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March 17th, 2007 at 10:08 am
“It is precisely because they are required to keep fractional reserves that the money supply is contained.”
Reserve requirements are not legally necessary for all forms of money.
March 17th, 2007 at 10:04 am
You know the world has gone mad when the 1 bedrooms off of The Drive that you looked around in 2001 ($80,000) are now selling for $250k+. They even have a couple around Kitchener for $300k. Even with a fantasy 50% correction they would still be expensive.
March 17th, 2007 at 9:59 am
Patriotz said:
Please. Keynes advocated loose fiscal and monetary policy during times of high unemployment and falling asset prices (like the Great Depression you know), and Typical neocon approach – try to tag your own bad policies on your opponents.
I say:
I know where you’re coming from.
Problem is, During the Great Depression and during the current Japanese deflation era, both central banks “DID” provide a lot of cash infusion to try and stimulate the economy from its near death 911 state, exactly as Keynes proposed. They dropped rates more than 6 times during that period. Albeit, Japan did raise rates during the deflation period for a short while then again drop it to no avail to rescue property prices from further deflation, but it did work as expected on the economic front because Japan’s general inflation actually increased during that era.
However, during that period, it wasn’t because there weren’t enough cash to infuse to jump start the economy — there were, but simply the banks refusal to lend out of fear on that one particular asset class rather than any general economic sense.
US govt does not set FED policy. FED sets its own policies and operates as an independent agency and only accounts itself to the major banks and not to the people.
That why govt officials don’t have a clue what the heck the FED is doing until the hearing or if you can decipher its flair of economic pep talk.
And if the FED is running opposite to the Keynesian economy as you had so claimed, why then the FED chair Mr. Greenspan convinced the necessity to engineer the rescue of Long Term Capital Management in 1998, which at that time lost 4 billion dollars!?! Also, why did Mr. Greenspan engineered again the rescue of the internet bubble by infusing capital by cutting rates to make the 2001 recession rarely a blip to register in the radar screen while shares like Google and eBay with its PE still out of historical norms, and possibly the reason behind the current run of the RE boom. So successful in this engineering that people are starting to believe that the FED can do many magical things to bail people out of any economic misery.
And why is the FED keeping track of M1, M2 and M3 money in its financial publication report if they are not following the Keynesian economic theorm, these money tracking aren’t necessary then right? And why people are worried about an inverted yield curve, since this in itself an anomaly.
Since the dawn of time, governments had tried issuing worthless money during war time. The term “Green Backs” and “Not Worth A Continental” didn’t just come out of thin air. When Nixon refused to redeem the 35/ounces gold to a dollar back in 1971, that spelled the end to gold backing on paper currency. Since then, the only backing we’ve got for our paper money is the interest rate.
You said:
budget surpluses during times of low unemployment – exactly the opposite of current US gov’t and Fed policy.
I say:
I think you are confused..
Budget surpluses mean a surplus in the current tax revenue, because during low unemployment, more people work and contribute to a higher tax base. Good for the government. However, government needs to keep spending in order to keep the economy going. That’s why, the US government runs an alarming budget deficit and so do we in BC.
However, when the economy is overheating, 2 things you see will be done if they practice Keynesian economy. The passive way government can do is to raise taxes related to the inflated asset — we already got it in the form of property tax increase and Translink. If that doesn’t dampen the mania, then the more direct way is to actively deflate the money supply by raising interest rates, the bust stage.
Stay tuned for an interesting new chapter..
March 17th, 2007 at 9:21 am
Definitions of trustafarian:
http://www.urbandictionary.com.....ustafarian
March 17th, 2007 at 9:17 am
I have to wonder whether trustafarians are becoming less common in Vancouver with its high cost of living. Perhaps they are in the Gulf Islands or Nelson. I think its quite probable that “artistic” hippy types have been fleeing this city over the last few years.
Didn’t “The Drive” have lots of low-cost rentals a few years ago. These are now mostly gone as displaced tenants (rental buildings ripped down for luxury condos) from the westside squeeze into those parts of East Van. I know from apartment hunting last year that rents in that area are shocking for what you get.
March 17th, 2007 at 9:14 am
I know a trustafarian layabout. His mother passed and left him with enough money to retire to a life of leisure. Before this aided retirement, he was a ‘dancer’ and yoga guru. He is a complete flake and he owns a million dollar plus property on the North Shore.
March 17th, 2007 at 8:52 am
patiently: i don’t personally know many trustafarians now, I shouldn’t have given that impression. I met some on arriving here in the early 90′s. They were living off wealth left them by parents. None worked, and some were involved in esoteric and arguably flakey pursuits. (I personally have a great deal of respect for certain pursuits without easily definable utility, like making art, but it seems very different if the pursuing is done on one’s own tab).
March 17th, 2007 at 8:42 am
Drachen said:
Actually the new plant is going to Ontario despite many millions of dollars in tax breaks and other incentives offered by several different states to locate there. Toyota’s main reasons for the decision:
1) They don’t have to pay a huge amount for health care, just some extended coverage.
2) Well educated employee base.
I personally think that’s mostly PR talk, because why didn’t Toyota sets up shop here in Vancouver? We have a well educated employee base and health care in Vancouver is covered by the same universal health care as in Ontario. Why not set it up here in Mission or Surrey? I think Vancouverites deserve those good paying jobs don’t they? The reality is, the plant is in very close proximity to Magna International and Linamar Corp, both auto parts outsourcer, especially Linamar Corp (very cost efficient) and the cost of living in Ontario is very competitive and attractive for young workers as opposed to Vancouver, plus cost logistics and demographics to serve the Canadian market makes more sense to have the plant in Eastern Canada rather than in the West or in the States.
But it does not stray from the fact that, they aren’t setting up new shops in Detroit anymore..
March 17th, 2007 at 8:31 am
Rentah, I don’t know many trustafarians. Are they living well or simply subsisting on handouts from their parents?
One thing that runaway mentions is that people here don’t have the sense to move to greener pastures. To the extent that I know of possible trustafarians, they seem to be underemployed children of the middle class who lack any direction in life…and they do have some kind of PS education.
March 17th, 2007 at 8:16 am
the pope started by saying I notice that emotions seem to be running fairly high lately
I think we’ve all noticed this on one blog or other.
What does the fever-pitch indicate?
March 17th, 2007 at 8:11 am
Yeah, I totally agree with runawayscreaming too.
It will be interesting to see how a housing bust changes this city. A lot of retirements are being planned around home equity lending products. I’m sure some young families are also basing their plans around spending more equity.
Do banks ever take back HELCs or recall longterm mortgages that are well above the asset value?
I understand that little of Vancouver’s growth comes from migration within Canada. Vancouver is not a retirement destination although we will age as a city.
March 17th, 2007 at 8:10 am
Re the arrogant:
I think we’re on shakey ground complaining too much about arrogance. In all cities during booms there are folks who become successful beyond their talents and humility.
All markets have a percentage of participants who’ve got rich purely by luck (the ignorant ones put it down to talent, the smart ones know they’ve been lucky).
I know it’s very naturally difficult for those of us who’ve these past few years seen the bubble in RE for what it is to watch ignoramuses strutting their self-presumed speculative brilliance. But this really does come with the territory. We can’t really blame Vancouver for it.
Rest assured that the vast majority will get cut down to size (they have to, there is no other possible resolution), exactly as happened with Nortel holders in the early 2000′s.
And we will then be left with the rest of the Vancouver that runaway describes, still not a pretty picture.
We could embellish his description with an aside about the apt named ‘trustafarians’. When I first came to Vancouver I was impressed by how many boring, uneducated layabouts there were living on their aging parents’ goodwill and, in some cases, their aging parents’ prior hard work.
March 17th, 2007 at 7:46 am
runawayscreaming:
Another thanks-for-the-post. Sums up much of what I fear about Vancouver.
As I read on another blog eons ago (sorry i can’t cite the poster), “I love Vancouver, just not as much as Vancouver loves Vancouver.”
March 17th, 2007 at 7:41 am
drachen said:
“Actually the new plant is going to Ontario despite many millions of dollars in tax breaks and other incentives offered by several different states to locate there.”
The Ontario and federal governments are subsidizing the new $800 million plant with $250 million.
In comparison, another $800 million Toyota plant in Texas received about $133 million from the govt there.
Generally, Ontario offers heavy subsidies yet is losing auto manufacturing jobs as plants close.
March 17th, 2007 at 7:40 am
Really, the asshole factor in Vancouver is getting enormous and there appears to be a general decline in civility in Vancouver.
Runaway, your “debunking the myth” post needs its own web site. It is destined to become a blogging classic.
March 17th, 2007 at 5:59 am
banks don’t lend money on a 1:1 basis — 1 dollar deposit to 1 dollar debt and banks make the spread of the interest. Instead, they lend on a fractional basis of the depositors’ capital, thus the term fractional reserve banking or fiat money.
You’ve got a bit of a logical disconnect here. If banks actually lent out money 1:1, money supply would expand infinitely. It is precisely because they are required to keep fractional reserves that the money supply is contained.
And of course fractional reserves decrease the profits that the banks make on interest spreads.
Fiat money has nothing to do with fractional reserve banking. The former simply means money not backed by physical assets (what we used to call paper money) and goes back to ancient China. Fractional reserve banking goes back to medieval Venice (if not further), and they used gold currency. Someone deposits 100 gold ducats in your bank, and you lend, say, 95 out and keep 5 handy for transactions. Same multiplier effect.
March 17th, 2007 at 5:15 am
runaway, I also congratulate you. Seems hard to comprehend, but once upon a time Vancouver was a real city with real business and industry, where middle class people could have a normal life. This seems to have been killed by the early 1980′s recession and it has been replaced by some sort of bogus economy powered by borrowed and offshore dumb money. Time will tell whether this is sustainable.
I do disagree about retirement, Vancouver seems to be about the last place in Canada anyone could or would retire to. The Island and the Okanagan for those who can afford it, yes.
The run up to this insanity housing bubble has almost everything to do with the legacy of Mr. Greenspan and his Keynesian money policy
Please. Keynes advocated loose fiscal and monetary policy during times of high unemployment and falling asset prices (like the Great Depression you know), and budget surpluses during times of low unemployment – exactly the opposite of current US gov’t and Fed policy. Typical neocon approach – try to tag your own bad policies on your opponents.
March 17th, 2007 at 3:59 am
Runawayscreaming
I think you pretty much hit it with your post. I like Vancouver, but it does have some big drawbacks….
Brilliant!
March 16th, 2007 at 11:12 pm
runawayscreaming,
That was a beautiful post.
You’ve hit the nail on so many points, it would be hard to comment on all of them. Damn, that was good.
March 16th, 2007 at 10:38 pm
CLARKE(whats in rate of pay)
wanna hear some words from management.
if you make $10.00 per hour till age 65.
$20.00 per hour can cut your working age in half of 65.
or you will be calling sick twice in a week.
or you will change your availability 3 days per week.
that’s the excuse employer got to keep us hosing.
employer will run out of employee’s
and no bussiness will run.
thats chemistry of life.
I don’t realy like that but we have no where to run.
if we want to raise our salary we have to run something our own and we also not going to pay some one what they deserve does that make sense.
not meant to hurt just sharing logic that’s hidden
March 16th, 2007 at 10:09 pm
The late stage bubbles have one common characteristic – the price goes up together with rising inventories.
How is this relevant to Vancouver RE? The GVRD inventory is rising (10092 as of last week) and the price keeps going up.
I am going to enjoy the Bear RE show unfolding in Vancouver this Spring.
March 16th, 2007 at 9:36 pm
Warren wrote: “Coming from a poor single-parent household I haven’t had anything handed to me, yet somehow I managed to get through school without loans (don’t get me started on graduates whining about those), and now have a decent career and some property. I have little patience for whiners.”
I think you may be overestimating the fabulous opportunities available for young people in Vancouver these days.
I graduated from a university professional program 10 years ago. Even then my average classmate had accumulated $50,000 in student loans. I don’t know when you went to school but it has become a lot more expensive in the last 20 years. Students these days may have to take jobs outside their chosen careers just so they can pay off their increasingly burdensome student loans.
Of my graduating class, almost no one is working in Vancouver. There are no opportunities in Vancouver. Most jobs in Vancouver are very dead-ended with no real opportunity for advancement. I have lived and worked in other cities and Vancouver is unique. The pay is low and there is heavy competition for any job paying more than $10/hr.
I think Vancouver is comparable to St John’s Newfoundland. People want to live in both those cities but sacrifices will have to be made. In fact I would say Vancouver is worse than St John’s because the cost of living is so high in Vancouver but the pay and the career opportunities are similar.
I have also noticed that there are a hell of a lot of people in Vancouver working at crappy jobs way below their skill level and way below their level of qualification. It’s almost as if people are taking it as a personal challenge to demonstrate how much suffering they will put up with to stay in Vancouver. It’s a marathon of self-deprivation and it’s more than a little bizarre. At least people in Newfoundland have the sense to leave and find greener pastures elsewhere. Vancouverites seem to believe in something that does not exist and they would rather self-immolate than remove themselves from their neurotic and self-destructive attachment to Vancouver.
Vancouver also has a rapidly increasing number of insufferable empty-headed bullshitters who have convinced themselves they are worthy because they got lucky flipping condos. Really, the asshole factor in Vancouver is getting enormous and there appears to be a general decline in civility in Vancouver. St John’s is much more civil. People in Newfoundland are honest and sociable and they will not run over you with their Range Rovers while you are pushing your baby carriage across a crosswalk (if you can afford a baby in Vancouver).
Business standards are very low in Vancouver. I think that has something to do with Vancouver being the scam capital of the planet. What other city could spawn the Vancouver Stock Exchange?
Businessmen in Vancouver always seem to be scamming, even if they aren’t directly involved in the criminal activities that are the mainstay of the British Columbia economy. That’s not a good example to young people and I would recommend that young people move to cities where scamming is not routine.
There is a very adversarial relationship between employees and employers in Vancouver. Employers in Vancouver appear to be trying to get away with whatever they can and a lot of Vancouver businesses are more than a little bit dysfunctional. I am sure I am not the only one working in a Vancouver business where there is a nonsensical effort to prevent adequate paycheques, even if it means the company may collapse. Young people should not be exposed to that kind of hopeless stuipidity.
So, overall I do not share your boundless enthusiasm for opportunity in Vancouver. Really, Vancouver is a retirement town, a condo-flipping town and a drug town. There’s not much else going on. It’s simply too expensive to do anything else in Vancouver.
March 16th, 2007 at 9:28 pm
Thevanman “That is exactly why Toyota has the assembly plant in Tennessee”
Actually the new plant is going to Ontario despite many millions of dollars in tax breaks and other incentives offered by several different states to locate there. Toyota’s main reasons for the decision:
1) They don’t have to pay a huge amount for health care, just some extended coverage.
2) Well educated employee base.
March 16th, 2007 at 8:49 pm
SIGNAL
Survey conducted by cnn.54% american think their economy will pop back up with in year.
Canada
Signal of capital gain tax reduction in up coming fedral budget (reinvest with in six month)
Signal of increasing amount of basic tax free amount.
Surefire hit just released report for real estate up up up rainy windy up
later prediction is stormy up(busy)
March 16th, 2007 at 8:20 pm
Clarke said:
While the employment situation is good, accessing good paying jobs is not easy, as there really are not that many of them and there is lots of competition. While I would agree there is an entitlement thing going on, I would be hard pressed to employee of the month regularly for $9/hour.
I say:
That is exactly why Toyota has the assembly plant in Tennessee rather than in Detroit or Dell Computer in Texas and that is also why we are mostly stuck with low paying service jobs here in Vancouver. Companies outsource supposedly good paying jobs to the cheapest pool of labour with the lowest cost of living. Number #1 cost would be housing.. That’s why, if American companies aren’t outsourcing it to India or China, they will to the cheapest part of the country. Talented people are highly mobile — they can move.. Most companies keep a core of creative group team here at excellent pay. But that’s it. Everybody else get paid much much less. So don’t expect wage inflation to help even out afford ability in housing. It doesn’t happen that way. Not in Silicon Valley and not even in Jackson Hole, Wyoming — aka the Rockefeller wealth belt.
Here’s food for thought..
The run up to this insanity housing bubble has almost everything to do with the legacy of Mr. Greenspan and his Keynesian money policy and the fractional reserve banking.
Just so everyone knows, banks don’t lend money on a 1:1 basis — 1 dollar deposit to 1 dollar debt and banks make the spread of the interest. Instead, they lend on a fractional basis of the depositors’ capital, thus the term fractional reserve banking or fiat money.
Problem is, the lending has gone really out of whack that it had produced an inverted yield curve, a sign of possible looming recession. Again, part of Keynesian economy. Problem #2 is that, most central banks including ours adopt similar economic policies too. So if the Americans suffer a recession, you can bet your dollars that we should too.
If the bubble do pop, lending institutions don’t want to become homeowners by default. They are not set up to manage properties. They are set up to hand off mortgages only. Foreclosed properties are money pits. So, the threat of a wave of foreclosures is bad news to them. For us side liners with cash and a good credit rating, it may be a deal making oppportunity. Maybe, no money down deals with super low rates will be the hook to lure us on repo homes. Beggars can’t be choosers right?!?
In the next recession, people who lose their jobs will not be in a position to pick up and leave to hunt for new jobs. They will be forced to take any kind of job just to maintain their inflated mortgage payments on 1 or many properties. This will greatly benefit BC employers who’s looking for workers with less choosy wage demands . They will be able to secure the services of creative people who would not normally work for such wages.
n the next economic downturn, the mortgage payment is going to be the equivalent of putting on the nicotine patch while trying rid of smoking . People will do almost anything to hold onto their homes. This is why mortgage lending is preferred by lenders, even the subprimes. They understand the commitment of home owners to maintain occupancy. To this is now added the maintenance of credit. Once the person has his home sold out from under him, he is trapped. The debt remains but the house is gone. And not to mention that he or she will forgo the excellent credit rating they’ve worked hard so long to get. You know, these days, it’s difficult to do anything without some sort of credit. Even booking a hotel requires a credit card for crying out loud!
So yes, BC will be like Silicon Valley. Homes will remain extremely priced. Not sure how low it will go if it does crash. But one thing is for sure though, the higher and longer it goes, the further down it’s going once the party’s over..
However, we have an aging population. Expensive homes demand people with good pay to afford them. You need young people to buy these homes off old people. No pun intended. But what’s depressing is to see many young British Columbians here trapped in low paying jobs! Many of them hold degrees and diplomas which help them no where. Cause companies that want them aren’t locating here — it’s too damn expensive. So they slave away like workers in sweat shops. Now, there are service jobs that pay a little bit more than the norm, but how long will that last?!? When the party’s over and reality sets in, many unemployed will simply fight over any remaining jobs available, thus driving down wage gains.
We’ll probably have mild inflation going forward, but for young people to afford these 1 mil homes, home prices need to go down or corporations start coming here in mass numbers and set up shops that will pay good wages. Somehow, I suspect scenario #1 to be a more realistic outcome..
March 16th, 2007 at 8:17 pm
the provincial government should get rid of the property transfer tax and replace it with an exit tax. That way, it doesn’t penalize those that buy to live.
Getting rid of the PTT would just result in prices going up by the amount of the tax, and the buyer paying the same net amount. The market would still clear at the same out-of-pocket amount from the buyer.
However you are spot on with the second idea – stopping speculation. That is what is responsible for the ridiculous runup in prices. But the current government, and not the NDP for that matter, would never, ever, enact any policy that would put downward pressure on prices. Remember 2/3 of the population are owners, and they have a higher voting turnout than renters. No government is going to want to take the blame for a price crash.
March 16th, 2007 at 7:19 pm
Senile Greenspan quote: “If we could wave a wand and housing prices go up 10 percent, the subprime mortgage problem would disappear,” he said.
March 16th, 2007 at 6:15 pm
Because of my job, I have ready access to lots of data on businesses and the salaries they pay. I never cease to be amazed at how low salaries are in BC compared to the costs of living. The city has a reputation for affluence that I have a hard time comprehending.
While the employment situation is good, accessing good paying jobs is not easy, as there really are not that many of them and there is lots of competition. While I would agree there is an entitlement thing going on, I would be hard pressed to employee of the month regularly for $9/hour.
March 16th, 2007 at 3:51 pm
vintage said:
There are jobs aplenty out there, that’s for certain. But most of them do not pay nearly enough to survive in this bizzare place of ours.
Take any service related jobs here:
starting wage in retail is still below $9.00/hr… store managers are making $12.00/hr on salary… which in reality means they end-up working even longer hours for the same pay.
Well, I’ll agree that its tough to make do with those kinds of jobs. But that’s what they are: starter jobs. There seems to be a sense of entitlement that people think they deserve something when they get out of school (or college, or university). They think they should get $60k/yr to start, and a house with a white picket fence. Guess what? You aren’t entitled to crap.. you have to work your way up like everyone else. You may have to (gasp) rent, or even (gasp-gasp) get a room mate to share with.
Coming from a poor single-parent household I haven’t had anything handed to me, yet somehow I managed to get through school without loans (don’t get me started on graduates whining about those), and now have a decent career and some property. I have little patience for whiners.
Seniors, the disabled, and others who can’t work I sympathize with, but a lot of people out there are expecting life on a silver platter.
March 16th, 2007 at 3:02 pm
SFH listings in Point Grey jumped from 22 to 26 today. Not sure if any are relists.
March 16th, 2007 at 2:29 pm
Real estate . . . as a speculator, I’m all for no restriction on property sale/purchase. But man, for your average family in Vancouver, the provincial government should get rid of the property transfer tax and replace it with an exit tax. That way, it doesn’t penalize those that buy to live.
Make the tax graduated based on the length of holding time. This should discourage flippers and speculators, and encourage true investors.
Ahkenaten
March 16th, 2007 at 2:06 pm
Ha ha ha ha ha, kudos to Vancouver Sun …
At least places like California that attracts the best and the brightest happens to also pay the best and the most generous. You want talent to come; you’d better be prepared to pay. My brother still lives in a Van burb and makes somewhere in the high 80K, and he can’t afford to take a decent vacation. A family with 2 kids and a wife staying home, one needs to be making over a 100K in order for life to be comfortable in Vancouver. Vancouver Sun has it right. The best place on earth is only for the retirees from Europe/US/Asia. Ha ha ha ha ha! Take a look around you, how many corporate head offices are left in BC. Telus? From I hear, they’re preparing to move to Toronto. After that, who’s left and how big are they?
It is a well know fact that most businesses are small to medium size that can’t compete on a global scale. Why then would an expat British Columbian working at multi-national corporation come back?
It’s lovely to speculate in real estate in Vancouver when everyone’s clamoring to buy and for the foreign smart money (anyone outside BC), they would have taken all your money out (in the form of capital gains) by the time the market tanks leaving you holding the bag.
I love Vancouver, BUT, life is just as good elsewhere. I can always come back for a skiing holiday to Whistler.
Ahkenaten
March 16th, 2007 at 1:15 pm
“This is not Alberta (or Afghanistan) where you get $21.00 to work at Tim Horton’s.”
You have to wonder how “desperate” businesses are for people if they are not willing to raise their wages.
March 16th, 2007 at 12:57 pm
Anyone check out the article in the Sun that said that Canada is “the next hotbed” for the subprime lenders. Its like that movie adrenaline where he has to keep doing dumb stuff just to stay alive.
March 16th, 2007 at 9:25 am
I meant department managers, sorry.
March 16th, 2007 at 9:22 am
warren said:
“No doubt there are jobs out there for anybody who has the motivation to shower and leave their house every day. In this environment the “advocates for the poor” really piss me off”.
There are jobs aplenty out there, that’s for certain. But most of them do not pay nearly enough to survive in this bizzare place of ours.
Take any service related jobs here:
starting wage in retail is still below $9.00/hr… store managers are making $12.00/hr on salary… which in reality means they end-up working even longer hours for the same pay.
All these jobs where all you need is to shower and show up do nothing to get you from under the powerty line. It takes true character to get up every morning, go slave for 8 hours and still starve.
This is not Alberta (or Afghanistan) where you get $21.00 to work at Tim Horton’s. This place is a joke.
March 16th, 2007 at 8:58 am
blueskies: I’ve seen ads for the ‘rent to own’ thing, but I havent looked into it. I’d be very careful about any agreements you sign and have a lawyer look over them before you do.
March 16th, 2007 at 8:54 am
note how rc never finalized the ‘vintage’ wager, but we know it’s essence, right?
We know its essence, but without the specifics and somebody tracking it we won’t know how it turns out.. It doesn’t look like Rob will be tracking it, so who will?
Pope? Mohican? Rentah?
March 16th, 2007 at 8:39 am
OT … has anybody here checked out the “rent to own” scenarios?
is there value in this type of arrangement or are the putative “landlords” desperate for warm bodies to cover the mortgage and ancillary
costs?
your thoughts?
March 16th, 2007 at 8:35 am
Found this article on Ben’s Blog:
http://tinyurl.com/yoq9sx
It looks like the collapse in Florida has also hit the rental market. Flippers caught unable to flip have been putting their houses onto the market in droves making them almost as cheap as apartments.
I remember a while back trying to grasp why the rental market was so tight with so many people buying so many condos presumably not to live in. Does it seem plausible that with 20 percent a year appreciation you would eat all your carrying costs to avoid the hassle of tenants and to streamline your flip.
That would mean a double whammy for speculators if the market turns. You can’t sell and you can’t rent your place for very much. Interesting possibility anyway.
March 16th, 2007 at 8:30 am
MillionPitfall:
I’m watching the westside, where I think we are about to see an inventory spike: lots of homes being prepped for market in the $1M+ range.
It’s going to be interesting to see where the weaknesses in pricing first appear: condos or high-end?
March 16th, 2007 at 8:19 am
patiently,
Maybe you work with me?
Its the same around my workplace.
No doubt there are jobs out there for anybody who has the motivation to shower and leave their house every day. In this environment the “advocates for the poor” really piss me off.
March 16th, 2007 at 8:07 am
The housing market seems to be hitting some affordability walls lately. A lot of newly constructed homes are just sitting on the market unsold. Open houses every week for months and still unsold.
Listings of a million plus keep increasing. Unless you have sold a home for a good profit, have a large savings account or extremely well paying jobs, most people do not qualify for mortgages large enough to buy million dollar plus homes.
The higher priced homes sales are stagnating and the lower priced homes are rising in price, inventory is increasing, sales are slower than last year. It will be interesting to watch the results.
March 16th, 2007 at 8:02 am
vintage:
1. great analogy re ‘the village’
2. good anecdote re quality of workers
3. aside: note how rc never finalized the ‘vintage’ wager, but we know it’s essence, right?
March 16th, 2007 at 7:43 am
“Here comes the wage inflation.”
It is a near certainty at this point that we are going to start seeing some nasty inflation numbers which will put the central banks into a tizzy. Especially because the housing markets are weakening and now they will be forced into raising rates or at a minimum keeping them where they are.
March 16th, 2007 at 7:26 am
That article about BC’s cost of living is great. How many people do you think realize that there is actually life past the forest? Remember the movie “the village”? It kind of feels like it around here, in this place that is the best and only one in the world to live… supposedly.
My wife works in retail and as a manager she gave up trying to staff her departrment with anyone at least semi-reliable. She’s been lowering her expectations to a point where they would hire ANYONE who’ll show up to work everyday at a right time. All they can find is useless, slow and immature teenager drop-outs that are to limited or to lazy to have found jobs in construction by now. And that, believe me requires a lot of effort.
On the other hand my employeer has extrememly hard time filling in jobs in R&D and marketing. They offer competitive wages, benefits, employee RRSP program, nice working enviroment… and are having no success at all.
I’m a single guy in a once three-people department. But just like patienly waiting I’m simply doing what I can and looking for another job.
In Winnipeg.
March 16th, 2007 at 7:09 am
“I’m getting the work of three workers piled on me because my employer can’t/won’t properly staff the place. I’m not gonna kill myself because there are not enough people in my department. What are they gonna do, fire me? “
Where I work they haven’t been able to find a qualified guy and one willing to flip into cover all the other guys when they go on holidays and extra jobs we can’t do cause you need 2 guys so we get loads of overtime the last year. Used to be they would be lining up for a job like this just for the opportunity of moving up to other areas of the company and they can’t find anyone.
Something has to give here sooner or later, economies/companies can’t keep running on empty forever.
March 15th, 2007 at 10:40 pm
I’m getting the work of three workers piled on me because my employer can’t/won’t properly staff the place. I’m not gonna kill myself because there are not enough people in my department. What are they gonna do, fire me? No, I’ll do what I can and look hard for a better job. The market is on my side. Here comes the wage inflation.
March 15th, 2007 at 10:36 pm
.. oh yes, and extra bonus if you’re interested in the US market.. Freako posted this link in an earlier thread, its a great clickable housing market graph for major markets from the Case/Shiller index.
March 15th, 2007 at 10:32 pm
I notice that emotions seem to be running fairly high lately, lets try to keep it civilized this time.. personal insults going back and forth get boring to read.