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Friday free-for-all

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Here’s an open topic for Friday Feb 23rd. What are you seeing out there? Feel free to post anectdotes, questions and links to news regarding the local and global real estate market.

Here’s what I’m seeing:

-Anectdotal buzz about the Vancouver market heating up again this month after a four month lull. Will house prices stop dropping now?

-It’s getting more expensive to park in Vancouver. Heck its getting more expensive for everything here, are we seeing wage increases to match?

-Our neighbors down south continue to experience one of the worst housing slumps in their history. The NAR says the worst is hopefully over, but the builders don’t see a recovery yet.

So what are you seeing?

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TheVanMan

Warren,Sounds like you were probably very young or too young to remember the 1970s..I have known Mr. Shilling since the 70s, so he's been around longer than any young guns that you find in your local banks pretending to be investment or real estate experts.He's been through many ups and downs and had been ranked as the 3rd top stock market forecaster. Guest who was number #2? Warren Buffett (yet another investment guru). His impressive resume includes predictions of the1969-1970 recession (nobody predicted that).The 1973-1975 global recession (which has the similarities to what we are in right now). He also predicted double digit inflation in the late 1970s, the tech bubble and the RE boom that came later. He is also predicting mild deflation after the recession (this supposedly coming one). The same mild deflation Japan had been going through… Read more »

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Warren

thevanman said:2007 will be an interesting year. If his predictions come true, then I'm afraid a lot of those so called home buyers that bought out at the top will — read his 2002 prediction about the doom of the housing market..Ok… so the guy who predicted a housing bubble 5 years ago (which was basically the rampant growth stage) is now predicting economic collapse in 2007? Sorry but timing is everything… I can predict an asteroid hitting Vancouver, but that doesn't mean you should pick up and move to the southern hemisphere next week.For the record I'm not a bull, but its hard to read this kind of stuff "coming soon" for the last 3-4 years and keep believing it.If: 6. The insatiable U.S. consumer will spend until borrowing power is exhausted then what is the justification for:4. China… Read more »

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patriotz

And of course in the US interest only mortages (infinite term) and neg-am mortgages (negative term) have become increasingly common as the bubble has progressed.These "exotic" mortgages don't support prices long term, they set the stage for the inevitable crash, as we saw over a decade ago in Japan and see today in the US.

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mold

Of course on preview I see that Betamax beat me to the point with the 100 yr/ japan bubble comparison.If I start seeing a 100 year mortgage becoming common in Vancouver I'll be out of here until the spectacular crash.

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mold

RE: 100 year mortgages.Is there really demand out there for an apparatus to pass house debt on to the next generation? The 100 year mortgage is an assanine proposition that would only serve to make a crash worse (ala Japan).

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betamax

Funny enough, I keep hearing about the 100yr mortgage often these days.No doubt a response to the growing awareness that affordability limits have already been reached. The premise of perpetually high appreciation requires one to fabricate increasingly questionable rationalizations to support it despite the obvious limitations.If anything, the reference to 100 yr mortgages should conjure nightmare comparisons to Japan; that it doesn't suggests how blind to risk everyone has become.

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mold

If we don't warn people, how would we differ from the deceitful shills?I respectfully disagree. I don't presume to take responsibility for other peoples financial decisions. I'm not out there selling people on overpriced leaky condos. If they ask my opinion I'll let them know that yes, prices CAN drop, and no, it's not actually different this time, but in the end its their decision.If people feel they NEED to buy that place at any price, and they can afford the monthly payments for now, who am I to tell them they shouldn't? And besides, why do I want to have to bid against these people in the future? Let em' buy.

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TheVanMan

Here's what I read from Gary Shilling &Co website. He's got an interesting area where he puts his predictions to work. Here are the predictions for 2007.JANUARY 2007“The 2007 Investment Outlook: 12 Nonconsensus Themes”: As was true in 2006, six background elements will dominate the investment climate in 2007:1. The world is still awash in financial liquidity2. Inflation remains low3. So many investment returns are low4. Speculation remains rampant5. So investors assume more risks to achieve expected returns6. The insatiable U.S. consumer will spend until borrowing power is exhaustedIn this climate, we foresee 12 investment themes, eight of which are likely to unfold in 2007 while four will probably work but maybe not until later:1. The housing bubble will burst. If so,2. The Fed will ease; meanwhile, the yield curve will remain inverted3. U.S. stock prices will fall, perhaps below… Read more »

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Jesse

"Yeah, I think we can safely assume that any further increases in RE prices are just a dead cat bounce."I think you will find this cat is made of rubber. This market is not soft: supply is slow coming online, people have jobs plus assets, and lenders have lots of cash to loan out. I have never witnessed a price reversal predicted by some bears but maybe I'm too young. If such a reversal comes, like life, it will be anticlimatic due to all the FUD.That said, it appears prices are choppy right now. I hear anecdotal stories of over-list and under-list. Doesn't suprise me for this time of year as the spring pricepoints shake out.Given the choppiness, I am still sticking to my +5% appreciation prediction for 2007. Though I think Realtors are going to feel the heat this… Read more »

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patiently waiting

Someone in my family overpaid for a larger house, at listing price in a nice area. They were going a bit up the property ladder. I'm not happy about what they paid and when they bought. They also agreed to buy without requiring their current house sell first which really pissed me off.BUT…If they sell their old house quickly (while the market is temporarily, stupidly hot for some reason), the damage is minimal. I've suggested that they forget about ANY renovations on their old place and just get it on the market NOW. Theres a leak they should take care of, THAT'S IT.Also, fortunately, they can afford this (very successful business) and would have a minimal mortgage by Vancouver standards. But this is a little close to home and is stressing me out right now. For the moment, I've switched… Read more »

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realtor88888888

"So what are you seeing?"The general consensus among my circle is, that prices have come down a tiny bit, but are set to take off again, and will keep going up until the Olympics, beyond 2010, the 100 year mortgage will come to the rescue.Funny enough, I keep hearing about the 100yr mortgage often these days. Is this the new myth to go along with the running out of land bs?

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squidly66

..albertabubble.blogspot.comfor albertanssorry to keep using your page

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van-realestate-crash

devilsadvocate said… Lou: Even if you can get condo's 50 cents on the dollar in the future, why do you want to discourage other people from buying now? Do you really want to have to bid against them in the future?Everyone who can buy now should! Don't wait! Because, at this stage the question is not whether it is or not a bubble, but rather when will it burst.The financial devastation will be enormous for those who will not be able to ride out the 10 to 20 year slump. If we don't warn people, how would we differ from the deceitful shills?

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** Ego **

2br condo in Coal Harbour. Only $5500/month!!!http://vancouver.craigslist.org/apa/283959764.htmlI would like to see the idi…, ehm smart person who is willing to pay this much…:)))))

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squidly66

a new blog site for alberta bloggers has surfacedalbertabubble.blogspot.com

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devilsadvocate

Lou: Even if you can get condo's 50 cents on the dollar in the future, why do you want to discourage other people from buying now? Do you really want to have to bid against them in the future?Everyone who can buy now should! Don't wait!

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Cecil

There's an article about VHB's blog-stopping over at the Tyee:http://www.thetyee.ca/Mediacheck/2007/02/20/VHB/

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squidly66

dont want to fill your blog with alberta trendsi am going to post an edm sitesince the calgary one is now suddenly gone…edmonton-housing.blogspot.comthanks for letting me use your site

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squidly66

in the hope that some of there readers will read herethanks..jc..moe..rej..and all the calgary bullsi enjoyed our debatesmost thanks and congratulations to robgood luck in the futureand good luck and future enjoyment to all the calgary bloggers

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squidly66

something strange is happeningcalgary housing blog site closing down3 housing blogs in 6 daysweird

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domus aurea

Well, here is some more evidence on the dead cat bounce. A couple of friends bid for an apartment in the Caper's building on 4th avenue. They were outbid and there were 3 offers in total. Property went for above list (I think by $15000 or so, roughly 2% of transaction value). My friends are quite depressed about it, but i told them this might be the best thing that ever happened to them…..then they told me to shut up!When I hear these stories with all that is happening in the US (se defaults and mortgage lenders' crashes) I just cannot make sense of it…..VHB where are you?

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good

We just sold our townhouse for above list price in under 1 week, had 3 bidders going to war over it. Was not undervalued, fair price for well presented property.Several realtors told me I should make a living as a designer… haha, and I'm straight ! Go figure…We had 10 showings over that weekend and it was not even an open house.later

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** Ego **

Another underlying factor is that Mortgage Financing is starting to tighten up.Yeah, I think we can safely assume that any further increases in RE prices are just a dead cat bounce.

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** Ego **

The fire insurance is up by $6,000 per year for the 11 unit apt. building where I live.

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hibernating bull

Parking rates doubled in January at the Impark lot on Seymour & Nelson. $20 per day is a bit excessive.

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