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friday free for all!

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Its Friday free-for-all time here at Vancouver Condo Info, but this time its only a semi-free-for-all. Let’s see if we can stay away from Hitler and religion on this thread and focus on economics and real estate. Here’s a few stories I’ve noticed recently:

– Interest rates going down
– Mortgage rates going up
– Coventree outlook not good
– Inflation lowest in BC
– PM: Economic slowdown likely
– Another day, another $20 billion
– Harper says NO to ABCP bailout
– Subprime infection in the financials
– Calling bottom on the US market

So what are you seeing these days? Post your Hitler-free anecdotes, interesting links and news here!

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Re-diculous

Merry Christmas….lots of Holiday reading for you here:http://money.cnn.com/real_estate/foreclosures/

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TheVanMan

Patriotz said:You couldn't make a worse comparison. A handful of airlines selling a service which lasts only a few hours, with an adjustable supply (flight scheduling)and highly variable demand, versus a huge group of landlords selling a service which lasts for years, with a relatively static supply and demand.I said:But this is where you are misinformed. Rental units are never relatively static in supply and demand. During a housing recession, lenders may curb or stop lending, but the builders DON'T! They keep building, albeit at a slower rate compared to the boom. Statscan report showed it all from 1992 to 2000. How are you sure that some of these homes aren't destined for rentals?Homes and planes both share 1 thing in common. Fuel! You need fuel to heat the home in the winter and fuel to fire up those jet… Read more »

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patriotz

In a sense, the real estate rental market operate like an airlineYou couldn't make a worse comparison. A handful of airlines selling a service which lasts only a few hours, with an adjustable supply (flight scheduling)and highly variable demand, versus a huge group of landlords selling a service which lasts for years, with a relatively static supply and demand.In the case of rental apartment complexes, every tenant pays a different market rate rent.Wrong, there is only one market rate, the rate that an apartment will rent for when advertised openly.Some sitting tenants may be paying below market due to rent controls, of course.

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TheVanMan

Blogger Patiently Waiting said… "Unless people bought foreclosed homes from the banks or at a deep discount to real asset value, you will be subsidizing the renter in Vancouver at market rent prices." I guess it depends what you mean by subsidize. From the renters perspective, paying market rent means you are not subsidized.But what is market rent? Imagine an airplane full of passengers and all are sitting in the same economy class. Are all of them paying market rate for their fares? Not necessarily. Because airlines need to fly with a full load to justify its operating costs, they need to fill all of the seats by any means possible. So, some passengers pay full rate, some pay more than full rate and some pay less or even none because of air miles. In a way, some of these… Read more »

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Re-diculous

…just browsing canoe this morning and noticed the Forbes article listing the 10 cities with the most overpriced real estate which was previously posted a couple of months ago…..here it is again for those that missed it then…a good readhttp://tinyurl.com/2ll926

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Michael Randallbard

HEY CHRISTMAS SPENDERS

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TheVanMan

I was in Vancouver, Planet Earth, where the RE market peaked in 1995 after rising for about 10 years, and then fell for about 5 years.Apparently there is a Vancouver on another planet which you are referring to.Hmmm, I see. Don't get too excited buddy. I just put a test on you to see where you're getting your ideas from. Now, I know where.Statscan article # 11-010-XIB under the title the "West Coast Boom" written by P. White, P. Cross and M. Michalowski in May of 2006.And no, I live in the same Vancouver as this article described.First of all, congratulations on your purchase of a home in 2001, or eh super excellent timing. Very few real estate moguls could time it just as well as you do. Before that article came out, however, a few of the real estate… Read more »

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Anonymous

If Japan is of any indicator, we could see a prolonged housing deflation. Or debt deflation, where prices keep going down and down as there is no end in sight. what a coincidence! this is what is happening now in the US and elsewherethey don't see a bottom to the problem anywhere….. so yes we potentially have long term depreciation for the entire RE asset class….California is a warning to us, the market is screaming "GET OUT" maybe we should listen.blueskies

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Van Real Estate Cras

Anybody involved in RE will tell you privately that the numbers just don't make sense.Look out below!

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Patiently Waiting

"That means that the 150k detached median in 1987 would be about 242k today."Yeah I agree, because according to family incomes, most SFH in Vancouver should be in the 242k range. That mean our real estate is 3x or 4x overpriced. Wow, just wow. I'm glad I'm on the sidelines, just watching.

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Drachen

I pick 1987, I believe that the bubble of the '90s was nothing more than the first hump of our current mega bubble.IThat means that the 150k detached median in 1987 would be about 242k today.

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patriotz

Why chose the year 2001? Why not choose the year 1994-1997? when prices were more sensible?…The RE market… bottomed out in around 1994…I was in the market then. Where were you?I was in Vancouver, Planet Earth, where the RE market peaked in 1995 after rising for about 10 years, and then fell for about 5 years.Apparently there is a Vancouver on another planet which you are referring to.

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Patiently Waiting

"Unless people bought foreclosed homes from the banks or at a deep discount to real asset value, you will be subsidizing the renter in Vancouver at market rent prices."I guess it depends what you mean by subsidize. From the renters perspective, paying market rent means you are not subsidized.Once the baby boomers start to retire and sell their real estate, I think we'll see endless real estate deflation. Of course, as the boomers start to see their "investments" deflate the pressure will be on to get out while they can still make money. Further deflation. If I buy real estate in the next ten years, I'll buy assuming that it will deflate. Hmmmm, I may never buy."the rental board only allows rent raises of current inflation + 2%"In the case of deflation, can tenants apply to have their rent decreased?… Read more »

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TheVanMan

Nobody is subsidizing the renter. He's paying the market rent, the same rent he would be paying if the buyer had paid a sensible price (say in 2001) and were making a profit.The buyer is subsidizing the developer or previous owner, by paying more than the place is worth.Patriotz,Why chose the year 2001? Why not choose the year 1994-1997? when prices were more sensible?!? Is it because you bought in 2001 that you think prices were sensible then?Even people who attended Tom Vu's real estate seminar could not even use his techniques to buy properties at cheap prices that will ensure a profitable investment. And that's in the early 90s. The RE market then fell out of its shoe and bottomed out in around 1994. I was in the market then. Where we you?Unless people bought foreclosed homes from the… Read more »

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patriotz

The government should force owners to allow people who "cannot work" like Steve there to live in their foreclosed homes?No. I am saying that owners of foreclosed properties should not be allowed to let them become neighbourhood hazards occupied by squatters, infested with mosquitos etc. These properties should be properly secured or sold ASAP to someone who will live in them or rent them out.And let's not hear anyone say "nobody will buy them", drop the price enough and there will be a buyer.I think most of these empty houses are just pieces in the shell game that the finance industry is playing in an attempt to hide its losses.What is a negligent property owner? As long as they are following the laws I don't see any issues here.A negligent property owner is someone who is not following the law.… Read more »

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Had Enouch

According to the Times Colonist Victoria is untouchable as we are an Island and we have our own GDP. Fancy that!http://www.canada.com/victoriatimescolonist/news/business/story.html?id=2889ba88-40f3-400f-b40d-70519af63cd

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Anonymous

I for one, don't understand why people think that there's an unlimited supply of renters out there. Not only that, but renters with deep pockets. We've already determined that the population of BC is only increasing at 1% per year. Interesting one to watch on craigslist would be infinity towers, due for completion Feb 1/08. They're posting ads, asking $1150 for a one bdrm, $1300+ for a two bdrm. Who would pay that to live in Whalley? Oh right…I forgot about the gang members. Oops.

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Warren

patriotz,I'm not sure I understand your point. The government should force owners to allow people who "cannot work" like Steve there to live in their foreclosed homes?All of that extra housing WILL be rented as soon as owners who are bleeding money lower their rental rates until they get to the level that people "on social assistance who cannot work" are willing to pay.They can follow the example of one city in the central valley, which is imposing fines of $1000/day on negligent owners. A great incentive to unload the property pronto to someone who will make use of it.What is a negligent property owner? As long as they are following the laws I don't see any issues here. If they are not making their mortgage payments that's the bank's problem. I like to think we still live in a… Read more »

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patriotz

Steve, 50, who declined to give his last name, moved to tent city four months ago. He gets social security payments, but cannot work and said rents are too high.This in a nutshell is why people are homeless – they have personal problems. It's got nothing to do with the RE market.There are lots of people with the same income as Steve who are not homeless. They share rentals with other people.If you put on your economic thinking cap for a moment, it's clear that a glut of housing, which is the root cause of the RE crash and foreclosure boom in the IE, cannot cause homelessness. Quite the opposite. All that extra housing is going to have to be rented out to someone.That said, local governments have been negligent in not imposing greater obligations on owners of foreclosed properties.… Read more »

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Rainy Marketing Syst

Look what going on in the USA: growing tent cities in the suburbs.

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Drachen

Too bad we can't just set it up to automatically shrink any comments by MR and Thumbs.

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Anonymous

but why not admit your mistake and get into the market now while there are still properties available buying now is buying into the "buy high sell higher" paradigm in other words "gambling"stay out of the market!unofficial buyers strike in progressblueskies

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1oz

Too much Randalbard! We know Vancouver has crime issues, we don't need to post every instance here. I'm glad the new blogger system lets you click that little picture by the posters name to shrink down the post – handy for stuff you've already read (or don't want to read).

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Michael Randallbard

Oooops I had more.RCMP investigating possible drive-by shootingDec, 21 2007 – 8:50 AMSURREY/CKNW(AM980) – Surrey RCMP are investigating what appears to be a drive-by shooting near 68th Avenue and 148th Street just before 2am.Residents report several gunshots followed by 2 or 3 vehicles speeding away.Police found several bullet casings but no victims. —————————-Mounties looking for man who tried to abduct an eight year girlDec, 21 2007 – 1:10 PMCOMOX/CKNW(AM980) – The Mounties in Comox are looking for a man who tried to get an eight year girl into his car.Police say the man approached her as she was walking to her school, Puntledge elementary.She ran off and was able to give investigators a good description of the suspect.He has short, dark hair …spiked in the front and he was driving a mid -size black car. —————-Man in serious condition after… Read more »

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Michael Randallbard

The Best Place on Earth…."LANGLEY – A 43 YEAR OLD LANGLEY MAN HAS SERIOUS HEAD INJURIES AFTER BEING ATTACKED BY A GROUP OF TEENS AT THE MAIN BUS LOOP ON LOGAN AVENUE AT GLOVER ROAD LAST NIGHT.HE GOT INTO AN ARGUMENT WITH FOUR TO FIVE YOUNG PEOPLE.A 17 YEAR OLD GIRL STARTED PUSHING HIM.THEN A 15 YEAR OLD BOY SLAMMED HIM IN THE HEAD WITH A SKATEBOARD, CRUSHING HIS NOSE.THE VICTIM IS IN CRITICAL BUT STABLE CONDITION AT ROYAL COLUMBIAN HOSPITAL.HE IS IN A COMA.POLICE ARE LOOKING FOR WITNESSES TO THE ATTACK.IT HAPPENED AROUND 730 LAST NIGHT.THE TEENS REMAIN IN CUSTODY."

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