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December 24th, 2006 at 8:41 pm
Did I ever tell you the story of when I went to the drycleaners to pick up my drycleaning and discovered one of my buttons was missing?
Let me guess what happened next. You dropped the $800 suit and the button off at the tailor’s. When you go to pick it up, the button is sewn back on … a $50 polyester suit. And the tailor insists on his $30 fee for sewing it back on.
December 24th, 2006 at 8:37 pm
Anonymous said…”So as promised:
It is Sunday Aaron’s Best Collected Works:
There are many others but hey, let’s be kind.
It’s Christmas.
Muir/Anon/whatever the hell you call yourself today, you are a tool. You’ve already been told that you are just a negative person with nothing worth while to add to any discussion. You still haven’t stated any of your theories, or points of view. Instead you lurk in the background stalking me, waiting for a chance to call me names. I think at this point you are upset I put you in your place, and you are trying to get back at me with your pathetic BS. I’ve given you lots of opportunities to leave with your dignity, but your obviously too thick to get the hint. When it comes right down to it you are like a rash. Irritating, and hard to get rid of. Get a life TROLL!!!
December 24th, 2006 at 8:35 pm
I am a Joker
I,you, they,we, means nothing its a question that who can?
All people who never did nor they realy going to if I did I will find some thing for my son and doughter if I am not married I still can to make my future easy going there are always some current facts to reduce prices but market does not allow actualy prices are up and always up if all can afford than who is going to rent Rich and Poor/Owners and tenents lifetime bussiness what you guys are doing is beating heads every days that takes years to develop real estates
December 24th, 2006 at 8:26 pm
thanks patiently waiting. I have read this site for months. I just wanted to check maybe I missunderstood. Just came back from a party at my sisters where one of her friends was telling me the reason they are looser in lending money here than calgary is that their economy is based on a sound industry. While here they can ignore fundamentals because it is based on inflation. Therefore banks can lend whatever they want knowing the inflation will keep the investment from falling. This bozo is a foreign doctor. Thank god they don’t let him practice.
December 24th, 2006 at 7:37 pm
noturaveragebear,
Start with the VHB site http://van-housing.blogspot.com/
Its inactive for the holidays but lots of neat background info there.
I bet those relatives have a lot to lose in a crash. You may not even know how far they are into this mess as many people keep quiet about the extent of their speculation. I know of a couple of doozies among my family/friends and there are certainly more.
December 24th, 2006 at 6:04 pm
I came home for christmas and I got in an argument with some relatives. they are arrogant and insulting of me when I state my opion that vancouver is due for a crash or a correction. They say never. Apparently the 1982 crash never happened. They say prices remained flat during that period. Is there anyone old enough here who remembers first hand what happened. I would love to see some numbers. Wondering how many years it took for nominal prices to get back to those peak numbers of 1982.
December 24th, 2006 at 4:29 pm
Our economic climate is heavily dependent on the resource sector, which then relates to the health of the Asian economy. The Chinese economy is bubbling as we speak. Shanghai has the least afford ability in terms of housing needs, close to 70% goes to mortgage payment alone. What keeps this buoyancy is the fact that people have high hopes for the 2008 Beijing Olympics. In the last Asian flu, only China came unscathed. China basically fuels the US economy, by pumping in cheap products. As this US consumerism market slows down to a crawl, who will China sell to? If China has no one to sell to, how can they keep their employees employed? Keep in mind that many people have super expensive mortgages that made on the assumption of China’s close to double digit growth. If this engine is stalled, the effect can be felt more brutally in Canada then in the States. After the 1997 Asian flu, only the US and many European markets were gaining record highs. Whereas, us, Australia and New Zealand were laggards, because all of us were resource based dependent. Things are already happening in Australia and New Zealand. I suppose that we aren’t too far behind. Prices of any equity does come down, and it’s part of the balancing of supply and demand, but they’ll eventually rebound back. The stock market had shown some resiliency. The 1973-74 Canadian market crash of 30% plus (most of you are probably in diapers) had since recovered. Just look at the TSE today. The 1994 Mexico crash. A few months to a year later, it recovered and made 90% gains. What about the 1997 Asian flu? They are now doing well, except the stupid Bank of Thailand’s rather recent naive foreign investment policy. That’s what happened if rookies run the country.
Most Canadians do place a lot of their savings in a home, knowing that it’ll be there to bail them later in life. Some may never see that happen cause they sold it after years of stagnation and enduring negative equity ownership. Just ask anybody who had bought in the peak of the 80s or 90s and see how long did they presevere? Not long enough unfortunately as told by my bank manager.
December 24th, 2006 at 4:00 pm
thevanman:
Did I ever tell you the story of when I went to the drycleaners to pick up my drycleaning and discovered one of my buttons was missing?
It’s a very interesting story kinda like your story.
December 24th, 2006 at 3:45 pm
Lost $29,000?
It’s funny that when you won some money, you want more. But, it does hurt when you loose money. It never feels good doesn’t it. That’s just part of human nature. Learn to accept it. You win some, you loose some. Same with shopping. You may be a great shopper for most items, but that doesn’t mean that you’re getting all the greatest deals. This is the same with a house.
Buy a house if you plan to plant your roots for a long while and disregard price changes. As long as you can afford the mortgage payments and all the other frictional costs associated with it, then everything else is just noise.
Yes, since the dusk of the investment crash of 1929, people had been predicting the death to real estate and stock market prices — they will pummel back to depression era prices. They’ll even furnish you with all the charts, facts and news cut outs.
The Canadian real estate averages around 3% average compound growth year after year. I read that in the past issue of the Canadian MoneySaver somewhere. That’s certainly nothing to write home about. If past history serves us with any indication, the recent price increases will self correct itself back to the normal average. Which means that in the not so distant future, the eventual price increase will self attenuate back to where you paid dearly for in the peak — broke even. That could be 10 years, 20 years or maybe longer.
Keep in mind that owning a house was never meant to be a good investment. It’s shelter and in this case, your bank is your landlord.
December 24th, 2006 at 3:26 pm
OT, saw this article on msnbc
The worst of the U.S. housing downturn may have passed and the sector should stabilize by the end of next year, three economists who study the nation’s housing sector said Thursday.
link
The three economist: Chief economists from the Builders, Realtors (good old Lereah) and Fannie Mae).
Might as well have discussed crime rates with Ali Baba and the 40 thieves. Why does the MSM pull these stunts? Published as Christmas nears the allegory is obvious, the three wise men. Seems more like the three stooges to me.
And I am not talking about the funny kind.
stooge
–noun
1. an entertainer who feeds lines to the main comedian and usually serves as the butt of his or her jokes.
2. any underling, assistant, or accomplice.
–verb (used without object)
3. to act as a stooge.
December 24th, 2006 at 3:24 pm
With all you people speaking about a big downturn. If the what if scenario is to come true, how much would all of you doom and gloomers be willing to pay for a house or a condo in today’s dollars?
What would be say the intrinsic value of a Townhouse located around West 4th and Burrard or even a Condo that’s being built right now at that location?
December 24th, 2006 at 2:58 pm
So as promised:
It is Sunday
Aaron’s Best Collected Works:
It’s time for the provincial gov’t to do something about that. If Vancouver is the most expensive province to live in. Wages need to be among the highest as well. I’ve got to believe that will happen. Call me an optimist!
“Stale dating happens when a property sits on the market for what is considered a long period of time.”
I don’t really seehow the wage angle will hold back values?
Then there is the Buying in Vegas little gem.
There is also the post about how he will own RE all over the world.
There are many others but hey, let’s be kind.
It’s Christmas.
December 24th, 2006 at 2:46 pm
“He tried to sell one on eBay this month but didn’t get a single bid. Now he’s spending $4,500 on Florida mortgages every month. ‘I expected a leveling out,’ he said. ‘I didn’t expect it to take a plunge.’â€
http://www.heraldtribune.com/
Just replace Florida with Vancouver about a year from now.
December 24th, 2006 at 2:36 pm
Noticed that Chipman now classifies his links into:
1. Real estate blogs
2. Bear blogs
How old is Rob Chipman ? Was he in diapers in the early 80′s or is he a grizzled old vet ? Experience is crucial at this important juncture in the RE market. I wouldn’t take any advice from someone with less than 25 years in RE bizz whose seen both sides of the coin.
I too noticed that Chipman categorized van.condoinfo., van(un)real, and VHB into “bear” blogs – as if that diminishes the salience of them. Personally, I would rather not have the link. He links to Real Estate Tomato, which is a blog about blogging and yahoo more than a real estate blog, Bloodhound – which has some long ramble about someone named Courtenay, and her eating disorder, and livium’s blog – which is another blog about blogging, but mentions Chipman’s blog.
I guess no one really wants to talk about the reality of the RE market. One can learn a lot more at VHB, or here, in about ten minutes, than a week of reading at Rob’s so-called RE blogs.
If I was Chipman, I’d ask Aaron to start his own blog, and stop cluttering up my own with inanities. It’s rendering it meaningless and trivial.
I have encouraged both of them, but I no longer know why.
Chipman is about 45, and as I know him, is a decent guy, but his sidekick does seem to be in diapers. I gave him a very long leash, and the chance to put forth reasonable arguments, but mostly just ignore him now. He’s got some pretty goofy ideas – like buying in Vegas, and renting out to hotel workers with a clause that he has a room when he wanted it. Huh? But he has an out by not liking the administration.
I was going to be a neuro-surgeon, but I didn’t like the name. I thought that people might think i was neurotic plastic surgeon, or such.
I have now changed Rob’s link to Rob’s Bull Blog – because it is mostly bull over there these days.
December 24th, 2006 at 1:48 pm
My house went down 20% after I bought it, and believe me I was pretty steamed about it.
Thanks for your illustrative example. The idea that people should buy any time because the market will recover *at some point* is ridiculous. It takes me a long time to save even $20k (and it takes longer & costs more to pay off a loan for that amount), so I would certainly notice if that amount or more was wiped out in a downturn. Why people suggest that a hundred-thousand dollar loss is nothing is beyond me. For example:
ken: Even if the value drops in half its not like that *hurts* you unless you *need* to sell it.
And what if you *need* to sell it due to job loss, job transfer, divorce, illness, accident, etc. etc. Then you just eat that 50% loss? It’s no big deal to lose hundreds of thousands of dollars? Get real.
The other myth that these idiots propagate is that “you can’t time the market, so don’t bother trying.” I think this one was originally made up by mutual fund managers, for obvious reasons.
While it may be near impossible to time the *exact* top or bottom of a given market, someone with reasonable powers of discernment who undertakes critical analysis of a market can usually discern if it is likely to rise or fall – and to invest accordingly.
And, after a speculative run up that has pushed the limits of affordability, housing doesn’t look like a good investment right now.
December 24th, 2006 at 11:32 am
Its a house to live in, not an investment.
A house is an investment, and the yield is – surprise – something economists call “shelter”, which means not having to live outside. And likewise it has a return on investment made up of yield and capital gains. The former is dismal right now, which means the latter is likely negative looking forward.
What you’re trying to say is that a house is not a speculative investment, which is purchased in expectation of capital gains over yield.
it wont bother you if houses get cheaper in the short term
My house went down 20% after I bought it, and believe me I was pretty steamed about it. And prices were way, way lower than today.
December 24th, 2006 at 11:18 am
I lived in Japan during the peak of its deflationary spiral- i would liken Japan’s real estate market to the current plasma tv market, everyone waiting for prices to bottom. Japan has 35% of the world’s savings, or on average a 115K per person, so I don’t think too many Japanese feel priced out of 400K Tokyo homes; they would rather keep their money until deflation ends as every yen saved keeps getting more valuable.
December 24th, 2006 at 10:58 am
“The Japanese RE market has been in continuous decline since its peak in 1989, and has lost almost 40% of its value over that time.
In addition, ignoring the lost opportunity cost of the mortgage payments on an overpriced asset makes no sense.”
Right you are. Another thing to note is that nominal prices have done better than real prices at times, due to general deflation.
In either case, even if Japan were close to nominal breakeven, it would be absurd to use such a fact to justify paying obscene amounts in 1991.
December 24th, 2006 at 10:24 am
ken said,
“I think the Japanese market is starting to get close to its prior peak now, and its been less than 20 years, so if you ignore the interest they paid to the bank they now have an asset that they can sell for close to what they paid for it, and they had all those years of living expenses paid!”
I occasionally hear similar statements about the Japanese RE market. Unfortunately, they are not true. The Japanese RE market has been in continuous decline since its peak in 1989, and has lost almost 40% of its value over that time.
In addition, ignoring the lost opportunity cost of the mortgage payments on an overpriced asset makes no sense. If ken rented in a similar situation, and invested the difference between his rent and what would have been the mortgage on a similar house, he would be much better off.
Take a look at these links if you don’t believe me:
http://tinyurl.com/woslr
http://tinyurl.com/yf7gys
December 24th, 2006 at 9:55 am
“Now how many have actually golfed and skiid on the same day, never mind the same week?â€
Ask any recent home debtor with 3 jobs, and boarders if they have the time and / or money.
December 24th, 2006 at 7:52 am
Speaking about the windstorm, there was a CBC report on a guy who was unlucky to be in the Stanley Park during it. No, he was not some early jogger or dog owner; this person actually lives there inside a several hundred year old tree. So there you go, the dilemma is false one. It is a trilemma: rent, buy or live in a tree!
December 24th, 2006 at 7:05 am
Breaking News: The extremely manipulative jackass I referred to earlier just posted the following on Jurrocks board:
“Plus the whole skiing, sailing, golf is quite a draw. Can’t get that in Tokyo, London, New York, LA, Sydney, Osaka, etc etc.
Actually, where else can you get skiing and sailing 20 minutes apart?”
When a guy who invents macroeconomic theory on the fly resorts to the oldest cliche in Vancouver real estate, the MARKET HAS PEAKED.
Honest now, how many have told out of towners about the 20 minute apart golf ski thing. All of you, right. Now how many have actually golfed and skiid on the same day, never mind the same week?
As for the ski to sail in 20 minutes, yes I see helicopters plucking skiers off the mountain and plopping them down on sail boats all the time. If your name is Richard Branson that is.
December 24th, 2006 at 6:19 am
Ken, you are surely jesting. In case you are not, google “opportunity cost”. Most people I know hold off buying trinkets when they know it will be on sale soon. What makes you think that people would be less inclined to do so when the “sale price” is $200,000 less? To each his own, but I think you are a vocal minority in thinking that 200K haircuts don’t sting.
December 24th, 2006 at 12:30 am
whatever said…
bc_cele:
As the recent weather has shown its not just prices that can go through the roof, but I’m not sure how that could be classified as a ‘positive’.
In the event of a windstorm knocking a tree through your roof I know which side of the renter/owner division I’m most comfortable with.
Doh! I’m going to give myself a 100 lashings with a wet noddle and repeat “sarcasm doesn’t come through on a blog” until I remember it.
On that note…I just got back from Afghanistan, and the first thing I thought when I got there was “..the real estate prices have to be high here..they have mountains..”
December 24th, 2006 at 12:07 am
“His henchman Aaron could really use some freako time
.”
Debating with Rob is a bit like ramming your head into a brickwall. The wall does crumble eventually, but it is not a particlularly enjoyable experience. It is a bit like debating with somebody who speaks a different language. I am not in the mood for taking a 1001 paces backwards and starting all over with Aaron.
Overall, though, Rob does debate in good faith. Unlike that other extremely manipulative jackass who can’t decide what his handle is.
December 24th, 2006 at 12:02 am
“I think you are correct in pointing it out. And now I feel really bad about some of my comments.
I am new to the blogsphere and had no idea that if you are joking you are supposed to end your post with
“
I don’t know who is anomymous who, but no the endless debate on bubble or not refers to the rest of us who are not interested in the best price of granite because we are not in the market or about to get out of it. It was not aimed at any one individual, anonymous or not. If railing for or against a bubble was a crime, yours truly would never see daylight again. And I would have company in the dungeons.
December 23rd, 2006 at 11:56 pm
Freako said:
â€Noticed that Chipman now classifies his links intoâ€
We all have our indiscretions, we are humans and make mistakes, you checked out Rob’s blog, there is no shame in curiosity, it’s a sign of intelligence.
December 23rd, 2006 at 11:09 pm
Ken:
“It doesn’t matter what the market does, if you can afford to buy the house you want to live in over the long term, it wont bother you if houses get cheaper in the short term.”
I plan to run a feature on Sundays. I will be named: Aaron Best’s Bests.
Do you mind if I run the above quote from you as a ” special guest” contribution this Sunday?
December 23rd, 2006 at 10:51 pm
bc_cele:
As the recent weather has shown its not just prices that can go through the roof, but I’m not sure how that could be classified as a ‘positive’.
In the event of a windstorm knocking a tree through your roof I know which side of the renter/owner division I’m most comfortable with.
December 23rd, 2006 at 10:45 pm
kittykorner sez:
or better yet can I borrow a feeling
eh? I’m not sure how I would lend that to you..
just remember its a freakn house, live in it.
exactly! Its a house to live in, not an investment. Even if the value drops in half its not like that *hurts* you unless you *need* to sell it. Just live in it and don’t worry about it.
I think the Japanese market is starting to get close to its prior peak now, and its been less than 20 years, so if you ignore the interest they paid to the bank they now have an asset that they can sell for close to what they paid for it, and they had all those years of living expenses paid!
It doesn’t matter what the market does, if you can afford to buy the house you want to live in over the long term, it wont bother you if houses get cheaper in the short term.
December 23rd, 2006 at 10:35 pm
Hey kityy korner, how much pot do you recommend I smoke before I can grok the true nature of your narrative?
December 23rd, 2006 at 9:01 pm
price goes up price goes down big deal its just part of the industry and if its gets too hot then get out of the kitchen.
just remember its a freakn house, live in it.
can i cry you a river …or better yet can I borrow a feeling
December 23rd, 2006 at 8:15 pm
I do not care how much prices go up or down; I will continue renting as long as my land lord SUBSIDIZES my rent, internet, cable, and hydro.
December 23rd, 2006 at 7:52 pm
I don’t bother going to Rob’s blog – he’s a decent sort but he’s a realtor and so is obviously biased toward people buying; his livelihood depends on it.
Aaron will say the most ridiculous things and apparently believes them, so there’s no point in arguing with him or any other bull at that blog.
I’m not in the business of converting people so I’m happy to let them wallow in their surety of future riches. They’ll find out they’re wrong soon enough.
December 23rd, 2006 at 7:34 pm
Freako said:
Anyhow, I thought he was a reasonable straight shooter, even when he tried to argue the impossible.
I’ve noticed your absence on Chipman’s blog lately. His henchman Aaron could really use some freako time
. He told me I should invite you back when I told him it was lucky you weren’t there. It was something to do with how the Provincial government would raise wages to support the house prices. Very funny actually.
Mostly Chipman has my respect but he does egg people on a bit. It’s often hard to tell home much is egg and how much is what he really thinks.
December 23rd, 2006 at 7:17 pm
Pope,
You have to think a little more positive. The downturn was simply due to all the lousy wheather over the past few weeks. i mean who wants to pump all that money into a new home when you can’t see all the new lamenent and gaudy new paint because the power is out. And let’s face it, granite counter tops are really hard to enjoy when there’s a tree obstructing the view.
So just keep reminding yourself that in the spring prices will go through the roof….unless they don’t and then your screwed.
December 23rd, 2006 at 6:26 pm
i am unwilling to read his manipulative rants
Well you certainly don’t have to read his blog, thats the great thing about freedom. I disagree with you on the term ‘manipulative’ though. I think he’s cagey and is hedging his bets, it may not be entirely forthright, but I don’t think its ‘manipulative’.
December 23rd, 2006 at 5:37 pm
“They don’t want endless debate on bubble or no bubble.â€
I think you are correct in pointing it out. And now I feel really bad about some of my comments.
I am new to the blogsphere and had no idea that if you are joking you are supposed to end your post with
December 23rd, 2006 at 4:20 pm
How old is Rob Chipman ? Was he in diapers in the early 80′s or is he a grizzled old vet ?
He mentioned that he was young and working construction during the 80′s collapse.
Anyhow, I thought he was a reasonable straight shooter, even when he tried to argue the impossible. But “real estate blogs” and “bear blogs”? I understand the need for separatation as people in the thick of real estate have practical concerns such as optimal renos or how to deal with tenants or where to get a good deal on granite. They don’t want endless debate on bubble or no bubble. But calling them “real estate blogs” and “bear blogs” is assymetric to say the least.
December 23rd, 2006 at 3:14 pm
ot – i personally can no longer can stomach spinman & his sidekick gumpy. i gave him the benefit of the doubt for a long time but as of late, i am unwilling to read his manipulative rants & gumpys amateurish crap.
December 23rd, 2006 at 3:07 pm
How about:
1.Fantasy blogs
2.Reality blogs
December 23rd, 2006 at 3:02 pm
Noticed that Chipman now classifies his links into:
1. Real estate blogs
2. Bear blogs
How old is Rob Chipman ? Was he in diapers in the early 80′s or is he a grizzled old vet ? Experience is crucial at this important juncture in the RE market. I wouldn’t take any advice from someone with less than 25 years in RE bizz whose seen both sides of the coin.
December 23rd, 2006 at 2:54 pm
freako: re how long the suspension will be..
You may recall that I’d estimated a 2-7 year range for probable peak to trough period.. recently I’m considering the lower end of that range as more likely.
I think we’ll likely play ‘catch up’ to the US as the skids come off.
The start of the plunge, the Wiley Coyote moment, could come as early as this Spring.
December 23rd, 2006 at 1:53 pm
It is just too risky to buy into this over inflated market right now.
That is just the thing. One reason that prices have gotten so high is that it is felt that it is low risk and high return. Once that mindset changes RE will get it both barrels. The question is how long the Wiley Coyote moment will be. Will probably feel like an eternity.
link
December 23rd, 2006 at 1:40 pm
I am sure there are a lot of buyers out there justified their high payments on the future value of their new asset.
Even then you aren’t realizing these gains until you actualy sell the house. Borrowing agianst it means you are paying interest on your own money.
If prices start to drop then there will be a lot of pissed of people.
The realization that they just paid for some “Baby Boomers” retirement.
It is just too risky to buy into this over inflated market right now.
December 23rd, 2006 at 1:30 pm
I think uncertain buyer nailed the OBVIOUS reason prices have gone down in a boom-time:
affordability.
Just because we’re all working doesn’t mean we can all afford to spend twice as much on housing.
Some of us also factor in the possibility of interest rate hikes over the next ten years.
December 23rd, 2006 at 1:00 pm
OT
Noticed that Chipman now classifies his links into:
1. Real estate blogs
2. Bear blogs
Interesting way of doing things. He could have done it a couple of other ways:
1. Industry fluff
2. Real estate blogs
1. Bull blogs
2. Bear blogs
1. Blogs
2. Biased blogs
December 23rd, 2006 at 12:14 pm
$200,000 over 25 Years = $1279/Month @6%
$1576/Month @ 8%
$1788/Month @ 10%
$300,000 over 25 Years =
$1919/Month @ 6%
$2289/Month @8%
$2683/month @10%
This is not including, Tax’s, Utilities, Car Payments, etc. It all adds up to a large monthly payment that will kill those who can just manage at todays, low rates.
Not to forget, at todays prices, you will need about $200,000 down just to have mortgages like that.
There aren’t too many first home buyers, current owners, that have that much equity.
December 23rd, 2006 at 12:06 pm
I wouldn’t pay too much for a Honda Civic just because of good economic times.
How about increased wages equals more money in your pocket. Instead it seems like society feels they have to spend everything they make.
Inflation is way ahead of wage increases. So this means people are borrowing to buy now. If interest rates go up then wham, no cushion.
December 23rd, 2006 at 11:40 am
I just thought of a possible interpretation of this price drop that brings me great comfort:
If prices go DOWN when the economic climate is great, then maybe they will go UP when the economic climate is bad!