The Averages powered up in September per Larry's numbers.
Not altogether unexpected. While not as strong as August, September this year was a lot stronger than 2012. Was this the last of the pre-approvals going through? Certainly there seemed to be a division later in the month with lower sales/list showing up.
We have also had some big sales. As I documented earlier in the month, there were two $7 Million + sales in West Van alone (and a slew of $4-5 M sales). One was to a local buyer and one to a HAM from what I can ascertain. These numbers certainly baffle me. To spend $7 M on a house, requires a net worth at least twice that, and at a tax rate of even 30%, that's over $20 Million of earnings!
How many people have that sort of income?
Then I remembered that some banks were paying their senior executives over $10 M every year as was Telus.
MOI ends the month at over 7 for SFH and 6 for Apartments.
The bubble is not restricted to residential BTW. I spoke with a commercial realtor a few days ago and he said there is so much money in this town looking for a home, that yields on smaller, good retail and office packages have reached silly low levels.
The money is local professionals looking for diversification, Eastern retired money and of course hot offshore money. "If there is a tenant turn-over, the lost rent and expenses associated with tenant inducements and costs can bring the yield down to zero for that year. They just want a low yield in a tangible asset that can keep up with inflation. Of course if there is a serious recession in our city, there will be a LOT of unhappy landlords".
He explained that is one reason for the high turn-over of tenants in particularly retail businesses. "The rents are just too high". For example it is cheaper for a landlord to leave a unit empty until it finally rents, even to a weaker tenant , and lose the few % return while he/she waits RATHER than lower the rent much. If you lower the rent say 10%, that could drop the value of your property significantly in this bloated market, where every dollar of return is accounted for in the price.
Whence go we? The pre-approvals must be done. The market now sinks or swims on it's own. I suspect the HPI will still come in lower for September (it will if compiled fairly by the REBGV IMHO).
We should know soon if this is the case. As for the blog, I will be going fallow for a couple of weeks. I have a few matters to attend to and hope to be done near mid-month. If all goes well, I will return with commentary and the numbers at that time. May throw stuff in the comments from time to time.
Have a great October.