Monday, January 10, 2011

Vancouver House Price Predictions for 2011

Lots of traffic comes into the this blog with the keyword "predictions". Since gambling with one's ego is the cheapest way to gamble, I'll plot some predictions out. Why not?

(BTW, you can always click on the graph to get a larger version.)

Vancouver House Price Change Year over Year Plotted Monthly with Predictions

This is the graph from Seriously Royal LePage? posted the other day. I added some trend lines, one linear and one a repeat of the previous decline in prices. I also made a hybrid of the two, in red. First off, I don't think that bottom that formed in 2009 will reappear this time around. Two factors were arresting the market's plunge at the beginning of 2009: Chinese bailout money spilling into Vancouver and Canada loosening lending standards which increased liquidity for traditional purchases.

The green (linear) line may hold firm until the market drops to 0% growth, year on year. Sentiment has a long way to swing, but after it does, recent history makes for a decent guess as to momentum.

So, my back of the envelope predictions for 2011 are:

March, detached house price (0% year on year): $800,000 (essentially flat from the last few months)
September, detached house price (-12% year on year): $699,000*
ADDED: December, detached house price (-15% year on year): $653,000

(* september 2010 was a slightly off beat month, I averaged August to October and took 88% of that.)

[The underlying chart has been updated for January]

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