Real estate games in the Globe and Mail

Digi pointed out this commentary on risks in the Vancouver ‘real’ estate market from this weekends Globe and Mail. Its an entertaining read as well as some food for thought:

Nature is logical, but people are not. They seem to think that the laws of physics won’t apply if they spend enough money. Sometimes this works for a while, but you can hold back the tide or suspend the forces of gravity for only so long, before they boomerang and thwack you in the puss.

When imaginary value meets real water and real mud, all that pretend money washes away. You can build on the supposition that nothing bad will happen, even put your house on a sandbar in the middle of a river, thinking the river won’t ever rise, but that’s what rivers do, always have done. Why should they spare you and your big-screen TV?

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rentah
rentah
13 years ago

OT:Found this post while searching a '2010 Olympics' link (Jack Kee's blog):Comment by JackYing2007-03-29 10:46:50excerpt:"I currently have 6 assignments in the 2 Woodward’s buildings. The prices range from almost $700/sqft with a 10 year leased parking to over $1000/sqft. Developers see this kind of money in an area where they can buy properties to develop at a lower cost and they cannot resist."———-So there definitely are specuvestors out there.Interesting that the poster doesn't see that he is heavily taking up the other side of trades that developers 'cannot resist'.Hmm. Smart money, dumb money?

Freako
Freako
13 years ago

OT Phoenix just crossed 12 months of inventory – in the early selling season to boot.How long until prices start to seriously cave in?

blueskies
blueskies
13 years ago

i found it to be well written and funnier than sh*t!if all articles were like this perusing MSM would be a pleasure. at the moment there are few jewels amongst all the dross.

digi
digi
13 years ago

Yes, its a cranky column but I enjoyed the emotional rantyness of it. I've heard complaints about the 'bearish' argument being made on emotion lately, but It seems to me that the 'bull' side is even more predominately based on emotional arguments: greatest place on earth, everyone wants to live here, etc etc. – immigration stats just don't back that up.

Jesse
Jesse
13 years ago

MetaphorSounds like somebody's priced out… 😉

the pope
the pope
13 years ago

Bernward & Will: Fair enough. I'll agree with you that its cranky and melodramatic, but I thought that was part of its charm.Floods and mudslides wont cause a correction, but the point is that simply ignoring a risk doesn't make it go away.If you price in lots of upside and don't consider the downside you might as well just go to the track with your paycheck.

Will
Will
13 years ago

I agree with bernward… this letter to the editor was far too melodramatic and extremely short on substance.

bernward
bernward
13 years ago

That was the silliest real estate column I've ever read. There is a price correction coming, but this year's weather has nothing to do with it.