Slowing market ‘returning to balance’

According to an article in todays Province CMHC has gotten out the crystal balls and they forsee a ‘return to balance‘ in the next year or so in the Vancouver housing market. Hopefully they’re reading the tea leaves and not smoking them. As prices and interest rates have inched up over the years they believe that the recent slow-down is a sign of things to come:

“In general, we see a trend toward more balanced conditions next year,” said Cameron Muir, senior market analyst for CMHC in Vancouver. “In the last few years, most markets in the province have been in the seller’s favour.

“The erosion of affordability is going to begin to impact the market next year. High home prices and increasing interest rates will make housing less affordable and squeeze out buyers at the margins.

“With fewer first-time buyers able to afford homes, it will ripple through the whole market.

“It’s not a disaster, it’s a return to balance,” Muir added.

Ever seen a see-saw when one person gets off? The unlucky fella left on the other end usually ends up with a bloody nose.

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Anonymous
Anonymous
14 years ago

d_oush, some arguments are just plain wrong and don't warrant any consideration. Do you honestly believe that a debate, such as this, is nothing more than opinion and doesn't have to be backed up with evidence? If so then I suggest that you stick to arguing sports with your buddies over a few beers, and leave the academic arguments to those who actually have something to offer.

WoodenHorse
WoodenHorse
14 years ago

D_Oush said… I don't have time to find statistics to back up my argument If you're laying out the better part of a Million bucks for something, I would recommend that you find that time to do such. And that is where we depart company.I have numbers,I have stats,I have analysis,I'm not buying.Furthermore:but I would remind everyone that real-estate is an emotional market. Facts and figures say one thing, but it all comes down to opinions and emotion anyways.And that's where we have the source of air that inflated this bubble. How do you think the "RE Never Goes Down" crowd will react to being bombarded by stories out of the US about it's RE.It's just started…pull up a chair:G&M: <a href="http://tinyurl.com/npehkhttp://tinyurl.com/npehk<br />Or even: http://thehousingbubbleblog.com/Watch the articles, read the stories.btw: I only just noticed you said this in your first… Read more »

D_Oush
D_Oush
14 years ago

We can bounce statistics back and forth, but we clearly disagree about where the market is going. I don't have time to find statistics to back up my argument, but I would remind everyone that real-estate is an emotional market. Facts and figures say one thing, but it all comes down to opinions and emotion anyways.

bc_cele
bc_cele
14 years ago

Oh, and bc_cele:You can't live in a tech-stock so there's nothing to keep them from dropping to zero. Someone always needs a house to live in. Oh and d_oush everything you just said is the same rehashing of the top housing myths that we see time and time again.If you are so correct, then explain to me why Hong Kong and Tokyo have crashed so hard and sayed down for years. They have a higher density of people, which I presume most live somewhere, and they have mountains, oceans and all that great stuff we have here. Japan even hosted the Olympics. Hasn't helped them, though.And hate to burst your bubble, but Vancouver isn't in the world-class, yet. Maybe some day, but it isn't even in the same class as Toronot, let alone Montreal, NYC, London, Paris, or Geneva. I've… Read more »

WoodenHorse
WoodenHorse
14 years ago

Oh: one last question,Have you ever seen a franklin mint collectable plate commercial? Do you remember what they say at the end of those?

WoodenHorse
WoodenHorse
14 years ago

BTW: apologizes for the spelling.

WoodenHorse
WoodenHorse
14 years ago

d_oush:I'm not trying to be insulting, but that statement basically shows me that we're talking two different languages.I like Vancouver, and yes, it's growing. However, housing prices are so far out of wack with respect to incomes and potential rental incomes that it's not funny.furthermore, net immigration to BC has been at historic lows during this housing boom and that Landcor study shows it's BC'er selling to BC'ers in the vast majority of cases. Overseas purchasers represent at most 4% of sales (could be less…check out that link)However, whether or not Vancouver is in the same class as NYC or Paris is an opinion based debate. How's about this, answer these questions:1)Name one other city where the olympics caused a sustained RE price change?2)How high do you expect prices to go? Especially given that we have near NYC prices with… Read more »

D_Oush
D_Oush
14 years ago

Woodenhorse – What is that supposed to mean? Do you think that Vancouver is not a growing city? We aren't as big as NY or Paris yet, but we aren't a small city like Kelowna. Canada only has a few locations with nice climates all year round and vancouver happens to be the big city smack dab in the middle of the nicest part of canada.the way prices have gone up recently proves that this city is in demand.

WoodenHorse
WoodenHorse
14 years ago

D_Oush said… Why do you say vancouver is not like London, Paris, NY, etc? D_Oush, I wish you the best.Cheers,WH

kam
kam
14 years ago

d_oush-I think you're making mountains out of ski-hills.

D_Oush
D_Oush
14 years ago

Why do you say vancouver is not like London, Paris, NY, etc? This is a big worldclass city. We have movie shoots going on all the time, we have the olympics coming. Vancouver is a lot bigger than it was 40 years ago.

WoodenHorse
WoodenHorse
14 years ago

You never addressed:You: Prices here are not really that high Me: Compared to where by what measure? (and please….Vancouver's not: London, Paris, NYC)

WoodenHorse
WoodenHorse
14 years ago

1-The olympics are comingName one other city this caused a sustained RE price change? Also: Why aren't we all living in Torino?2-Demand from foreign investorsNot according to the recent Landcor study…it found that 94%+ of sales are to BC residents.see: <a href="http://tinyurl.com/s239phttp://tinyurl.com/s239p<br />3-Strong economyLumber is headed into the toilet. Mining may not be that far off if the RE crash continues in the US.4-Many local ski-hillsWell dam…you got me there. That justifies the Median house being over 10 times median household income. What was I thinking.How big is that Condo your selling?

D_Oush
D_Oush
14 years ago

Oh, and bc_cele:

You can’t live in a tech-stock so there’s nothing to keep them from dropping to zero. Someone always needs a house to live in.

D_Oush
D_Oush
14 years ago

Woodenhorse: What signs prices will keep going up?1-The olympics are coming2-Demand from foreign investors3-Strong economy4-Many local ski-hillsthere are more signs, these are just off the top of my head.thepope: Yeah but that quote is from the CMHC – their purpose is to provide 'affordable' homes, they don't have an investors perspective.

the pope
the pope
14 years ago

Prices here are not really that highDid you read the Cameron Muir quote? CMHC disagrees with you:"The erosion of affordability is going to begin to impact the market next year. High home prices and increasing interest rates will make housing less affordable and squeeze out buyers at the margins."

WoodenHorse
WoodenHorse
14 years ago

D_Oush said… Everything indicates that they will keep going up. What are these signs?Prices here are not really that high, Compared to where by what measure? (and please….Vancouver's not: London, Paris, NYC)condo's are still affordable so why not buy now while you can? Why? You need to sell one?

j2theroc
j2theroc
14 years ago

> d_oush; I think your perspective is too narrow.
Many cities in North America are beautiful with strong economies, and their RE markets are stagnating if not dropping.

The Olympics have done nothing for RE in other cities, it is hype.

“Priced out forever” and “things are different” are the bromides of the “soon to be burned”.

bc_cele
bc_cele
14 years ago

Yeah, but look at the way prices have gone up over the last couple of years. Everything indicates that they will keep going up. Prices here are not really that high, condo's are still affordable so why not buy now while you can? So how are your tech stock doing?

D_Oush
D_Oush
14 years ago

“Now” is but a fleeting instant, and it is gone…

Yeah, but look at the way prices have gone up over the last couple of years. Everything indicates that they will keep going up. Prices here are not really that high, condo’s are still affordable so why not buy now while you can?

solipsist
solipsist
14 years ago

it's just the way things are now"Now" is but a fleeting instant, and it is gone…

D_Oush
D_Oush
14 years ago

All you grumpy bears are fooling yourselves. The fact is that things are different. There are so many factors that go into a market that it is overly simplistic to say that the future will look something like the past.

The fact is Vancouver is a growing city. We’re hosting the olympics in 2010, we have a beautiful location, a strong economy and demand from all over the world.

If you don’t buy now you are very likely in danger of being priced out forever. This is not meant to be insulting, it’s just the way things are now.

kam
kam
14 years ago

The bloody nose scenario looks more and more likely due to the ridiculous heights this market has gone to. Real estate here never seems to find balance, it just swings like a pendulum from one extreme to the other. This time is not different.