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In the Eye of the Storm: Vancouver Real Estate Detached Market

As the eye of the storm is eerily calm, so too is the Greater Vancouver Detached Real Estate market. Largely thanks to historic government stimulus. Just a heads up, the stimulus, draws nigh. CERB is coming to its conclusion, the deferred mortgage program is ending, and evictions have returned, now let’s see where the market will head on its own volition. Hint, down she goes

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The average price for the detached market in Greater Vancouver was 1.638 Million. Technically speaking this is the 20th data point since 2016 that has been around the middle threshold of 1.580M – 1.640M. What that signals to Eitel Insights, is this middle threshold is worn out. With over 30% of the data out of the last 58 data points resulting inside of that narrow 60 Thousand dollar band. Our interpretation of these multiple clusters is that prices have exhausted the middle threshold. The next challenge to the Greater Vancouver market will be to find the market bottom (likely at 1.40 Million during 2021), then consolidate that base price. Once that market has accomplished these herculean feats, prices will begin to rise. After the base, Greater Vancouver market will begin to climb, the middle threshold will be broken like water going through a tissue. As there have been multiple test of the threshold on the way down there will not be much need for sustained price tests on the way back up to the peak echelon.

Inventory has continued to grow, and August resulted in 4800 active listings. The highest level in the past 10 months however was still staunchly lower than the 15 year average of 6000 actives. At the current levels the inventory has 2000 less properties than 2018, but the average sales price is only 13 thousand dollars higher. That implies not too many are choosing to be selling their property during this time. The properties that are on the market are more than likely “need based sellers”, which as Eitel Insights has forecasted will continue to rise. One example of why there are less sellers than two years ago. The market was still considered by other analysts to be a hot market, listings were high as Realtors told sellers they could name their price and a buyer would pay it. That possibility never actually transpired, what did occur was a cancellation many listings, based on the Realtors advice that next year will be better, wrong again. Here is one example property out of many examples had listed for a pie in the sky price during previous years. A property listed in 2018 with a 1.658 Million list price, never sold, relisted in 2020 at 1.378 Million and sold for 1.285 Million. Want another example? Here you go, 2017 list price of 5.288 Million, 2019 list price 4.788, price reduction down to 4.388 Million, another reduction to 4.25 Million. 2020 list price 4.099 Million, sold for 3.80Million.

Would either of those properties have continued to chase the market lower unless there was some kind of a need to sell? I doubt it. This need to sell will continue to permeate throughout the detached market.

Sales ticked lower in August with 1108 sales, compared to July which had 1134. With the sales escaping the identified channel the past two months, we anticipate the data to return lower as the economy will be on its own, without the aid of any government buoys. The government did everything to halt the economic impact of Covid-19 across Canada, especially in the two largest real estate markets (Toronto & Vancouver) now that the government’s intervention in to the free market is coming to the end. The forthcoming data will continue to under deliver in upcoming quarters, now that folks have to go back to spending money they earn rather than spending the handouts.

After the anemic sales during April and May, the sale surge during July and August, should not come as a huge surprise. Taking all of the past 5 months of sales into consideration, April 393, May 544, June 873, July 1134 and August with 1108, the average is 810, when compared to the previous 2 years the average is good. However as you will remember, Eitel Insights has stated this market has been falling off since peaking in 2017. The 5 year average of sales during the 5 month span is 1163 sales indicating the 810 to be less than stellar.

Yes, we are aware that interest rates are low, but now that the governments have moved off of the standard 2% inflation target, I do not see any real panic to lock in the rate before they soar higher, do you? If you don’t, we suggest to practice patience and look to accomplish a sale at a lower price point with more selection during 2021.

Eitel Insights has offered 2021 as a target to purchase since 2017, unlike all other analysts who have flipped flopped over themselves in the past few years, we remain staunch due to our ability to block out the noise and stick to the analytical interpretation. These ever changing fundamentals that most pontificators speak on are on data that transpired a quarter ago at least, this data is tainted with the CERB and other unusual stimulus. Those fundamental negative results will not be seen until 2021, then they will say the sky is falling after it already fell.

Real estate need not be, buy, and close your eyes. With Eitel Insights we open your eyes to the possibility of tackling the largest purchase of a life time with unemotional analytical interpretation, along with a history of accurately forecasting various markets across Canada.

To become an Eitel Insights client and be able to accrue actionable intelligence through our analytical interpretation, visit www.eitelinsights.com.

Watch Eitel’s latest video here:

Canadians Cite Difficulty Paying Mortgages, Even Without Pandemic’s Financial Impact

Most Canadians believe they’ll be able to pay their mortgage during the pandemic, it just won’t be easy for all. Mortgage Pros Canada (MPC), an industry group representing mortgage brokers, conducted a borrower survey on the impact of the pandemic. The survey yielded a number of interesting insights, but the most interest was the ability to pay. Most people are able to pay, but even some without a loss of income say they’ll struggle to pay their mortgage.

Canadians Without A Loss Of Income Say It’ll Be Difficult To Pay Their Mortgage

The vast majority of homeowners without a loss of income, are ready to pay their mortgage. Of these people, the survey found 67% will continue to make payments without a problem. Another 24% will make their payments, but with some difficulty. Overall, fewer than one in ten of people in this demographic will not be able to pay their mortgage regularly…CLICK for complete article

Why The S&P 500 Snubbed The Most Valuable Car Company In The World

The S&P 500 is an exclusive club of the 500 biggest companies by market cap on the NYSE or Nasdaq, and the inclusion Friday of three new companies to replace three that are outgoing was a big deal–particularly because EV darling Tesla (NASDAQ:TSLA) wasn’t among those chosen for onboarding.

Because Tesla was given the cold S&P 500 shoulder, its stock is taking a beating.

The market-defying stock is down from $502.8 on September 1st to $354.67 at the time of writing on September 8th. That’s a major culling on a snub that no one expected from the S&P 500 club.

The club booted H&R Block, Kohl’s and Coty, and replaced them with Etsy, Teradyne and Catalent.

Investors will be forgiven for their confusion.

They will also be forgiven for not having ever heard of Teradyne, an industrial automation and robotics company, and Catalent, a pharmaceuticals developer.

And the surprise that a crafting marketplace such as ETSY has been admitted into the club over the Tesla giant is also easy to understand.

For anyone waiting for an explanation, there won’t be one. The S&P 500 doesn’t explain itself.

That said, the club has to decide whether it’s going to go along with market sentiment or beware the hype when it adds new members….CLICK for complete article

5 Things To Do With $1,000 Right Now

If you’ve got an extra $1,000 by some miracle, or perhaps thanks to COVID stimulus holdovers, it may not seem like much, but there’s no reason it can’t be the seedling of your first investment portfolio.

Perhaps if you’ve got serious debt to pay down, it’s better to do that first, but if not, there are plenty of places to park $1,000 that will make it grow rather than collecting dust in a savings account, or worse yet, under the euphemistic mattress.

And since zero-fee trading platform Robinhood descended on the Earth to democratize trading for the little people, retail investing–even when you don’t know what you’re doing–is all the rage.

The markets started to tank in March because of the COVID-19 pandemic but has also created an army of young investors that started investing out of boredom due to stay-at-home and lockdowns.

All major online stock trading platforms have seen a surge in demand in recent months, leading to a major spike in new accounts in the first quarter. Many of the new users are young or even first-time investors with over half of them aged 34 or younger. In fact, online brokers saw new accounts grow as much as 170% in the first quarter.

Recent studies show that 29% of wealthy investors are under the age of 50 and control 37% of investable assets. So, why not you?

That $1,000 you have right now could grow into years of great future financial choices.

Here are some tips for the best ways to invest $1,000 right now:

#1 Micro-Investing

A cool grand is not too shabby if you want to start with micro-investing. With new apps (such as Robinhood) on the market, you can even start investing with as little as $5. Squirreling away even $5 a week, for instance, creates a savings/investing habit and you won’t even miss the cash.

And if you want the ease of stock trading with diversification benefits of mutual funds, you should take a look at micro-investing apps that allow you to invest in exchange-traded funds (ETFs)–entire “baskets” of stocks centered around various themes….CLICK for complete article

Quote, Shocking Stat & Goofy Award of the Week


Quote of the Week 
Economic legend, Thomas Sowell on the big difference between politics and economics in under 50 words. 

Shocking Stat 
CERB’s stated purpose was to cover the lost wages due to lockdown.  Guess how much they overpaid. 

Goofy 
There’s a special place in Hell for adults who use children to advance their political agenda. 

Can We Please Move On?

Is it time for labour leaders to turn the page on yesterday’s ideology and forget about pushing policies that hurt workers wages and job creation?