DARRYL DYCK/For The Globe and Mail
Buyers can be excused for being confused about house prices that seem all over the map. It depends on what part of the map they're looking in, Brent Jang reports
In November in Greater Vancouver, the typical price for single-family detached houses reached $1.22-million. Or did it hit $1.58-million? And what do $1.9-million and $2.53-million represent?
The numbers are all correct, depending on the definition.
As the Vancouver region's housing market climbs ever more steadily into the stratosphere, it's easy for prospective buyers to get buried under a mountain of data. Just how expensive the market has become depends on what housing type is measured, the geographical boundary in question and which organization is compiling the data.
If real estate boards in the region are to be relied on, a typical detached house might be $659,700 or it might be $1.22-million. The gulf is a result of the areas the two boards measure and what they take into account. The confusion grows if statistics from Canada Mortgage and Housing Corp. and from separate real estate agencies get mixed in.
So what's a buyer to do? The devil is in the fine print.
The two main organizations tracking Vancouver-area housing prices are the Real Estate Board of Greater Vancouver (the REBGV measures the City of Vancouver and nearby suburbs such as West Vancouver, North Vancouver, Richmond and Burnaby) and the Fraser Valley Real Estate Board, whose boundary includes the sprawling and less expensive suburb of Surrey.
Both boards promote a number called the benchmark price, a representation of typical houses, so high-end properties are not included.
In Greater Vancouver, this type of detached house ran buyers about $1.22-million in November. If buyers were looking further afield, the typical detached house in the Fraser Valley board's district ran about $659,700 last month.
But those numbers mask what it might cost for someone to try to find a detached house within the City of Vancouver. And the real estate boards' preference for so-called benchmark prices – those that effectively strip out high-end sales – leaves buyers with an incomplete picture of the overall housing market.
Newly released data for November from the REBGV show the market for detached houses is hotter than ever in Vancouver proper, setting record highs for the benchmark price at $1.9-million and the average price at $2.53-million.
In Greater Vancouver, the price of detached properties sold last month averaged $1.58-million.
The data suggest the popular Twitter hashtag, #DontHave1Million, actually falls far short of the mark. The quest to find a decent detached house on a standard lot on a quiet street for less than $1-million within Vancouver's city limits has become an exercise in futility.
Benchmark, average and median prices for detached properties have soared over the past year in most parts of the REBGV by 20 to 28 per cent.
Still, the dream lingers for first-time buyers to join the million-dollar club for the coveted white picket fence and patch of grass in the city.
"We have burnout from searching for houses," said one woman who has been looking for a detached home this year in a market where bidding wars are common. She and her husband, who asked not to be named, are budgeting $1.1-million in their quest.
Good luck to them. Real estate agents concede that it is aspirational but not realistic for first-time buyers to get the keys to a detached property in Vancouver, unless they receive a huge helping hand from parents or some other windfall for down payments.
It is common to encounter references to real estate prices less than $1-million. Some statistics show a picture of relative affordability, but you need to read the fine print.
Exhibit one: CMHC is predicting existing homes sold in Greater Vancouver this year will average $887,600, once the final numbers are tallied from the the Multiple Listing Service.
Exhibit two: Royal LePage's survey of a sampling of properties sold in the region produced a median price of $928,532 for the three-month period from July through Se ptember.
Exhibit three: Re/Max reckons Greater Vancouver's average residential price will be $947,350 in 2015, once the number-crunching is done.
The catch? Those three examples combine sales of detached homes, townhouses and condos. As well, they are a regional look and not zoomed in on the City of Vancouver. Royal LePage, which recently changed its methodology, examines Vancouver proper and seven suburbs to provide its representation of Greater Vancouver.
Adding to the confusion is the REBGV's decision this year to rebrand its statistics as ones for Metro Vancouver. The trouble is that Surrey, North Delta, White Rock and Langley are part of the political entity known as Metro Vancouver, but they belong to the Fraser Valley Real Estate Board.
The REBGV divides the City of Vancouver into the west and east sides for statistical purposes. On Vancouver's west side, the median price for detached houses reached $3.1-million last month, while the east side saw the median price hit $1.31-million.
If consumers are willing to lower their expectations, then it is possible shell out less than $900,000 for a piece of paradise in Vancouver proper.
One of the cheapest detached properties that changed hands in the city last month sold for $880,000. It is the site of a former marijuana grow-op along Main Street. Another house sold for the seemingly bargain price of $899,000, although it is on a lot that measures 29 feet wide by almost 90 feet deep – smaller than a standard lot that is 33-by-122 feet.
"The City of Vancouver, for a single-family detached home, has in large part become out of reach for a couple making average income or even a higher-than-average amount of income," said Cory Raven, managing broker at Re/Max Select Realty in Vancouver.
For the real estate industry, it makes marketing sense to emphasize the broader range of housing options because townhouses and condos are generally far more affordable than detached houses. Statistics are being scrutinized as Vancouver garners international attention for attracting home buyers from China to the city's west side.
Excluded from benchmark prices are high-end sales that the housing industry argues skew the numbers upward. One example of a posh property is a custom-built mansion on Vancouver's west side that sold for $13.34-million, featuring a two-storey foyer with crystal chandelier and two curved staircases, ocean and mountain views included.
Cameron Muir, chief economist at the B.C. Real Estate Association, said too much attention is being paid to the higher end of the market. He makes no apologies for the industry's emphasis on townhouses and condos in Vancouver and the suburbs. "There will be a record number of sales this year in Metro Vancouver, and most of the sales are not in the $3-million range."
Townhouses had a benchmark price of $866,500 on Vancouver's west side last month and $626,400 on the east side. Condos had a benchmark price of $586,100 on the west side and $360,900 on the east side.
In the first eight months of this year – counting detached homes, townhouses and condos – 68 per cent of residential transactions in Metro Vancouver were below $814,000 while 78 per cent of the properties sold for less than $1-million, Mr. Muir said.
The message is that if buyers want to live in Vancouver, Burnaby, Richmond, North Vancouver, West Vancouver or even Port Moody, they should look at townhouses and condos.
For those who prefer to stick with detached homes, the less expensive options are farther out in places such as Langley and North Delta, though White Rock, South Surrey and Tsawwassen have become expensive suburbs.
DARRYL DYCK/For The Globe and Mail
Calculating a statistic
Determining how expensive homes are in the Vancouver region depends on how prices are measured and what area is captured by a particular statistic.
Benchmark price: The Canadian Real Estate Association and five real estate boards developed the benchmark price as a representation of typical houses in an area. It does not include sales of high-end properties. The benchmark price is released with the home price index (HPI) to provide a reliable barometer of housing trends in certain major markets, according to its creators. The HPI's base is 100 on Jan. 1, 2005.
Real Estate Board of Greater Vancouver: Boundary covers a large portion of Metro Vancouver. The Greater Vancouver board's statistics encompass Vancouver, West Vancouver, North Vancouver, Burnaby, New Westminster, Richmond, Port Moody, Port Coquitlam, Coquitlam, New Westminster, Pitt Meadows, Maple Ridge, Whistler, Bowen Island, Sunshine Coast, Squamish and South Delta (Ladner and Tsawwassen).
Fraser Valley Real Estate Board: Members are Surrey, North Delta, White Rock, Langley, Abbotsford and Mission.
Metro Vancouver: A broader political entity that has 23 members, including communities such as Surrey, White Rock and Langley – whose sales fall under the Fraser Valley Real Estate Board. Most of the Real Estate Board of Greater Vancouver's members are part of Metro Vancouver. Abbotsford, Mission, Squamish, the Sunshine Coast and Whistler are not part of Metro Vancouver.
Lower Mainland: In the housing world, this is the region that combines statistics from the Real Estate Board of Greater Vancouver and the Fraser Valley Real Estate Board.