Free-for-all Black Friday!
Unless you’re too busy waiting in line at the border to get some great deals on cheap plastic things in the USA, you may want to take part in our usual open topic Friday discussion here on VancouverCondo.info – Here are a few stories to kick off the discussion:
-Bleak friday for Canadian retailers
-Vancouver feels the effect of the writers strike
-BC Auditor general to review island land deal
-There are still slum-lords
-Abbotsford grow-ops sold
-Canadian banks face grilling on subprime charges
-US foreclosures bring crime wave
-Black friday halo dims on bleak 2008 outlook
So what are you seeing out there this week? Post your news, links and anecdotes here!
November 26th, 2007 at 7:55 am
F & M, risk is a red herring with apples to apples since you could buy a basket of dividend paying stocks, whose dividends are very solid and should over the long haul grow faster than rents and and would pay enough to rent out a place today. On the other hand, yes, tax is an issue that still requires accounting.
November 25th, 2007 at 10:12 pm
drachen4% return is risk free. 8% isn'tthe equity in your home is not risk free. the roof over your head is (if it's clear title)apples to apples.i wouldn't compare opportunity cost of a clear title home to an 8% return on mutual funds, especially if i were giving advice to a friend. and we haven't even factored in taxes on that 8% return.my only point was that re-diculous tried to compare equity to opportunity cost without providing an alternative (comparible) bed to sleep in.
November 25th, 2007 at 8:30 pm
Speaking of US link, here is one very close to home.Seattle townhouse prices were down from the prior year in six of the first 10 months of 2007, with October's median townhouse price of $358,594 down 13.6 percent from October 2006,"What we are seeing is these huge price reductions, where a guy's asking $600,000 one week, then $550,000 the next week and $500,000 the week after that," said Ryan Thompson, an agent with John L. Scott Real Estate.
November 25th, 2007 at 7:17 pm
EU industrial orders fell 1.6pc in September. Spanish, French, South Italian, and Irish house prices are already all falling.from above articleBTW GOLD IS THE ONLY ANSWER
November 25th, 2007 at 7:09 pm
He will have allies soon enough, once the housing bubbles collapse in Spain and across the Med….
November 25th, 2007 at 7:05 pm
I don't think you can find a modest 3 bedroom in a modest neighbourhood around Vancouver for under $725k.Crappy neighbourhood or crappy condition but not modest. When Vancouver prices absolutely blow away SF BUBBLE prices it's time to sell (as if there's anyone here with any sense who hasn't sold already)
November 25th, 2007 at 5:00 pm
• News FlashNovember 25, 2007 at 2:23 pm As inventory drops…here come the US links.There you go:November 24, 2007Today's Housing Bubble Post – Marked Down From $725K To $495K, Still Not SellingA for-sale house around the corner from us (SF Bay peninsula) has gone through all the stages, and now even the "price reduced" sign is gone. The house is empty. The flyers are still there, however. Walking the dog the other day I picked one up to see what they're offering. The house, a modest three-bedroom in a modest neighborhood, was originally listed at $725,000. Now that is crossed off by hand on every flyer and $495,000 is written in.So, marked down from $725,000 to $495,000 it still isn't selling. No one is looking at it. It is still priced higher than the average person can or will pay for a house like this to live in this neighborhood. House prices around here still have a long way to fall, but you can't expect other houses around here to sell for a lot more than $495,000 now – not with that one sitting there. But most of them are still priced in the $600-700,000 range.That leaves a long way left to fallhttp://www.seeingtheforest.com/archives/2007/11/todays_housing_137.htm
November 25th, 2007 at 4:52 pm
Anecdotally, in Florida some houses are being sold for half the pricethey were during the peak of the housing bubble two years ago. For banks and mortgagelenders, that’s scary stuff that is sending shock waves throughout the financial system. Yetstock markets have yet to clue in… it’s surreal.
November 25th, 2007 at 2:13 pm
Unless today's open house has an unsecured wireless connection, we can expect a slowdown in the number of posts from the Re pumpers, on this blog and Chipman's.
November 25th, 2007 at 1:01 pm
Fun and Mental:Yeah but 4% is a shockingly low rate of return for any proper investment, 8% is pretty realistic to expect. If it's 80,000 per year you're squandering $50,000 per year in your example. That's a LOT and there is no way that home appreciation can match it. This is part of the reason why the market can't just stall and return to normal appreciation levels. Anyone with a lick of sense knows that they're better off investing the money in a good mutual fund rather than letting it stagnate in a house that's bound to depreciate.
November 25th, 2007 at 11:09 am
fun and mental,No,you did not miss anything and top of that on given appreciation that house will cost 2 million in 13 year.That's mean after 13 year when you will look back you will smile that you were paying nothing and making every thing.Pavel bure sold his unit for 3m he should have keept cow,dogs,and cats in his unit to make 18m in 3 year.Solipsist,taste the yogourt ho oh ho.taste the yogourt oho ho ho.taste they yogourt yeah eh hey.taste the yogourtthums up taste the yogourt.and after that put your empty cup here
November 25th, 2007 at 9:58 am
re-diculousi'm not following your opportunity cost argument.using your numbers, your friend with a clear title million dollar home is squandering approx 40k/yr in opportunity cost while he 'consumes' his housing.the problem with your example is that it over exaggerates the cost as you haven't given him alternative housing. clearly you must live somewhere.renting a family home on the westside will easily set you back at least 2500/month.so in your first example the opportunity cost is $800/month that can easily be argued away as a premium for home ownership.every person will have a different 'premium' placed on ownership.i know personally mine would be quite high as i have a family to house, incl a dog, making the task of renting very difficult.am i missing something?
November 25th, 2007 at 9:05 am
Craig:Ok, whatever. It's not terribly relevant to a RE conversation how much they seized.However I think you're mistaken about the proceeds of crime driving the market here. Organized crime LAUNDERS their money. That means that even though the money comes from illegal sources it is put through a legit business so that at the end of the day the money is still recorded as a part of the economy as a whole, it's not like there's billions of dollars floating around the market that is unknown to statscan.
November 25th, 2007 at 8:47 am
Geez, DrachenIf you're going to accuse people of not reading the story correctly you should try and read it yourself. Here's what it said:"The act came into force in May 2006. Since then, some $2 million in assets have been seized including houses, cars and boats, with the funds used to compensate victims AND IN CRIME FIGHTING."So it's not as you claim that the amount is defined as what can be handed back to victims. The assets not handed back are plowed into police budgets. And that grand total is $2 million since May 2006.And let me just repeat what I said earlier about the RCMP division responsible for money laundering, counterfeiting, fraud etc, because it's just too amazing to say once. With a staff of some 75 people and annual budget of $8 million a year they have managed to jail only 17 criminals in the last 5 years.Anyway you slice it there is a mammoth pool of wealth generated by organized crime in this city, and it's effect on property prices has to be significant. How significant? We'll probably ever know because there are so few data points and because the police clearly are in no position to provide that data.
November 24th, 2007 at 6:59 pm
Thanks scoop for the globe article.I can't believe that they didn't go for the asbestos insulated home. People really need to get rid of this sense of entitlement.
November 24th, 2007 at 4:09 pm
How to buy a house in Vancouver.Ugh.
November 24th, 2007 at 3:53 pm
Shiller calls for major structural changes in tomorrow's NY Times.
November 24th, 2007 at 3:03 pm
oops I forgot……Tick Tock, Tick Tock,
November 24th, 2007 at 3:02 pm
Lazy posts, but if you realtors with open houses want something to read there you go:The next shoe to drop in the mortgage and credit crunch saga will be commercial real estate," Mr. Roubini ominously predicted last week in his popular blog. "The bubble in commercial real estate construction, like the bubble in residential construction will soon turn into a painful bust.""Early reassurances from the likes of U.S. Federal Reserve Board chief Ben Bernanke and countless Wall Street luminaries have proven pretty unreliable So maybe it's time to pay attention to some of the darker voices out there" And they there is this nice story:Any economist worth their salt could see the wreck coming, and boy it was a doozy. The insurance carrier for this contrived carnage was, who else, America's Middle Class.Alan "Cash" Greenspan and "Bronco Ben" Bernanke predicted a soft landing for housing. They also assured us that the housing sector was not large enough to bring down the economy. So much for requiring our FED Chief to have a handle on economics 101. But, the massive housing failure wasn't their fault, the banks "done it,"
November 24th, 2007 at 1:08 pm
"the police took two mil since May 2006."That's not what it said at all."$2 million in assets have been seized including houses, cars and boats, with the funds used to compensate victims and in crime fighting."I highly doubt that ALL of the assets they've seized have been turned over to victims. In many cases how would the police identify a 'victim', are they just going to turn the money over to drug addicts? You appear to be reading something into the article other than what it literally says. I think the reporter worded it badly, I am not 100% certain of what he means either but since it can be taken both ways I am inclined to give the benefit of the doubt until proven otherwise.
November 24th, 2007 at 11:44 am
Drachen, you're joking right? How many seized grow op homes add up to $2 million? Four maybe. Of all the cash, cars and properties managed by organized crime, the police took two mil since May 2006.Seventeen people jailed by the RCMP for commercial crimes in five years.This stuff is jawdropping.
November 24th, 2007 at 11:27 am
Apologies in advance if this is obvious… Let me recount a recent exchange I had with a friend of mine regarding my favorite topic: "Opportunity Cost". This friend owns a $1million+ home on the west side. The conversation went like this: "Let's assume that your home is paid off, then you're opportunity cost of living there (current value = $1million) is at minimum $3,300/month (i.e. 4%). And If you're a reasonable investor able to achieve (modest) 7-8% returns, it's over $6,000/month – or – $72,000/year!I was shocked that my friend – an intelligent guy – had not even considered this – in fact when we got together the following week, he declared that this conversation had "haunted" him. The reason I tell this story is that I think my firend is not alone – i.e. current Vancouver owner's have been solely focussed on their growing capital gain and neglected the concept of opportunity cost – easy to do I suppose. As the price increases subside, as they must. and we reach peak – even if prices only move sideways thereafter, Opportunity Cost, I believe, will become the "800 pound elephant overhanging this market"
November 24th, 2007 at 10:29 am
It appears that Greenspan has plenty of reasons for why the housing bubbles worldwide ever started and are now bursting."In essence, he wants us to believe that housing skyrocketed 10-plus years after the fall of the Soviet Union in some sort of delayed reaction, and that it was just by coincidence that this happened after the Fed slashed rates to 1%. Clearly, Greenspan is attempting to absolve himself of his role in the housing bubble."But all that aside,and regardless what caused this world wide housing bubble; we must remember that Vancouver's prices are supported by fundamentals.
November 24th, 2007 at 9:29 am
Craig:You have to realize that assets seized and given to the victims cannot include drugs or ANY asset that the police cannot prove came from ill gotten gains. That's a very tough thing to do and it probably takes a while, in fact the lag may be as much as a year or two on average.The actual amount seized is probably 10-100x the number you give.
November 24th, 2007 at 8:06 am
The most interesting part of the story on the two Abbotsford grow-op homes that were seized is this:"The act came into force in May 2006. Since then, some $2 million in assets have been seized including houses, cars and boats, with the funds used to compensate victims and in crime fighting."Two million in assets seized in almost two years from an industry worth up to $7 billion a year.Consider this along with the grand total of 17 people jailed by the RCMP's fraud, laundering and counterfeiting division in the last 5 years and you start to get a good idea how wonderful this country is for criminal activity.
November 23rd, 2007 at 9:40 pm
thumbsup why not stick to HTM
November 23rd, 2007 at 8:02 pm
satv – I mean allthumbs, or whatever – I think I am starting to understand you.Borat is a clown compared to you. AliG thumb in the pudding and pulled out a plum.Smile for sunny day in my heart with blooming delphinium in November and pull of global warmth for metro. Up, Up, Up, said Ha-Ha. I'm going to eat some…yogourt.
November 23rd, 2007 at 6:52 pm
*Stefani i mean Scullboy,Spectrum renting cost for simple unit is @$02.40 per sq.ft. your so called shoebox start there from 502sq.ft.Number of Bedrooms,Floors,Full Furnished,Un Furnished,Parking,Lockers,Amenities,Facility,Utilities,and Sq.Ft. play important role to fix the price to buy or to rent.*Mayors go to Victoria seeking transit promisescarrying with him the results of an unscientific but popular survey that indicates people want a SkyTrain line along BroadwayCLARK -UBCMillennium Line In The Making.*Three different cities, one theme Toronto, Calgary and Vancouver may be poles apart, but their office landlords (merrily) sing from same sheet .Tale of the tape of three citiesalways more room
November 23rd, 2007 at 4:41 pm
Anonymous,"hmm" indeed, sounds like >$2000 negative cash flow + the opportunity cost on (suggested)down of $300,000 (which even at 4% is equivalent to another $1000 per month)….where do I sign up?
November 23rd, 2007 at 2:34 pm
Hi Moldcity,Good ShotI was too excited even I've pulled over xbr5 for me but Gst and Duty info was not included seems like that will take us back to original prices.Thanks and nice to see you back.I will work on that info if that can turn out to be good deal, then xbr 5 will be mine.Hi5 moldcity.
November 23rd, 2007 at 2:33 pm
Moldcity:Real estate go up up UP! in Vancouver, so you can pull equity out of rocket ride downtown showebox and use it to buy your big screen plasma….
November 23rd, 2007 at 1:43 pm
may be I don't know much about crossing borderhi satv. Have you ever heard of the internet? Its this crazy new thing that lets you check prices and shop in other countries without even getting out of your chair. I think this thing is gonna be big!For example In just a few seconds I found out that you can get that TV you like in the states for $2895 USD instead of 4 grand. If you find a good price on it in Oregon you can get it with no sales tax. Too bad we don't have a deal like that here in the bestest city evaar!
November 23rd, 2007 at 1:29 pm
Black FridayHi Everyone,For the sake of black friday, I was monitoring my favorite item, My Favorite lcd tv,I have plan to buy on boxing day that will be sony bravia model:KDL52XBR4Price: C$3,999.99*Cross borderUS $3,999.99$4,499.99 Original Price-$500.00Price DropSource:Sonystyleca/Sonystyleusa.two hours driving time.four hours waiting in line on border.Duty+Gas+delivery charges.Label:Friday Hoser.or may be I don't know much about crossing border to loose my shirt.
November 23rd, 2007 at 1:21 pm
Until this RE bubble run its course, I don't see the Hollywood strike making an impact on local economy. Aviation sector lost 700 jobs, and forest was down the drain, but general economy barely felt a thing. The bubble is just too big to be deflated by small things. It can only pop under its own pressure.As for slums, they have always been there. The apartment got noticed because it has a "big bad corporation" as landlord, instead of job sixpack who owns a condo. Basement Suites in Vancouver Specials have a lot worse conditions, such as 5 foot ceilings and algae growing on the wall.
November 23rd, 2007 at 1:18 pm
I just noticed this revenue property for sale. Asking price: $1,148,000.http://nickparente.com/our-listings.asp?listing_id={7EB38268-8699-4C2D-8CA0-0BCB129CF398}Current gross rental income $3,410/monthI did a quick mortgage calculator test using $300,000 as the downpayment:Monthly Taxes and Insurance: $384.08 Monthly Principal and Interest: $5,207.46 Total Monthly Payment would be: $5,591.55 Hmm …
November 23rd, 2007 at 12:57 pm
Pope,Excellent point…I seem to recall last year BOC Governor Dodge taking CMHC to the proverbial "woodshed" over this – and yet it continues…..
November 23rd, 2007 at 11:13 am
I think the craigslist ads for Spectrum are pretty illustrative of where we are in the specuvestor scene. I've seen ads for $2000 for an "open loft style townhouse (wtf does that mean? It's either a loft or a townhouse!)" that is CLEARLY a small one bedroom apt.I have also seen ads for 1500/month for what looks like exactly the same unit.What does this mean? To me it points to Vancouver having passed the top. First we get a glut of specuvestor rentals available. These are actually the greatest fools because they bought at the top of the market. They'll ask ridiculous rents, which of course they won't get. More and more new units will come online which drives rental prices downThen we start getting bad news filtering through. First info about the American and Asian economies, then more and more annecdotal evidence about local people woh can't move their unit, and can't keep up the monthly payments. Then the REAL fun begins!
I believe we have in fact passed the top of the market and are beginning to see the other side!
November 23rd, 2007 at 10:54 am
True about the lack of local retailer competition Vanhattan, not only are they not competing with the US, they can't compete with large world class European cities. In a way its nice because traveling in Europe doesn't feel as expensive as you always hear because we're so used to being gouged at the till on everything here.
November 23rd, 2007 at 10:50 am
Holy S###!Have you seen this story about Canadian Mortgage spreads?Somebody going by the name 'Oh Please' posted this over on Mohicans blog – its astounding. The last few times mortgage spreads were this wide our economy went into recession. These are strange economic times.
November 23rd, 2007 at 10:34 am
"How are rental vacancies calculated and is the methodology correct?"probably obvious but i'll say it anyway…they call people who live there and ask "how many units in the building?" and "how many are currently occupied?"i know it's true because they called us twice in the past 4 years… and of course both times i said all units were occupied. don't know how they decide exactly on who to call… after all, i'm just a renter, not the property manager…
November 23rd, 2007 at 10:26 am
Thanks for the link Wombatos – Seems like I'm always posting a link to stories about falling house prices in the US, so I skipped this week. Anyone who doesn't know by now that prices are dropping in the states with bleak forecasts for at least the next year or so is either not paying attention or completely illiterate.Nice Greenspan quote at the end of that article:“Irrespective if we could identify them, we could not do much to defuse them,†he said of asset bubbles.Sure, nothing you could do – Taking your medicine early would never work because its always 'different this time'… until its not. I expect its only a matter of time before we start hearing similar comments out of the CMHC now that they're offering 40 year terms and zero-down speculator loans in the face of deteriorating affordability.
November 23rd, 2007 at 8:48 am
Drachen; "I keep seeing a rate of around 1% but that just doesn't seem possible to me, a quick walk around my neighbourhood shows more than that and we all know there's been a lot of rental inventory completing (condos owned by specuvestors)." I believe "rentals" only include buildings that are complete rentals, and do not include privately owned condo's being rented at all. The 1 % vacancy makes sense for these units, (few if any are being built) and these types of units are often being converted to condo's.
November 23rd, 2007 at 8:18 am
Scullboy brings up a point.How are rental vacancies calculated and is the methodology correct? I keep seeing a rate of around 1% but that just doesn't seem possible to me, a quick walk around my neighbourhood shows more than that and we all know there's been a lot of rental inventory completing (condos owned by specuvestors). Is the 1% calculation collected from one source and is that source changing because of new media and a different mix of landlords moving to places like craigslist?
November 23rd, 2007 at 8:12 am
And US housing prices are still falling (duh)http://tinyurl.com/23m5qb
November 23rd, 2007 at 6:25 am
My boyfriend just got accepted to SFU so I've been scanning Craigslist for places to rent.The things I've notices (and bear in mind it's anecdotal):1) It seems like listings have doubled in the last six months or so2) The listings for non downtown seem to have gone down while downtown went up
November 23rd, 2007 at 12:15 am
Why is ONNI buying slums? This media coverage of Imperial Pines is making them look like hell.Here is the Imperial Pines ad from Craigslist:http://vancouver.craigslist.ca/apa/485981757.html
November 22nd, 2007 at 11:00 pm
Relating to the generational sniping in the previous thread: Generation X vs. the Boomers.
November 22nd, 2007 at 9:52 pm
Love the post about shoppers heading south. I agree that retailers not being competitive on prices do so at their own peril. I just got back from London, a city known for being notoriously expensive, and I noticed that on many mens shoes, such as Prada, Dior, etc that they are about 30% more expensive here. I also found Vancouver prices to be somewhat higher on many other brands at all price points….Vancouver retailers need to get real, otherwise I will continue to do my shopping elsewhere.
November 22nd, 2007 at 9:35 pm
South Granville Lofts at 1525 West 6th are having a REALLY hard time moving. This must go down as one of Rennie's misses.I've watched the adverts in the Georgia Straight for months now and they're getting more hysterical by the week.Page 55 of last week's Georgia now says: "Buy for less than downtown. Below Replacement Cost. No GST. $50,000 off next 6 sales"I remember about a month ago there were "only 7 remaining"!