daily listings counts were not that high in January.

February has started off with two consecutive 300+ listings days (if yesterday's increase of 161 listings carried though all month, we would see an inventory increase of 2,898 this month).

If sales continue to suck wind, February will most certainly top January's overall increase in listings.

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7 comments:

  1. I see SFH on MLS but without For Sale signs on the property. I'm not sure why someone would list their property without a yard sign, but it happens. I'm also seeing more vacant houses for sale.

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    Replies
    1. Some sellers don't want their tenants to know the property is for sale. I personally know one seller who had done this. She was hoping for a developer to buy the house sight unseen (to build a McMansion as many in neighbourhood had been constructed).

      She didn't want her tenant to know the property was for sale because she can't afford to have the house empty for even one month.

      Delete
    2. How does the owner explain to the tenants the prospective buyers who want to see through the house?

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    3. She was hoping for a developer who is only interested in the house as a tear down for a McMansion. There are about 10 in the neighbourhood built like this. Each 7-10 bedrooms.

      Thus... no need to see through the house.

      Property was on the market for about 6 months and lisitng expired in November. Well see if it is relisted.

      Delete
  2. The house across the street from us is listed on MLS, but the for sale sign was pulled after the first week. My thought is that the intended buyer is likely HAM (west side and listed over $2M). so why bother putting out a sign they will never see?

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  3. For Sale signs serve as advertising for the realtor. Neighbours see the sign any may contact the realtor for information on selling their own house. Also you ever notice when a house is sold often the selling realtor will plant his/her sign in the yard with SOLD plastered on it... It is such a silly game.

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  4. My neighbour's been waiting all through 2012 for the market to improve to list his house. I talked to him a couple weeks ago and he was bitching about property taxes. Talked to him today after seeing what looked like a Realtor at his house, and its going on the market in the next couple of days. I don't want to get to into the story, but they simply bit off more then they could chew with the house and can't afford the carrying costs any longer.

    He wasn't too optimistic about it selling though, is aware of the current market.

    ReplyDelete