Condo inventories rose sharply in last six months
Condo inventories rose sharply in last six months
Vancouver Sun
Published: Thursday, January 25, 2007
Greater Vancouver real estate markets saw a 55 per cent increase in inventory of unsold presale condominium units over the last six months, which may trigger a slowdown in future development, PricewaterhouseCoopers reported today.
The rising inventory is likely a result of fewer buyers being able to afford Vancouver's high-flying prices, Craig Hennigar, vice-president of PricewaterhouseCoopers Real Estate (PsC), said.
However, Hennigar said developers will likely build the projects they have in the works now, then scale back their future expectations rather than drop prices that are being driven largely by skyrocketing land and construction costs.
Hennigar, in PwC's latest Greater Vancouver condominium market review, counted 4,350 unsold condominium units in pre-sale marketing at the end of December, compared with 2,780 in January, 2006.
However, Hennigar added that the 4,350 unsold units only represented about 28 per cent of all units in pre-sale marketing. In January, the 2,780 units represented 23 per cent, so the ratio of unsold units in the market hasn't increased dramatically.
"We're not suggesting, at this point, that the market is awash in unsold presales," Hennigar said. "We're not even at 50 per cent [which would signal a buyer's market]. But we're closer to it than we were six months ago, or 12 months ago when the market was hotter."
posted by James Haft at 12:50 AM
2 Comments:
Sunday, February 4, 2007
If You Wait Long Enough, the Market Will Eventually Go Down, but not this year and not last year!
At least in the area I serve there is certainly not a lot of condos on the market.
A lot of time, money and effort was put into creating a real estate market crash in 2006- well, it didn' t happen here in Los Angeles. Frankly, last year was a miserable time for me as a real estate agent thanks to the media and it's sensationalistic reporting. I still made plenty of money, in fact if I didn't get married and leave town for a big chunk of time, I would have made exactly what I made in booming 2005. What made it miserable was the atmosphere of false perception the media and people who don't know how to think independently created. I guess bad news sells better than good news. No one gets excited down at the coffee shop when someone says, everything's going to be o.k.
One bleary-eyed prospective buyer after another would tell me how they were going to wait for the market to come down some more and would probably wait to buy until next (this) year. Well, in the time that they waiting, in 90% of the Westside, values actually went up. In Santa Monica Condos, an area I specialize in, the median increase was 12.3%. Basically, every month someone waited for the market to go down, it went up. One percent is a lot of money with a median price of about $700,000. That means every month that someone waited they were paying a median average of about $7,000!
Even now, with all the data and statistics, some mediocre agents have been trying to negotiate down the sales prices on my listings by saying, "oh come on, why won't your seller accept this, the market isn't exactly hopping?"
The lesson is this-- look at the facts and talk to the man on the street to make your decisions, don't follow media hype or pedestrian conversations. People who are successful in their investment decisions have the ability to estimate risk and move forward independent of the herd of lemmings.
I agree completely.
Simone, why don't you come to US Condo Exchange Blogosphere and create a blog on our site.
We are the world's largest community dedicated to Condos and our audience would appreciate your insight.
jh
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