Negativity in the news

Remember the good old days when all coverage of the Vancouver real estate market was positive? While you can still find some bright uplifting positive coverage it seems like its getting harder to find under the avalanche of negativity in the news recently.

In this weekends Globe and Mail the ‘financial facelift’ section is running with the title couple urged to pay off debts, forget about real estate, and includes a few negative swipes against our market.

“The couple’s goals are like many others,” he explains. “A house in a decent neighbourhood, kids and a solid retirement. In fact, there has never been a worse time in history to buy a house in Vancouver. It now takes 64 per cent of average pretax income to fund housing costs in Vancouver. House prices in Vancouver cannot rise forever.”

and

“Pay off those debts first, the planner urges, and forget about real estate for a while. House prices in Vancouver could decline within a few years. Waiting may be better than spending a great deal today when there are bargains tomorrow, he says.”

meanwhile over at the Vancouver Sun the front page article in the business section is New house supply outstripping demand, with the following gem:

“A large number of projects were launched over the summer in Richmond and it is taking time for the market to absorb all the units, she said. In New Westminster, Podmore added, sales have slowed because little new supply has been put out. In Maple Ridge, a large amount of the same type of housing is being built and it is taking more time for the market to absorb all the units.”

So if I understand that correctly, Sales are currently low due to the following factors:

– Too many houses on the market
– Not enough houses on the market
– Too much similarity between the houses

I think that about covers it, but lets try to stay positive huh? Where can we turn to for a little ray of sunshine? ReMax forecasts an increase in supply AND price, the best of both worlds! It sure is considerate of them to take the time away from the business of selling real estate and do an impartial study of the market reassuring us all of 8% gains. I think their positive outlook should be an inspiration for us all.

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Anonymous
Anonymous
13 years ago

anon: It would be bad for flippers, specuvestors and people that bought in the last few years and absolutely needed to sell, but thats not going to stop it from happening.I think there's a certain amount of sarcasm in the postings on this site, check through some older postings for examples.

Anonymous
Anonymous
13 years ago

Why would it be bad to see the RE market have major price reductions? Most people cannot afford to buy now and if they can it's not a wise move. The info on today's post isn't anything new but it's good to remind people how insane our RE market is these days.

bc_cele
bc_cele
13 years ago

n said… BC_cele: Interesting. How could they be that far off from reality? I'm not a big believer in the infallible truth of the media, but it surprises me that they could be that far off.. Is it possible there is something in there that you aren't considering regarding tax bracket, etc.. Could they be writing off large interest payments on student loan debt? Could they be receiving random payments of a couple thousand untaxed from an anonymous source through the mail? What the hell is going on here?I agree with anon11:32 – How totally depressing that a combined income of $142k won't buy you much right now. Isn't that like twice the average family income? If there is something else then I would expect that the author would have laid it out in detail – they seemed to have… Read more »

antz
antz
13 years ago

On a positive end, GVREB-et-al can follow NAR in spending $40 million on a public awareness push that also includes television and radio advertising next year."GVREB-et-al (NAR} BULLISH ON HOUSING MARKET, ADVISES CONSUMERS TO TAKE ACTION NOW WHILE CONDITIONS REMAIN FAVORABLE"http://tinyurl.com/y38ojp

Anonymous
Anonymous
13 years ago

BC_cele: Interesting. How could they be that far off from reality? I'm not a big believer in the infallible truth of the media, but it surprises me that they could be that far off.. Is it possible there is something in there that you aren't considering regarding tax bracket, etc.. Could they be writing off large interest payments on student loan debt? Could they be receiving random payments of a couple thousand untaxed from an anonymous source through the mail? What the hell is going on here?I agree with anon11:32 – How totally depressing that a combined income of $142k won't buy you much right now. Isn't that like twice the average family income?

bc_cele
bc_cele
13 years ago

Anonymous said… Some grad programs consider any grad student to be at full time status, regardless of hours currently worked. Alternatively, the govt. contract work might be related to her studies and thus count as research. True, many univesities will list you as fulltime for most circumstances, but this is only for tuition purposes (I worked my last two sessions fulltime and they refused to give my part-time status). Funding, however, is only extended to fulltime students who are also resident to the area (i.e. on campus), and is also based on being either a TA, MA, or RA. Trust me on this one, if you are doing working on your courses, your own research, and being expected to work, you will have very little time to earn extra money.As for the government funding, they don't pay for your research… Read more »

Anonymous
Anonymous
13 years ago

is she lying to the reporter about making 40K or is she lying to the school about her fulltime status?Some grad programs consider any grad student to be at full time status, regardless of hours currently worked. Alternatively, the govt. contract work might be related to her studies and thus count as research.

WoodenHorse
WoodenHorse
13 years ago

It amazes me how much the media suddenly mattrs in every market where housing has turned.

WoodenHorse
WoodenHorse
13 years ago

d_oush said… I know you are joking, but I do think the media should be careful about how negatively they slant articles about the market. Negative coverage could have a 'self-fulfilling prophesy' effect and would be a very bad thing for our whole economy. Where was your concern when they talked the market up for four years?(two years ago)woodenhorse said…. I know you are serious, but I do think the media should be careful about how positively they slant articles about the market. Positive coverage could have a 'self-fulfilling prophesy' effect and would be a very bad thing for our poor young people trying to buy a home. How's that condo holding up d_oush?

bc_cele
bc_cele
13 years ago

Anonymous said… I don't know what's the worst news in that globe article1.) That a combined income of $142K doesn't buy you much in Vancouver.2.) That a couple in their early 30's could be $160K in debt OR 3.)That it takes 64% of pre-tax income to now buy a home in Vancouver. Will we look back on these days as the unofficial depression for the middle class? I vote for the journalist not verify his facts.1) he's in a lower tax bracket than I am and even with 57K more I still wouldn't hit 142K.2) I went through grad school and you DON'T get 17K for nothing. I had the same deal and you have to maintain a full-time student status. To this end, I was forbidden from working more than 10 hours a week. [Maybe her univesity is different,… Read more »

bc_cele
bc_cele
13 years ago

Don't forget this little gemPodmore added that in her recent research, she has seen the number of "speculative investors" buying units in housing projects drop.A bit of flipper panic, perhaps.D_oush, let me get this straight – bullish news is great because if people believe it then they will buy more houses, even if they can't afford it.Right…

Anonymous
Anonymous
13 years ago

I don't know what's the worst news in that globe article1.) That a combined income of $142K doesn't buy you much in Vancouver.2.) That a couple in their early 30's could be $160K in debt OR 3.)That it takes 64% of pre-tax income to now buy a home in Vancouver. Will we look back on these days as the unofficial depression for the middle class?

Freako
Freako
13 years ago

Negative coverage could have a 'self-fulfilling prophesy' effect and would be a very bad thing for our whole economyPerhaps, but in this case the prophecy will fullfill no matter what.

d_oush
d_oush
13 years ago

I know you are joking, but I do think the media should be careful about how negatively they slant articles about the market. Negative coverage could have a 'self-fulfilling prophesy' effect and would be a very bad thing for our whole economy.