friday free for all!
Here’s your open topic for Friday September 28th.
-The Canadian credit crisis
-$26 Million up in flames in New West
-US new home sales hit 7 year low
-Fewer flock to Alberta
-’Unwavering Demand‘ supports rising prices
What are you seeing out there this week? Post your news, links and anecdotes here!
(No Ratings Yet)
Loading ...
September 27th, 2007 at 10:50 am
September 27th, 2007 at 10:59 am
canadas credit crunch could be much worse then down south
tinyurl.com/2p686z
September 27th, 2007 at 11:09 am
September 27th, 2007 at 12:49 pm
Of course Royal Lepage would say that wouldn’t they.
September 27th, 2007 at 1:35 pm
September 27th, 2007 at 1:52 pm
So how is it that Calgary is dropping first, with lower prices, higher incomes, and a better economy? I don’t get it.
Also Edmonton, anyone know? The fact that Vancouver appears to stay together when fundamentals are worse has me doubting the severity of the correction here. Technially in Edmonton its pretty bad, but is this “it”.? Here are some reasons why Edmonton may be correcting first:
1. Supply ramped up very quickly with lots of builable land.
2. Prices used to be very low and there was a lot of construction during 2002-2005. A lot of young people (mid 20s) in Alberta already own homes and may already bought at low prices. And i don’t mean started condos i mean new two story homes with double garage. In Vancouver there may be more pent-up demand with higher income people in there 30s.
3. The run-up in Alberta was faster and more violent. (50% YOY for average price, Edmonton had benchmark condos increase over 70% in one year).
4. Its Edmonton.
September 27th, 2007 at 1:54 pm
“Nationally, investment purchases accounted for 28 percent of sales in 2005, the peak of the housing boom, according to the National Association of Realtors.â€
What is this statistic in Vancouver? Edmonton? Calgary? I’d love to get my hands on it.
September 27th, 2007 at 2:38 pm
if they are vacant..they must be speculated homes
this figure has been played down as this is a realtors site
tinyurl.com/254ptd
exactly the same
September 27th, 2007 at 4:23 pm
Satv Please share with your fellow realtors on the other blog
September 27th, 2007 at 4:24 pm
“must sell” =60
motivated =110!
September 27th, 2007 at 7:50 pm
http://www.youtube.com/watch?v=tkuW8bCjC6c
Found it at Langley Financial Planners Blog
September 27th, 2007 at 11:41 pm
Vancouver may be overrated but it does have its attractions, it certainly has a lot less available land than Edmonton, and the 2010 Olympics are indeed coming for those who get an ego boost out of such things. The “it’s different here” attitude is in a league of its own and will be much harder to break. But if we get a US recession all the attitude in the world won’t help.
September 28th, 2007 at 8:00 am
Pure speculation: someone saw the writing on the wall. If it was a buyer, they tried to get out of a deal by torching the unit they were supposed to buy. If it was a developer, they realized there was no way they’d ever recoup their costs through sales, so torched it for the insurance money.
These two possibilities immediately cropped up as most likely in my cynical mind. Maybe that means I need another coffee.
September 28th, 2007 at 8:12 am
Apparently condo developers in Miami are now suing people who walk away from their deposits.
Link
September 28th, 2007 at 8:27 am
September 28th, 2007 at 8:57 am
“His Realty Check column takes a hard look at real estate in Vancouver, with an emphasis on journalism rather than boosterism.”
you’d really expect a lot more from this guy. He quotes the usual suspects then puts out the usual suspects rationale for “fundamentals” in the market. While he mentions the role psychology plays he doesn’t connect the dots (CMHC/ BCREA have a vested interest in keeping the RE psychology here ridiculous, hence their spewings about rich foreigners, people making more money, scarcity of land). We know when you start to look at the data to support these “fundamentals” you find it is very suspect, if it exists at all…
This market is all about the hype, the psychology, it has no connection to fundamentals which is why its demise is a sure-thing. The big question is how long will people keeping swallowing the pap?
I think the RE madness of the past 6 years has been a set-up. Push up prices, create a frenzy, use pre-sale cash to build like mad pre-Olympics, market crashes (2008/2009), developers & RE agents buy back a bunch of condo’s they sold for half the price, rent them out for Olympics & then sell in the depressed market.
That’s my prediction… for what its worth.
September 28th, 2007 at 9:56 am
Actually, i found it interesting to hear the developer say “we will honor our contracts” on tv. the newscaster kind of implied the buyers have nothing to worry about.
what i find interesting about it is that on an earlier newscast, one buyer is quoted as having a “drop dead” date of march, by which time the developer can resell the unit. So if the developer says “we will honor the contract” but the contract also says they can walk away from it in march… all i can say is, good luck to the buyers
September 28th, 2007 at 10:40 am
http://tinyurl.com/2gv8qe
How the twenty-somethings are affording condos (and investing in another condo in one case).
Ends with this Rennie gem:
“Mr. Rennie, meanwhile, believes that Vancouver will become one of the most expensive cities on the planet, a fact that will protect any investor.”
Long time reader, first time poster.
September 28th, 2007 at 10:44 am
First of all the dude has money tied up in Real Estate. Second, Vancouver a Resort town? I really don’t understand that one. I am from back East living in Victoria and I am watching the moss grow on my deck - and it rains less than Vancouver I am told and this place is wet and cold.
Resort town hmmmm (Palm Springs, Fort Lauderdale, places in South of France ie. St. Tropez is making a comeback. The Hamptons. Deauville. Seville is not even considered a resort town.
Could someone clue me in on why Vancouver is considered a resort town?
September 28th, 2007 at 11:23 am
’cause the RE shills say it’s so
now they may have an agenda, but that is what you should believe…
just like a religion…don’t ask hard questions… just believe and keep on buying… it’s all good
September 28th, 2007 at 11:35 am
Whistler is a resort.
September 28th, 2007 at 11:44 am
Having lived in a resort town, I would say the fact that the majority of jobs are underpaid and housing is barely affordable to residents unless it’s subsidized by employers would do it.
September 28th, 2007 at 1:23 pm
Reminds me of a show on HGTV “Buying Property Abroad” about British expats try to sell their resort properties. The advice the show always gives them: the only people who will buy from you are other British expats.
This week has been great for housing-related articles. Here is another one from the Sun.
I love this quote from Cam Muir in the article:
“When we look at where a lot of the demand is coming from, it’s homebuyers that are second- or third-time buyers,” Muir said.
“They have amassed a great deal of equity in their homes,” he added, and are using it to buy investment real estate or recreational properties, which for many will become retirement homes.
MEW at its finest.
September 28th, 2007 at 2:01 pm
Does Vancouver have a huge banking sector. Are head offices located there? I met a guy from Vancouver who said he thought Vancouver property was undervalued as London and New York were so expensive. My husband and myself having lived in London, New York and Paris just stared at him.
When people start talking like this you know that it is the beginning of the end. My husband was on Bay Street during the Tech Stock fiasco and he said people were coming out with such BS it was not funny.
September 28th, 2007 at 6:09 pm
Give me a break. Buy and sell a property just so you can rent it out for two fricken weeks? The numbers don’t work even if you rent it out for two years.
Sure didn’t happen for Expo and that lasted for six months.
What’s going to happen is that people with desirable, furnished apartments are going to go live with friends or family for two weeks and rent out their places. That’s what happens everywhere else. Plus the usual short-term furnished rentals will be in the money.
But I think a lot of people are going to be disappointed. There’s a LOT of potential supply out there.
September 28th, 2007 at 7:16 pm
I met a lady who lives in Summerland and she said the Olympics will put Summerland on the map and her condo in Summerland will double.
Are Canadians really stupid?
September 28th, 2007 at 8:18 pm
Replace “Canadians” with “people in general”, and I would say - “obviously”…
September 28th, 2007 at 8:29 pm
“RE agents buy back a bunch of condo’s they sold for half the price, rent them out for Olympics & then sell in the depressed market.
The point I’m making is that the market is a set-up. Politicians, developers, VANOC, REBGV are all in. Create a market, the ignorant masses looking for a quick buck finance a load of Olympic housing projects & the regentrification of the city then lose their shirts shortly before the actual event because there are no fundamentals to the market. Blame it on the US subprime, whatever…. Same politicians, developers, Re agents, etc… are poised to move in & buy when the crash occurs, places available to rent to meet demand during Olympics but the real money is made afterward; re-selling the same places sold a few years previous for half the price.
People will come for the Olympica, wealthy people who we must make property available for. They won’t necessarily buy, that isn’t the incentive, the incentive is to look after them, make sure they have a good time while they’re here, have nice accomodation, a nice time. The taxpayers can shoulder the burden for years to come, who cares. Plus, you make money on the downside. Boom & bust cycles are great for re developers & re agents, provided you’re in the know so your timing is right.
September 28th, 2007 at 8:42 pm
Somewhat of a bizarre strategy. These fools are accumulating debt later in life, and the commonsense approach to proper investment is to average cost down not cost average up.
I can just see the headlines:
“Aging, greedy imbecile baby boomers in over their heads in debt as the real estate crash makes its way around the globe no more labour shortages, as most need to work into their 80’s.
Tick Tock,Tick Tock,
September 28th, 2007 at 8:53 pm
September 28th, 2007 at 9:29 pm
owg.
Step away from the Kool-Aid.
It is not good.
September 28th, 2007 at 11:17 pm
MUNICH AND MADRID REPLACE VANCOUVER AS MOST LIVABLE CITY
September 28th, 2007 at 11:20 pm
“VIVA MADRID!!!!!!! I¨ve been in many cities in Europe and I must say that Madrid is the best city in Europe to live, especially in summer. You can easily find good food, good parties, good people and nicely places to go. And something very important: it is a safe city. It has a great culture, streets are clean, public transport is the best I´ve ever seen. You can go out at night all days during the week and you can know friendly and funny people wherever you go. The citizens are tolerant, the university is the best of Spain and one of the best in Europe, is the most international university in Europe, everyone who wants to study abroad choose Madrid!! The visitors have many good culture options Many times the forget that Madrid is not only a city to go out, drink and dance!!! It is more than that, It is a city where you must be more than a week to know it well and to understand why madrileños love their city. Madrid is a city with life, there are people 24 hours in all the streets, in the bars, terraces, parks…. COME TO MADRID!!!!!!!! “
Vancouver SUCKS!
September 28th, 2007 at 11:24 pm
“Well, being a Munich expatriat living in Vancouver I do understand why Munich is rated no. 1. Sorry Vancouverites, but your city is not by far as “gemütlichâ€, safe, clean and yet culturally interesting and entertaining. Having some mountains, around and the (dull and surfless) sea is not quite enough to make a city no. 1. It takes some human interaction, depth, culture and initiative as well.”
unquote
http://www.iht.com/articles/20.....ch.php?d=1
September 29th, 2007 at 12:04 am
“Look for housing prices to ignore the USFed and continue downward. My expectation is that the USFed and USGovt will embark on broad, deep, and significant rescue package measures, each to be futile for as much as another year. The main driving forces will be the continued relentless bear market in housing from a worsening inventory problem, and the downward momentum in the USEconomy. The existing home inventory rose to a mindboggling 10.0 months of supply in August. Foreclosures are threatening to rise year over year by 100%. No evidence of a bottom or of stability is remotely evident.”
September 29th, 2007 at 1:33 am
This is a town that overwhelmingly votes for an MP who believes that “The Flintstones” is a documentary, so I don’t find this terribly surprising.
BTW, just how does this lady think this supposed windfall will get her ahead? Is she planning to retire to Trail or something?
Re agents, etc… are poised to move in & buy when the crash occurs, … but the real money is made afterward; re-selling the same places sold a few years previous for half the price.
Yes, churn is what the RE industry is about. “It’s a great time to buy or sell” as the NAR puts it. However getting involved on the investment side is another thing, and I don’t expect many RE agents, many of whom are chugging the Kool-Aid big time right now, are going to have the means or desire to buy into a crash.
Once the crash comes to Vancouver, people are going to wake up and see that RE is in the pits all over the world, and it’s going to take a long time to get the buying psychology going again.
September 29th, 2007 at 4:34 am
September 29th, 2007 at 5:12 am
Problem is most people can’t work into their 80s. Boomers seem to think they are the exception to every rule. Sometimes they are, as they have been an unique generation.
Certain realities can’t be avoided. People in their 60s and 70s are hit by all kinds of health problems that, of course, are rarely anticipated. By their 80s, half the remaining population is close to death. DEATH. We are are lucky to live more than 80 years. Sorry, maybe not lucky. My wife works in an old age home and she says “shoot me before I get like that” after telling me about her day. And it costs $3000/month to stay at that home. The end of life ain’t cheap either.
September 29th, 2007 at 7:41 am
The tech bubble meltdown was not that long ago, and a lot of the rhetoric surrounding that eerily parallels what is said about RE now.
I guess “most livable” does not take into account the cost of living.
September 29th, 2007 at 8:55 am
You got that straight. Our banker in TO told my husband that she was amazed at the huge mortgages the baby boomers have taken out as they are close to retirement and it is a time they should be downsizing instead of upgrading. The problem being that they will all be selling their trophy houses and condos at one time.
Madrid and Munich -
Lived in Paris for 15 years. Madrid and Munich are just wonderful cities. I find them both much more interesting and exciting and beautiful than Vancouver.
September 29th, 2007 at 9:08 am
http://vannumbers.wordpress.com/
September 29th, 2007 at 9:44 am
http://www.reportonbusiness.co.....bNews/home
September 29th, 2007 at 9:45 am
September 29th, 2007 at 10:00 am
Well said. People often think they’ll do all kinds of things in retirement — travel, hobbies, part-time work, etc — only to find they’re medically unable.
My wife works in an old age home and she says “shoot me before I get like that”
Agreed.
September 29th, 2007 at 10:06 am
http://tinyurl.com/39g87m
Good article; they attribute most of the Canada-wide drop to Ontario & Quebec, which makes sense as manufacturing there has tanked.
September 29th, 2007 at 10:43 am
That said, inventory is on a run again so we will see if the trend continues.
September 29th, 2007 at 11:20 am
Yes it does Paul.
(Examine the composition of the pool of buyers)
It will take a little longer, but it will be intense, and will it last a while longer.
It will be orgasmic.
September 29th, 2007 at 1:01 pm
A few years ago I got a realtor flyer in the mail. I didn’t keep it (should have), so here is a very crude paraphrase:
Buyers: Buy now before rates go up
Sellers: Sell now before rates go up
It is quite difficult to appeal to diametric opposites in the same document, so I give him credit for trying.
September 29th, 2007 at 10:28 pm
Anyhow, what is really sad is hearing all these people who so desperately wanted one of those overpriced (even at 2005 prices) matchstick condos. Not the speculators (they can go rot), but the young families looking for a little place to call their own. Paying that much money for a small, poorly-built condo in a project squeezed between a hospital and a skytrain station on the edge of an industrial area in New Westminster. They were excited about it. This is what we’ve come to in Vancouver. It makes me sick.
September 30th, 2007 at 5:19 am
What’s more worrying to me is that the MBS financing ’strategy’ (IMHO the banking equivalent of a pyramid scheme) has grown in the last year by 25% !
Anyone not clued in yet to this MBS-financial-disaster-in-the-making should check out this excellent primer on the topic: The Credit Crisis is Just Beginning (http://www.thestreet.com/_email/newsanalysis/investing/10380613.html)
September 30th, 2007 at 5:21 am
The Credit Crisis Could Be Just Beginning
September 30th, 2007 at 5:22 am
September 30th, 2007 at 7:59 am
Good article. I particularly like the part…
“Like an ex-mobster turning state’s witness, Das has turned his back on his old pals in the derivatives biz to warn anyone who will listen — mostly banks and hedge funds that pay him consulting fees — that the jig is up.”
Nice of him to come clean after flogging these ‘products’ for a few decades:(
This bankers’ pyramid scheme is breath-taking in its stunning heights of depravity.
September 30th, 2007 at 11:12 am
http://tinyurl.com/yt9kjj
September 30th, 2007 at 12:31 pm
.” One reason for Dodge’s concern is that home-price inflation is high even if you ignore the booming resource provinces of British Columbia, Alberta and Saskatchewan. There, soaring incomes can support big price gains.
Soaring incomes can support big price gains?
Aside from Gov workers, and RE related industries, I don’t see “soaring” incomes.
I think the last stats I saw was that the average mortgage ate up 70% of household income.
September 30th, 2007 at 4:48 pm
September 30th, 2007 at 6:07 pm
Ahh yes.. people are so much smarter today than those ignorant cave-people of the 1980s.
September 30th, 2007 at 6:31 pm
I sent a e-mail to the guy who wrote the article about the “soaring” salaries. Lets see if he replies.
September 30th, 2007 at 7:07 pm
Keep us posted! thanks
October 1st, 2007 at 6:43 am
soaring salaries… check
grow ops/meth labs …check
recalcitrant realtors hiding real numbers… check
overextended buyers and wanna-be RE moguls… check
it’s all good
would you like an enema with that buzzcut?