Friday Free For All
Its Friday and that means open topic time:
-US subprime hits BC public institutions $29.3 million
-Non plane-crash related leaks?
-TD: Vancouver bubble warning at 2005 prices
-A decline in Canadian building permits
-Fed ready to cut interest rates again
-Canadians love American real estate
-A depressing real estate debate in the US.
-UK shops feel the credit pinch
-Not keen on realtors?
What are you seeing out there? Post your news, links and anecdotes here!
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January 10th, 2008 at 11:43 pm
The best news is that it’s going to double from here. Think about how that will help with your down payment, why you could double it in a year or two just at the time when the housing market here comes off 40%
Load up on good gold and silver stocks….THIS IS IT!
January 10th, 2008 at 11:48 pm
January 10th, 2008 at 11:57 pm
“The housing crisis and mortgage debacle have delivered a death blow to the US banking system. It is dead, only full accounting remains. The big banks are one by one going to suffer very public deaths, labeled at first as struggles with insufficient capital. Right now, many are vampires, as in walking dead. That is why they are lending much less. Their own executives are unclear of their own solvency, as illiquid markets conceal their own bankruptcy. Most of them are loaded to the gills with bad loan portfolios and severe losses on mortgage bonds. Where CDO bonds are involved, losses are amplified. The biggest players in CDOs will be the first banks to die. Losses have been huge, but it is very early. Ultimately, bank losses will be ten times larger than those disclosed to date.”
January 11th, 2008 at 12:07 am
“The Mortgage Bankers Assn reports an overall 5.6% mortgage default rate at end September, the highest since 1986! Of foreclosures in progress, 18.7% are prime ARM holders, and 17.6% are prime fixed rate mortgages. That means one third of foreclosures are from prime borrowers.”
Yes read this twice.
January 11th, 2008 at 12:08 am
January 11th, 2008 at 1:09 am
Gold has not doubled in CAD terms even from 5 years ago (USD 322 vs USD 890).
Of course your claim is vague enough that I can’t say it’s wrong of course.
January 11th, 2008 at 5:11 am
January 11th, 2008 at 5:33 am
http://tinyurl.com/345j4x
I,d be willing to bet that Vancouver contributed a lot to this. Anecdotal but maybe some of you can verify, friend was up on Cypress yesterday, said the snow was excellent, but couldn’t believe how few people were there! And they say the US economy doesn’t affect us!. Secondly furnished rentals that go to movie industry types are on the most commonly used site running at 25% vacancy! Expensive! Investors sucking wind I think! 51 out of 200 are vacant and have been for three months!
http://tinyurl.com/2ksva8
January 11th, 2008 at 5:41 am
Anecdotal…friend says skiing at Cypress is terrific, said he couldn’t believe how few people were there..guess thos American tourists don’t like our dollar…no wait were not tied to American economy..need more Chinese skiers?
http://tinyurl.com/39p8hs
January 11th, 2008 at 6:18 am
January 11th, 2008 at 6:23 am
“Honey, let’s pack our bags, we’re moving to that beautiful rainy & overcast Vancouver!”
…at least Expo 86 was during a period when Vancouver is……..presentable.
January 11th, 2008 at 7:51 am
January 11th, 2008 at 9:04 am
Top 10 reasons to buy gold!
1: Unlike real estate gold is a tangible real thing!
2: You can’t live in Gold!
3: It’s different this time!
4: No really, it’s different this time!
5: If there’s a massive economic collapse at least you’ll still have a pile of gold. Or at least bits of paper that SAY you have a pile of gold, they’ll make great firestarter when you’re freezing your ass off after the end of civilization.
6: Sure it’s at a record high, that’s why you should get in NOW!
7: I’m not kidding it really IS different this time!
8: It’s shiny. Mmmm shiny gold!
9: Some guy who writes a newsletter told me it’s the best investment right now.
10: Michael Randallbard IS somewhat more intelligent than Satv/Thumbsup/Krrsh, so if HE says it’s a good idea…
January 11th, 2008 at 9:05 am
It’s the good-paying jobs, stupid. And Vancouver doesn’t have them.
January 11th, 2008 at 9:50 am
January 11th, 2008 at 11:29 am
January 11th, 2008 at 12:34 pm
January 11th, 2008 at 12:40 pm
January 11th, 2008 at 12:41 pm
January 11th, 2008 at 1:51 pm
dollar… not tied to American economy…need more Chinese skiers?”
“Emerson accused Chinese officials of unfair discrimination in refusing to designate Canada an approved tourism destination, while granting more than 130 other countries the special status.”
http://tinyurl.com/2okq8j
But then the other 130 other countries do not harbor China criminals who stole billions of $$$$$, and keep the cake too.
- milo
January 11th, 2008 at 1:52 pm
January 11th, 2008 at 2:41 pm
Everyone else buys it so it becomes a self fulfilling prophecy. Kind of like property in many ways. Personally I’m a contrarian and therefore sticking to palladium.
January 11th, 2008 at 2:49 pm
January 11th, 2008 at 3:26 pm
January 11th, 2008 at 4:25 pm
There are about 350 lisings for rent just posted today! When I was looking in Van about a year and a half ago there were *maybe* 20 listings.
The increasing rental stock is just one data point. The Xmas numbers are in, and it was a dismal season.
The credit crunch is on worldwide.
CBC is showing stories of young people who obviously bought a property they couldn’t afford.
I finally figured out why Vancouver seems so… so… spacious. Nobody lives here! I really think perhaps half the places in downtown, particularly Coal Harbour, are not occupied.
I think if any “rich foreigners” are out shopping, they are snapping up Miami beachfront properties now. The rich become rich by getting in on the ground floor, not be following the hoi polloi.
2 years ago it was all about rich American foreigners coming to Vancouver and driving up prices according to annecdotal evidence.
Now it’s the other way around. Rich CANADIANS are going south and snapping up properties at a steal!
Vancouver’s been like a lighthouse in the middle of the ocean, a spec of land not swallowed up by the waves. But slowly….. slowly…. the waves are getting stronger.
People have spent an enormous pile of money on real estate. Obviously they felt there was an even bigger pile of money to be had. They’re not going to want to believe it *can* happen here, but everyone is starting to get that “the party is over” feeling. Well everyone except SatV but he’s our canary in the coal mine. I suspect the smart money left this year. The lucky money will be leaving soon. Then the music will stop and we’ll see who is left.
I can’t wait for the REAL party to begin *evil smile*
January 11th, 2008 at 4:43 pm
two guys in our building, gastown area, are both signing up for EI this week. movie technician crew types, and there is no work…
on the other hand, people are asking crazy amounts for rent. Not sure if they are getting them, but they feel emboldened enough to ask for $1800 for small studio with no balcony, no view.
i’ve always been a p/e believer, but what if e goes up enough to justify the p’s. just a thought…
i’ll agree with those that say nobody lives here. coal harbour is dead, compared to all the units.
January 11th, 2008 at 5:01 pm
First, the process is impossible and they make sure it’s deeply humiliating.
Second you get around 1500 bucks a month, which in this town won’t get you very far at all.
The economy is just about to fall off a cliff, but the specuvestors haven’t yet figured that out. Like I said, the smart money’s out. The lucky money’s soon to follow.
January 11th, 2008 at 5:01 pm
gold record
January 11th, 2008 at 7:06 pm
Regarding a RE price downturn after 2010, some variant of this has floated around in polite conversation for some time now, at least in the circles I hang around in. It is a minority position, but still viewed as being within the bounds of acceptable opinion. I do not think anyone would be on record as saying any sort of price adjustment above the 10% mark, with most probably suggesting a period of price stability. However, Anyone who suggests price adjustments of 40-50% being likely will rapidly find that they have crossed the bounds.
January 11th, 2008 at 7:47 pm
The Chinese are mad at Canada because we’re soft on evil people like the Dalai Lama and Falun Gong.
January 11th, 2008 at 8:45 pm
Employment was particularly strong in the B.C. goods-producing sector (up 4.1 per cent), with solid gains also recorded in construction, utilities, natural resources, agriculture and service industries
“*****My v6 Plate shows this is a beautiful british columbia so does Vancouver where beauty walk on ramp*****”.
http://www.canada.com/vancouve.....amp;k=1176
January 11th, 2008 at 9:19 pm
Has Tsur ever discloses how much he is vested in RE?
I would guess at least as much a some media personalities.
January 11th, 2008 at 9:27 pm
January 11th, 2008 at 10:02 pm
The price of gold is purely speculative - your return depends only on what someone else is willing to pay you for it. Everyone’s a greater fool.
January 11th, 2008 at 11:15 pm
January 12th, 2008 at 7:23 am
http://tinyurl.com/2lvar8
Despite little change in December, public sector employment rose by 6.5% (+208,000) since December 2006. Growth was particularly strong in public administration; utilities; health and social assistance; and education.
In December, employment in the private sector declined by 51,000, offsetting the gains made the previous month. Over the year, private sector employment notched up only 0.4% (+47,000), driven by part-time work.
This is a very unhealthy economy. It’s the private sector that pays the wages of the public sector (Taxes!). This is much worse growth then it looks!
.4 % private sector versus 6.5% public? Major deficits on the way!
January 12th, 2008 at 7:32 am
January 12th, 2008 at 9:17 am
Which means you get an extra whammy on the way down of course. This is also happening in Orange Country, which had been the home of many mortgage lenders.
January 12th, 2008 at 9:19 am
Strataman,
Construction Industry is here to stay till 2016 then look Canadawise or provincewise more jobs has been created.You can do some analysis the growth rates are actually up that’s mean because of labour shortage alternate jobs are available right away.let’s see where the jobs are:Unemployment Statistic
http://www.cbc.ca/news/interac.....mployment/
Comment by Asun
2008-01-11 13:52:26
According to this, does anyone know if any Vancouver movie employee not getting their pay? How can they pay their mortgage then.
1.Purchase jobloss insurance with mortgage your mortgage company will pay for that unless you get new job.
2.most strikes does not happen without advance notice so all employee’s can find another job unless strike settle up.
3.Pre register for strike- employees who stand on site to protest they also get paid to stand there.
January 12th, 2008 at 9:53 am
http://tinyurl.com/2bxa2a
Heh heh me thinksI’ll invest in tents!
Which begs the question that one January 9 CNN Money article so bluntly asks, “How Did They [the mainstream experts] Get Housing Wrong?†In other words: Leading economists thought “2007 would bring a real estate recovery, not the worst collapse on record.â€
January 12th, 2008 at 11:05 am
Because they were being paid to get it wrong.
Nuff said.
January 12th, 2008 at 11:14 am
10: Michael Randallbard IS somewhat more intelligent than Satv/Thumbsup/Krrish, so if HE says it’s a good idea…
Drachen,
My grandfather once told me that”Land worth more than gold”you can see every one worried about housing sector no one is worried about gold,You are not eating gold since vhb era you are participating for land and building blogs.Tell me if you need more lessons thanks!…..;
January 12th, 2008 at 11:59 am
The weak link - US consumer confidence is already waning as the housing market collapses in many regions, wiping out personal wealth with it. “I think our demand fudamentals are fine, but alot of what looks solid can be kicked aside if the US slides into recession” Mr Porter (deputy Chief Economist BMO Nesbitt Burns). In fact sime cracks are already beginning to show, with disapointing job numbers released yesterday. Of particular concern was weakness in Canada’s cnstruction industry.
January 12th, 2008 at 12:01 pm
January 12th, 2008 at 12:40 pm
dum dum dum dum dum…
January 12th, 2008 at 1:13 pm
.. being paid to scam the public is as old as Capitalism
January 12th, 2008 at 2:52 pm
Same as you turned it on but /b instead of b in the angle brackets.
So it looks like (b)BOLD(/b) where ()= angle brackets.
January 12th, 2008 at 3:03 pm
Means that when the housing busts 50% of Vancouvers high (as above $20.00/hr) wage earners will be unemployed! We are going to get hit far harder then the US.
January 12th, 2008 at 3:11 pm
January 12th, 2008 at 4:45 pm
But the ‘code’ is only the first uninterrupted block of text ie. (a href=”www.blahblahblah.com”)link to blah(/a) to put a direct link to a website (do not actually follow the link, it’s just being used as an example) looks like:
link to blah
January 12th, 2008 at 6:43 pm
Cool!
January 12th, 2008 at 10:09 pm
January 12th, 2008 at 11:17 pm
But really that article takes the same approach as the bull arguments in that it completely avoids talking about fundamentals. No mention whatsoever of price/rent or price/income. Just two-pages of non-quantitative babble that could be summarized as “it’s different here” and “fundamentals don’t matter”.
January 13th, 2008 at 12:11 am
I always try to avoid answering the obvious question: “So, how long is this current real estate boom going to continue?” Predicting when the bubble will burst can be dangerous, if for no other reason than I might live to regret being proved totally wrong.
Just calling it a bubble is unusual for the local press - sure they don’t mention fundamentals, etc, but how do bubbles usually end?
January 13th, 2008 at 4:33 am
The last thing they want to do is signal a peak - this would trigger the sale of all those negative cash flow condos owned by speculators, who rely on capital appreciation to justify not selling - this of course would upset the current demand/ supply balance and down she would come.
Another, thing I find conspitiously absent from the article is the risk of “inflation” (a growing issue in the US) and the likely need to raise interest rates in the not too distant future. In 1981, a 50% rise in interest rates (from 13% to 18%) caused the market crash. At today’s current low rates, a 50% rise in rates is only a couple of points.
January 13th, 2008 at 6:09 am
Precipitated not caused. Interest rates fell all the way back down to 13% as the market declined. If the root cause of the decline had been interest rates alone, prices would have recovered as interest rates fell.
But IMHO if interest rates had not spiked - and of course if there had not been a US recession - we would have seen a much slower decline, like in the late 1990’s, but to the same real price level.
January 13th, 2008 at 9:31 am
Don’t expect the provincial government to create jobs when their revenues decrease. They will never go into deficit.
January 13th, 2008 at 11:40 am
January 13th, 2008 at 1:46 pm
I still maintain that the bump of the ’90s was not a bubble but an early characteristic of the bubble we are still riding.
January 13th, 2008 at 2:13 pm
Precipitated not caused. Interest rates fell all the way back down to 13% as the market declined.
Some time ago, Geezer was holding the “rates sunk the market in 1981″ line, so I looked into the Sauder Excel data. Here is a repost of what I found:
—————————————————–
Absolute interest rates in themselves don’t mean anything. It is rates relative to prices that matter. Below is the Vancouver SFH data I posted the other day:
Quarter Rates Prices in thousands.
1980.1 14.69 115.73
1980.2 12.92 130.37
1980.3 14.5 146.86
1980.4 15.6 171.69
1981.1 15.75 233.53
1981.2 18.55 229.73
1981.3 21.46 226.00
1981.4 17.79 208.72
1982.1 19.41 191.63
1982.2 19.1 183.34
1982.3 17.49 170.21
1982.4 14.34 150.78
Between q1 1980 and q3 1983 (18 months) prices went up a whopping 95% as rates also went UP from 14.69 to 21.46.
Let’s check the way down. Between q3 1981 and q4 1982, prices went down 34% AS RATES FELL FROM 21.46 to 14.34.
Geezer’s notion that 19% rates brought the market down is completele BOGUS.
The market went down because it ran ahead of fundamentals and it was time to pay the piper.