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Real estate obsession

There’s interesting commentary in the Globe and Mail about Vancouver’s obsession with real estate. The author Timothy Taylor proposes new benchmarks for tracking the market:

The last, and arguably most important, statistic we should have is what I like to think of as the personal humiliation sustainability index. This number would be derived by dividing the value of the house itself by the tax assessed value of the house and property. The crazier the market, the tinier this number becomes, as the structure itself, the thing you were planning to live in, disappears into financial irrelevance.

To illustrate, I went to see a place recently and the agent proudly showed me the tax assessment proving the value of the land. Looking over his shoulder, however, that allowed me to value the actual physical structure at about 9 per cent of the asking price. He was selling dirt, folks. A few metres of turf and a rhododendron. And he was smiling.

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6 Responses to “Real estate obsession”

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    1. 1 X aetakeo Says:
      July 19th, 2007 at 12:17 am

      Tim Taylor like “Stanley Park” Tim Taylor? Awesome book.

      Current score: 0

    2. 2 X the pope Says:
      July 19th, 2007 at 7:06 am

      I didn’t make the connection aetakeo, but I think you’re right- that would be the same guy and ‘Stanley Park’ is a great book.

      Current score: 0

    3. 3 X Akhen Says:
      July 19th, 2007 at 8:31 am

      Bottom line is that greed has turned this into a game of financial cat and mouse … the loser of it will be those families that need a home.

      But … who cares! Jack it up, give me another 100 grand.

      Current score: 0

    4. 4 X tulip-Mania2 Says:
      July 19th, 2007 at 2:47 pm

      And the flames of Vancouver’s obsession were stoked by interest rates lower than inflation.
      just as the hot US markets

      “Rather than act as a moderating force, the Federal Reserve played an
      important role in further inflating the housing bubble that’s at the
      root of the current crisis.”

      Current score: 0

    5. 5 X dosh Says:
      July 19th, 2007 at 4:27 pm

      It sounds like the author is frustrated because he’s not the only one who knows that now is the right time to buy before interest rates go up higher.

      Current score: 0

    6. 6 X ReductiMat Says:
      July 19th, 2007 at 7:12 pm

      Dosh, you couldn’t be more right! Have you thought of publishing a newsletter for investors?

      Current score: 0