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Year ends at a slower pace
Contents:
Market Pulse
Million
Dollar market
Mortgage Rates
Inventory
Advice ???
Market
pulse
Fall
is here. Christmas is on the horizon. The mood in the real estate marketplace
has changed. The exhuberant activity of the first half of 2006 has lessened.
The number of 'ready-to-buy' buyers has declined. Some of this change
is normal for the season (see 'sales price change' chart
below). Some is a reflection of 'buyer resistance' to relatively high
prices. Some is a reflection of the lack of choice in the inventory.
We
did have a fantastic price increase in the month of November in 2005
(see 'sales price change' chart below). Let's see what
happens this year.
The
size of the NV inventory remains relatively stable at about 520-530
total units.
The
Million Dollar Market in NV in 2006
Interesting
things are happening in NV. We've had more sales over one million dollars
than ever before (see chart below). The most expensive
home currently listed is in the Dollarton
area, asking $3,300,800. All the most expensive listings in North
Vancouver are east of Seymour River. The highest price paid in
NV this year was $2,995,000 (in Deep
Cove).
|
| Year |
— |
Number
of Sales over $ 1m |
| 2006 |
= |
114
homes (till Oct 31/06) |
| 2005 |
= |
78
homes |
| 2004 |
= |
43
homes |
| 2003 |
= |
19
homes |
| 2002 |
= |
9
homes |
| 2001 |
= |
3
homes |
| 2000 |
= |
5
homes |
| 1999 |
= |
0
homes |
| 1998 |
= |
2
homes |
| 1997 |
= |
2
homes |
| 1996 |
= |
3
homes |
Interest
Rates
The
bank rate is holding in Canada. Prime is at 6%. It may
even go down over the coming year as a result of the possible decline
in interest rates in the US because of the weakening of its economy.
A mortgage of $ 100,000 CAD amortized over 25 years with an interest
rate of 5.2% (with a 5 year term) costs just under $600 per
month to repay. $200,000 therefore would cost just under
$1200 per month. See samples of mortgage rates on my front page.
The pain
of paying high prices for homes is somewhat mitigated by the very low
mortgage rates in Canada. After all, at 5.2% for a 5 yr term,
it only costs about $600 per month to borrow $100,000.
That's a 40 year low.
The Bank's next scheduled date for announcing policy interest rates
is December 5th, 2006, and it's doubtful that we will see an
increase.
Sales
Price change in NV - comparing 2002, 2005 and 2006
Every
year has peaks and valleys of activity and price change. In the chart
below I've compared every month of the year for number of sales reported
and the median price of the totality of those sales, which includes
all types of residential real estate (detached, attached, land, etc).
As
illustrated below, March was the peak for sheer volume of sales
but September was the peak for price in 2002.
In 2005, May was the month with the greatest number
of sales reported and November was the undisputed winner
for the highest median price for the month.
2006 is not done yet but so far March so the greatest
number of sales reported and it looks like May might have been
the month for the highest median sale price.
|
| Month |
- |
2002 |
= |
Median
Sale Price |
2005 |
= |
Median
Sale
Price
|
2006 |
= |
Median
Sale Price |
| January |
= |
264 |
= |
$301,000 |
197 |
= |
$385,000
|
172 |
= |
$524,450 |
| February |
= |
306 |
= |
$290,000 |
270 |
= |
$399,400 |
205 |
= |
$529,000 |
| March |
= |
357
|
= |
$320,000 |
308 |
= |
$429,000
|
307 |
= |
$549,000 |
| April |
= |
312
|
= |
$325,000 |
284 |
= |
$449,900 |
302 |
= |
$579,000 |
| May |
= |
286
|
= |
$317,000 |
338 |
= |
$469,700 |
267 |
= |
$588,000 |
| June |
= |
210
|
= |
$322,500 |
271 |
= |
$499,900 |
283 |
= |
$514,000 |
| July |
= |
240 |
= |
$339,000 |
245 |
= |
$497,700 |
215 |
= |
$569,000 |
| August |
= |
176
|
= |
$325,000 |
195 |
= |
$469,000 |
178 |
= |
$549,000 |
| September |
= |
194
|
= |
$342,000 |
211 |
= |
$499,000 |
207 |
= |
$519,000 |
| October |
= |
203 |
= |
$339,000 |
257 |
= |
$479,000 |
197 |
= |
$569,000 |
| November |
= |
213 |
= |
$319,000 |
212 |
= |
$534,450 |
n/a |
= |
n/a |
| December |
= |
127 |
= |
$329,000 |
132 |
= |
$499,400 |
n/a |
= |
n/a |
Inventory:
The
inventory continues to be quite low. The median list price in
NV for detached homes has risen from $519,000 in 2002 to $777,000
in November 2006 - an increase of approx. 49.7%.
|
| Total
Inventory |
|
Comparing Nov (2002) & Nov (2006)
|
| North
Van - Nov 06 |
= |
521
homes with a median list price of |
$599,000 |
| North
Van - Nov 02 |
= |
458
homes with a median list price of |
$288,000 |
|
| Detached
Homes |
|
Comparing
Nov (2002) & Nov (2006)
|
| North
Van - Nov 06 |
= |
240
detached with a median list price of |
$777,000 |
| North
Van - Nov 02 |
= |
196 detached with a median list price of
|
$519,000 |
|
Attached
Homes
(apts & twnhmes)
|
|
Comparing
Nov (2002) & Nov (2006)
|
| North
Van - Nov 06 |
= |
267
attached with a median list price of |
$389,000 |
| North
Van - Nov 02 |
= |
258 attached with a median list price of
|
$289,900 |
The
numbers below provide a graphic comparison of the current inventory
(homes for sale) in some different parts of the Lower Mainland as
of Nov 11/06 and their median list prices.
|
| Areas |
All
Listings |
Compare
median list prices |
| North
Van |
521 |
median
list price: $ 599,000 |
| West
Van |
449 |
median
list price: $1,395,000 |
| Van
West |
2269 |
median
list price: $ 639,000 |
|
Van East |
1430 |
median
list price: $ 549,850 |
| Richmond |
1771 |
median
list price: $ 464,900 |
| Coquitlam |
764 |
median
list price: $ 499,000 |
Success
Rate in NV
The success
rate is the percentage of homes that actually sold versus the number
of homes available in a particular price range. Here's a sampling for
Oct/06.
$100,000
- $300,000
Homes available
= 67 - Homes sold = 36 - Success Rate = approx. 53%
$400,000 - $500,000
Homes available = 57 - Homes sold = 18 - Success Rate = approx.
31%
$500,000
- $600,000
Homes available
= 65 - Homes sold = 27 - Success Rate = approx. 42%
$600,000 - $700,000
Homes available = 68 - Homes sold = 35 - Success Rate = approx.
52%
$700,000 - $800,000
Homes available
= 73 - Homes sold = 26 - Success Rate = approx. 36%
$800,000 - $900,000
Homes available = 30 - Homes sold = 8 - Success Rate = approx.
27%
$900,000 - $1,000,000
Homes available = 20 - Homes sold = 9 - Success Rate = approx.
45%
$1,000,000 +
Homes available = 60 - Homes sold = 12 - Success Rate = approx.
20%
Advice
This
is the best market seen in about 40 years for borrowing
cheap money. If you want to improve your home, whether it be
by buying a new one or a renovation of the current one,
now is the time. Don't wait because there is no guarantee that
the cost of borrowing will stay at this level for any particular length
of time.
If
you have any questions or comments, please don't hesitate to contact
me.
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