Friday Free for All!
Its Friday and that means free-for-all time here on Vancouvercondo.info. This is when we do our weekly roundup of news stories on real estate and economics. Here are a few stories to get you started:
- US Housing market woes bad for BC
- BC Credit union predicts strongest growth since 1985
- Fewer tourists coming to BC
- Video: Dan Rather on the Downtown Eastside
- Canadian home prices almost double in last decade
- Immigrants struggle in wealthy countries
- Gas prices predicted to hit record highs by summer
- Some expect oil to fall on growing supply
- The tell-tale signs of a recession
- Stagflation?
And last but not least:
- Coco News, an economic news blog!
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February 25th, 2008 at 9:19 pm
Long term gold market drivers have not changed: A secular bullish perfect storm trend for precious metals continues. Rapidly escalating global investor demand, easier participation by investors via ETFs, conversion of Middle East petroleum dollars to gold, rising new demand from Asia, possible central bank buying partially offsetting central bank selling, conversion from dollars to gold by large U.S. dollar denominated foreign exchange reserves, declining gold production, increased political and NGO interference to bring new sources on line, rapidly escalating costs to produce, delays and shortages of equipment and manpower, previous two-decade bear-market-induced shortage of intellectual capital for miners, safe-haven buying to hedge strong, reckless, competitive dilution of under-backed fiat paper currencies, probably continued de-hedging and continued troubling global political and religious tensions are just some of the factors contributing to the long-term bullish winds now blowing. In real terms gold remains undervalued versus nearly all other commodities and strongly undervalued as measured by the world’s fiat paper promises. … The Great Gold Bull has a long way to go. It just won’t go straight up. Got gold?
February 25th, 2008 at 2:37 pm
Let's just hope Mr. Obama has more brains than Mr. Danza. I feel a massive wave of protectionism coming on for the US and that does not bode well for BC.
February 25th, 2008 at 1:51 pm
Hey Krrish, don't go messing with Tony Danza. He's the Boss! Or at least he vied with a woman to be "the Boss".
In fact you could say he was like the Obama of the early '90s
February 25th, 2008 at 12:46 pm
The Sophia development is 85% complete, but the developer is opting out of the deal to complete the project.
Very interesting, but also very troubling as well, but not unusual. As I said in my earlier posts, I suspect that the "walking away" mentality will become the norm.
If the situation is not in favour for a developer or an investor, they can choose to walk. What if the situation becomes grim and many developers do walk away from unfinished projects or speculators abandoning their agreements.
Very interesting times.
February 25th, 2008 at 12:37 pm
Krissh1,
I don't doubt some people in BC make good money. I know a few, but you seemed to make it sound like a lot of them do which is not true. Secondly, why would somebody so rich and well off be willing to spend more than 70% of his or her income in housing? What is there to show for? There are other expenses as well that are more pressing, like a vacation, bills for your car, student loans (yes a lot of us borrowed money to get degrees and need to pay back) and the works. All of us are not obligated to reserve 70 to 80% of our pay towards housing. The reason a lot of these people do that now is because, they are in a bunker mentality. They know their properties are going up and up even more, so they are willing to sacrifice other discretionary expenses in favour of paying off their mortgages as quickly as they could. This only mindset is made possible because they have faith their assets will appreciate further and that they will be even richer than they thought possible. I mean, if you paid off a $550,000 loan with whatever means possible and you may realize a doubling of that initial price entry, wouldn't you tie up everything you've got into that single asset? You would..
What if house prices start declining and putting people into negative asset territory. The bunker metality will eventually be broken, because they realize that their own single performing asset is not appreciating to where they want to achieve. When prices depreciation start mounting, people will start to de-emphasize the importance of paying off their mortgages as quickly as initially wanted. They had lost faith in their asset class. They only want to meet minimum payments. They are, after all, credit card users too! They are used to minimum payments.
As the house pricing start their downward spiral, their confidence in their asset class will head down in tandem, to a point that some will either default, foreclose or even walk away from it all.
Home prices will eventually revert back to fundamentals, but I fear that with BC, that will be a very very slow train wreck, just simply looking at the history of BC housing.
I might be wrong, but Krissh1, people don't need high wages to buy a home. All you need are banks willing to loan. When financial institutions cease loaning money to people to buy homes, it really doesn't matter if you make $29/hr or even $50/hr unless you actually have "cash" to buy it out right, you will not be able to buy a house period.
February 25th, 2008 at 12:06 pm
Do you think he ran out of money and all the banks said no thanks, because he had no equity left? I don’t understand how he couldn’t get a loan to finish the job and get all his money from the pre-sales contracts.
Credit markets must be getting really bad if you can’t get the last 15% completed.
DING!
February 25th, 2008 at 12:04 pm
Rob Chimpman=tony danza
So?