With the recent article in the Nanaimo Daily News stating that we are only down 3% (of course we aren't), it was time to take a look at how far back price levels have fallen. Due to low levels of sales in some months, the average can very greatly from month to month. It just so happened that the YOY decline for March was only 3% due to statistical variance.
Here is a look at the average and median monthly prices since the beginning of 2007:
Average Median
2007
J 309 296
F 306 302
M 329 324
A 325 308
M 346 327
J 333 326
J 352 333
A 346 335
S 360 345
O 367 360
N 364 365
D 377 365
2008
J 360 357
F 371 358
M 343 335
A 373 356
M 363 350
J 372 362
J 364 343
A 373 365
S 354 343
O 373 350
N 379 372
D 365 338
2009
J 348 334
F 326 310
M 334 320
Source: VIREB Statistics
From September 2007 to August 2008, the average was never below 360 and the median didnt go below 343, except for March 2008 were the numbers were 343/335 respectively. Using the YOY statistics, we get a decline of 3% for avg and 4.5% for median. This is due to the fact this month was a statistical irregularity, since it is way below all the other months around it. Averaging the average price of the first 3 months of 2008 and 2009, we get averages of 362 and 336, which signifies an average price drop of 7%. The average of the median prices for the first 3 months of 2008 and 2009 drops from 350 to 321, or a fall of 8%.
Prices were fairly stagnant in 2008 but in 2009 we are starting to see the prices reach lower levels. Sections in red indicate were current price levels have fallen back to. It is possible to say prices are back to 2 years ago pricing. If someone purchased 2 years ago, they likely would be in a break-even or losing position depending on realtor fees and equity gained. Since sales are continuing to be dismal and inventory is still ballooning, expect further price declines. How far back will prices fall?
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Thanks for the facts. Anything that counters the propaganda from the realty pimps is welcome and appreciated.
ReplyDeleteI agree that house prices our at 2007 levels. I have a friend who could not sell his house in 2008 and took it off the market in the winter. He then relisted the house at the price he bought it in early 2007 and it sold in week. He took a small loss but his family was expanding and needed a bigger place. Prices our going to fall further. I have been watching the market now for three years and can't believe how many houses our for sale. Thanks for the update!!
ReplyDeleteThanks for your analysis. The sales mix is also interesting to follow as I have been watching the market for the last 3 years or so. It appears to me that we have seen a real drop off in the higher priced homes. I have seen several homes under 400K sell in the north end. However, homes above 400K appear to have been listed all last year and then taken off the market last winter. I expect that they will reappear soon if the owners are genuinely interested in selling. I have heard from friends in the trades that local realtors have a rapidly growing list of foreclosures as well. I suspect that by late summer to early fall things will be getting very interesting.
ReplyDeleteNanaimo Dude-
ReplyDeleteThe inventory is sky high and is growing once again. The single family housing is nothing compared to condos/townhouses. They are about to plummet once sellers realize nobody is buying those. I hope to do a post of high end reductions soon.
Anon 1:08-
I am not sure if you caught the article in the Nanaimo Daily News or not, but it was a real eye opener for sure. The guy said his files were doubling or something like that. Many people have used their places just like an ATM and those with shady mortgages are getting denied renewals. Of course foreclosures happen with job losses too. The whole process is quite laggy however as it takes some time between when action is taken and the house is actually sold in court.
Thanks everyone who has stopped by.
Hello again it's anon 1:08. This listing was interesting MLS# 269795. It was a waterfront on Hammond bay that I believe originally listed over 1 Million. I could be wrong, and it might only have been in the high 900's it is difficult to remember as it has been off and on the market for over a year or more.
ReplyDeleteNever the less I know the original asking price was well above the more current asking price of $799K. And certainly above the sold price of $650K. I find this interesting as I expect the higher priced homes to drop more in absolute percentage terms as we move into this market correction. If we take 1 Million as a starting price then we are down ~35%
How have things balanced out since then? It seems like we were a little more fortunate out west compared to our compatriots in the prairies.
ReplyDeleteI had a great time with your post. I like it. A lot of thanks for sharing. Keep posting.
ReplyDeleteCharles A