Here it is, your rainy friday free-for-all open topic post.
Whats going on out there?
-City staff moves to protect rentals
-no byline column in the Sun says bad idea
-a critical look at the Liveable Region plan
-What boomer buyers might look for
-US economic growth at 4 year low
-Pacific NW & Texas not seeing the slump
What are you seeing? Post you news, anectdotes, links and what-have-you here!
exx- thats a lot of listings, but it's not uncommon to see people trying to flip assignments around the lower mainland.. It really looks like we're overbuilding at a time when prices are knocking demand back.
<a href="http://burnabycondo.com/display_condo.php?mode=moreinfo&id=772http://burnabycondo.com/display_condo.php?mode=mo… />Is it just me or is that a lot of listings for a year old condo…
Copperstone is in a fugly industrial area. There's a skytrain station close by, but no other redeeming amenities…unless you consider crack whores amenities.
rentah,There are a couple of Copperstone units on the MLS that the builder is trying to sell.I'm sure all those Copperstone assignments are your typical assignments and are the tip of the iceberg. If you follow through the realtor links on the assignment site, you'll find even more Copperstone listings (one agent has another site devoted to Copperstone). Then there are few that get repeatedly listed on Craigslist.After allowing for some crossover caused by people listing in more than one place, I think its fair to say that there are several dozen flippers in trouble over this one project.The mind boggles at how many speculators have infested other New West projects like The Grove-Victoria Hill-Glenbrook. That is absolutely huge. I just drove through it today.And than there's the Queensboro mess.New West taxpayers will take it on the chin for these… Read more »
Never once did I encounter someone so desperate to get out of a propertyIn other words, the people he talked to pre-2000 were not very distressed. No surprises there, given a booming stock market. The only way to see prices depressed so steep is to see something along the line of the 80's crash and hardship. Ahhh, let me rephrase. Much more severity of economic hardship and pain than the 80's crashThe 80's crash was clearly sufficient, so nothing more severe is required. However, achieving an 80's-like crash (or worse) shouldn't be a problem, given increased indebtedness, negative savings rate, and the increased macroeconomic reliance on RE for GDP and job growth. But by then folks, your jobs would also be in question. At that time, you won't be thinking of buying a home. You probably be thinking of trying… Read more »
freako: The Vegas article is great, especially:"There’s going to be a lot of depression, a lot of anger. A lot drinking, gambling, and desperate stuff going on."Isn't that what Vegas sees every weekend?
patiently:Thanks for the Copperstone post: Yikes!I'd imagine there's a flipper or two having a sleepless night or two.Also: could these 'assignments' possibly represent developer product initially held back?
"At that time, you won't be thinking of buying a home. You probably be thinking of trying to survive day to day."The old "we are all in the same boat" argument. Prices are set at the margins. Even if unemployment is at 10%, it means I have a 90% chance (likely more in non-construction and non-forestry industries) of keeping my job. I'll take those odds any day.Your comments about buying bank foreclosures are fair. There could be screaming deals out there but most I have seen are whittled back to near market prices. In a falling market nobody will really know what "market price" is so you might get a good deal if your timing is right. The more lowballs you throw, the better the chances of one sticking.
"Vegas flipping craze ends badly"http://tinyurl.com/2xlko9Many more stories like it to come. Anybody watched those flipper TV shows lately. Must be tough to make new shows now.
A letter to John T. Reed from David Folster about Tom Vu which was sent around the year 2000 is very interesting reading. For once, this is from a guy who originates from British Columbia, Canada and who had attended the phony Tom Vu seminar a decade ago and wanted to duplicate his system. What he found were the realities of the BC real estate market. Consider this, he tried investing before this current boom ever happened and here's what he found.. This applies to our province, so take note!He said…1. Even with distressed properties, offering to buy a property that far below market value was a joke (I was trying 80%). I was laughed out of most negotiations. Never once did I encounter someone so desperate to get out of a property that they would bend over to accept… Read more »
<a href="http://www.assignmentscanada.ca/wdirc22774623http://www.assignmentscanada.ca/wdirc22774623<br />I'm putting the Copperstone, in New West Sapperton, on official Flipper Bloodbath Watch. Way too many assignments not getting sold.
patriotz – I read Campbell for some interesting comments here and there, but totally keep myself aware of his huge bias. He is there to speak for the landlords, developers, bankers, employers etc.That comment shows his bias. He must be aware of how the inventory growth in condo units will effect rents, and what will happen when the boom inevitably goes bust. Lots of tenants will leave Vancouver once construction jobs disappear. I understand that even the Olympics can't keep many of these workers employed.rentah – I noticed the date after I posted it when went back to read it thoroughly, and was wondering if anyone else would discover it.I don't know how I would have reacted to those arguments in Summer 2005. I wasn't quite there yet, but had a vague notion that something was wrong. The prices and… Read more »
As far as the talking point that texas is notfeeling any preasure I just saw this onBen Jones blog.http://tinyurl.com/262w2xSounds like things are "going soft" in someareas of Texas as well.
Patiently waiting: thanks for the Burnaby article, but did you spot this at the bottom of the piece?:"published on 08/10/2005"So this McCarthy fellow, a property manager, has been bearish since 2005.He was right then, as he is now (even moreso).And he's in good company.
Campbell doesn't seem to understand that landlords' costs only get passed on to tenants in the long run. Otherwise all rentals would be cash flow positive, wouldn't they?Or maybe he does. Decide for yourself which option is most likely.An increase in property taxes is not going to change the market rent in the short run. Landlords are already charging whatever the market will bear, if not rent controlled. And new entrants to the landlord business are (obviously) not motivated by cashflow considerations.Taxes will be reflected in market rents when (and only when) other fundamentals (you know what) are.
Another quote from the same Campbell column:"Many renters don't seem to understand that the rise in landlord's property taxes gets passed on in the form of higher rents."
In other words, you can be in the top 10 per cent of income earners in the country and still not qualify for a mortgage to buy an average detached home in Vancouver or Victoria.So has our guru Michael made the logical leap to conclude that therefore prices must come down?Or is he just advocating demand-side subsidies (including tax cuts) to improve "affordability"?
Gutsy of the Burnaby News to print such an article…Just to add to the news pile c/o CKNW…I can't wait for Bob Rennie to come out with a nice glossy ad showing these neighbors…http://tinyurl.com/ytddmuMassive weapons cache found in downtown condoApr, 28 2007 – 3:30 PMVANCOUVER – Forty residents of a downtown high-rise condo have been evacuated while police clear an alarming number of guns and explosives ingredients from a suite.Police first came to the suite on the twenty-first floor of a building in the Citygate complex on Thursday after a dropped 911 call.Police say the man who answered the door was behaving suspiciously, and they found guns on a desk.It was the tip of the iceberg – since then, police have found more guns, including machine guns and ingredients for explosives.Inspector Bob Chapman says he doesn't think it's a foiled… Read more »
Anyone else think it's interesting that Concord Pacific is putting all their inventory on the market? TV Towers, Max, Coopers Point – All previously sold out?
Burnaby bubble article:http://tinyurl.com/3aaoch
High taxes impact paycheques in many waysMichael Campbell, Vancouver SunPublished: Saturday, April 28, 2007Just as amazing is the fact that to qualify to be in the top 10 per cent of earners, all you have to make is a meagre $64,500. In other words, you can be in the top 10 per cent of income earners in the country and still not qualify for a mortgage to buy an average detached home in Vancouver or Victoria.
I have to back the comments about rentals. Its getting ugly. My wife and I are looking for a nice large rental in the New West area and are shocked at the asking prices. They are sometimes negotiable but only to a small degree. Sometimes when it says 1br and seems like a deal, its actually just a bedroom and you share the rest of the house or condo with the owner or other tenant(s).Most units we've looked at in our "price range" have been depressingly bad for one reason or another. Sigh…we are going to have to adjust upwards. It looks like $1000-$1250 for a 2br or nice large 1br in freakin NEW WEST.No wonder we have a labour shortage in this city.
Patriotz:What you said.I must be simple, cause I never understood 'cash-flow negative' investing. Sounds like risky speculation to me.
A paper prepared for the Greater Vancouver Regional District last year illustrated why more rental units are not being built.Well of course lots of rental units are being built. It just a different business model than before, where a developer would build a complex and then rent out the units.Now the developer builds condos, sell them to suckers, er, "investors", pockets the money and lets them bleed cash renting them out.
Price per square foot is a very good argument. Prices in Vancouver should probably average $350 per square foot after the market corrects. Most major centres in Canada and the US can sustain about $350 per square foot. Vancouver is about 2 years away from returning to this level. Rents will probably rise in the short term but will also return to more normal levels within a year or two.