Dane Eitel of Eitel Insights published a new market analysis report for Realtors, lenders and developers today that predicts the average price of single family detached houses in Greater Vancouver will fall more than 20% from the previous high, according to the Greenstead Consulting Group, Eitel’s marketing partner.
“Until now real estate professionals only had the ability see what happened with real estate prices in the past”, said Peter Morris of the Greenstead Consulting Group. The new report, called S.M.A.R.T. InsightTM, uses interpreted technical analysis and advanced charting to give insights into what the Greater Vancouver market is most likely going to do in the coming months and years. S.M.A.R.T. is an acronym for Specific Market Analysis of Residential Trends.
Eitel said; “This is not a new version of the same old data, but a completely different and useful analysis using methods that have been proven reliable for the past 112 years.” The charts included in the report visually demonstrate the real estate market tops and bottoms in sales pricing along with the trend lines for home prices throughout Greater Vancouver.
According to Eitel the technical charting analyzes data from 1977 to today. “Every single time the prices or sales numbers break the trend there is a predictable response from the market,” Eitel noted. He stated that his trend report indicates a price decrease because of that response, the extent of the average price decrease, when prices will most likely bottom out and then start climbing again. His research indicates that once the market has regained its losses it inevitably reaches a new high and starts the cycle again. “Unfortunately, it will be several years before prices bottom out and regain their anticipated losses, and more years yet before a new high is reached,” he stated.
Eitel cites the 2008- 2009 housing recession as an example of how those involved in real estate can use these reports, noting that the peak and bottom prices and the subsequent rebound were predictable. The top line of the trend was broken a few times, with the sale prices six and eight months earlier acting as cues that the market was overripe and a correction was forthcoming. He states that the proprietary S.M.A.R.T. Insight gave an 83% chance of correction in the first quarter of 2008.
“Our system’s historic pricing models indicated that the technical bottom would coalesce in a cluster on the way up. The initial bottom was in place on November 2008 and confirmed in March 2009. It wasn’t until June of 2009 – three months later – that the overall general market picked up the signs of the recession coming to an end for housing prices in Greater Vancouver,” Eitel said.
He said the benefit of his modeling was advance notice of several months prior to the price decline as well as an early indication of the rebound.
Greenstead is marketing the S.M.A.R.T. Insight report via the website of its subsidiary at http://www.vantageknowledge.com
Although, the first report is about Vancouver’s house prices Eitel states that his analysis can be completed for any major metropolitan area where sufficient data exists, as well as for different types of housing such as condos and townhomes. The group plans to publish reports about Toronto and Calgary early in the new year.