He’s toying with you gloomy guses! Too funny!

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Gold is going to $1,650 within the next 12 months. Buy some today or lose out on easy money. BTW, what would YOU invest in now? This should be interesting to hear.

Oh yes most investors are just like me, making about 5 to 10 grand
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“A condition of slow economic growth and relatively high unemployment – a time of stagnation – accompanied by a rise in prices, or inflation.

Investopedia Says… Stagflation occurs when the economy isn’t growing but prices are, which is not a good situation for a country to be in. This happened to a great extent during the 1970s, when world oil prices rose dramatically, fueling sharp inflation in developed countries. For these countries, including the U.S., stagnation increased the inflationary effects.”

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I didn’t say it was smart, it’s just what happens most of the time. Investors for the most part are about as bright as Randallbard, so they invest in “gold” because it’s the gold standard right?

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Yeah, I know, we are singularly different.

Canada has nothing to gain from inflation, and lots to lose, in both the public and private sectors.

Frankly, I can’t name any nation that has anything to gain by rampant inflation. Can you? It’s not as though any populace got together and voted, “Yes. We need more monetary expansion”.

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I was basing it on a random stat I remembered from first or second year Economics class, that housing had gone up at a ratio of 3 to 1 versus income since 1970 and a cashier I knew who worked at the same grocery store from the late 60′s to the end of the 90′s compared with the prices of houses in the area where she lived.

The problem with having this argument everyday is idiots like Krissh haven’t seen how fast “specuvestor” sentiment changes. 95% of Sophia buyers were speculators, I’m guessing 75% of downtown (that means we need 7,500 buyers who earn $300k per year to suddenly move here).
Krissh must’ve moved here from Kazakhstan in 2003, and missed the previous ten years of flat prices because he thinks past performance indicates future return.
I may not have posted on here until recently but I have been reading several blogs for years, I studied business in post secondary and have worked in the industry so i like to think I have something to offer.
If anyone could bring valid points on why it’s a good idea to buy right now (at the top) please post them.
Krissh you have nothing valid to say so this is not an invitation for you to post more verbal diarrhea

Vancouver is a great city, and our tourism proves this but there are a lot of real world class cities for the big boys with big money to throw around, it’s arrogant to presume Vancouver is the best place on earth simply because we were born here( except for Krissh who’s spelling indicates he did not grow up here).

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As for stagflation, don’t assume that just because the US seems headed for it, Canada is too. Canada has nothing to gain from inflation, and lots to lose, in both the public and private sectors.

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It depends on a lot of factors. As an example, look at Florida construction: excess inventory and no demand yet builders still have projects they are trying to complete! Huge deflation because suppliers don’t scale back and demand low and going lower.

Oil is an imperfect example of the contrary, where supply can be changed relatively quickly and keep prices from deflating (though there are a LOT of other factors that make this an imperfect example).

Agriculturals are something different. It appears like increased demand and supply shocks are driving up prices. That and speculation. Peak food, anyone?

“During economic turmoil investors like to shift their money to “hard” assets. It happens every recession.”

It’s an interesting exercise to look at historical commodity prices.

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Or 1929?

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I thought this was the beauty of stagflation; where we get the worst of both worlds. Sky-rocketing costs coupled with less ability to pay for it. Apparently, both stagnation (recession) and inflation can be caused by inappropriate macroeconomic policies.

Maybe we could just pretend we are dealing with a sane economy.

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During economic turmoil investors like to shift their money to “hard” assets. It happens every recession.

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one possibility is wheat and other feed grains

another is potash, critical fertilizer ingredient

gotta eat you know!

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“the numbers tell me there is underlying strength in the market.”

Ahh, are you off your meds again? Numbers don’t talk man. And you haven’t provided anything substantial about how you chose to interpret the numbers and on what basis you’re throwing out all historical data prior to the mid ’80s. Are you really saying that 40 year mortgages and partner mortgages will weigh more heavily than the introduction of mortgages? Because that had no impact on RE prices. Think about it, you’re going from no mortgages to mortgages in the recorded history of real estate. IT HAD NO IMPACT.

You’re a loon. Go back on your meds and start experiencing the real world again.

As for the DJIA why not start quoting RE prices in India like Krrish? “Prices are falling in the states but the DJIA is not falling therefore prices won’t fall here?” Does that accurately paraphrase what you’re trying to say?

And your last feeble gasp, “Prices won’t fall because they haven’t fallen yet.” That’s really as pathetic as it gets, it stands to reason you’re immortal then because you haven’t died yet.

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It sounds like your argument is “It should have gone down by now but because it hasn’t gone down, it will not”.

..that’s just retarded

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Stop smoking weed. Your not making sense. The market will crash. No ifs or buts. No justifying. Too much negativity. US is not going to recover. It’s got a long way down.

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Bank of Canada has been just a rubber stamp.

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B.C.’s boom doesn’t echo in the outskirts

http://tinyurl.com/33mxoj

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Canada’s Economy slows as Expors fall

http://tinyurl.com/3alngu

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“The notion of a constant one-to-one relationship between income and RE price across time is no longer useful compared to say, the pre-80s. Population has boomed (natural and immigration) and Canadian real estate is up for grabs for investment both locally and globally”

I think the paradigm shift argument has been used before –it’s different this time right?, And the population explosion argument has bald tires, and has little traction.

What you have left is the creative financing which is blowing up everywhere in much more populated cities than Vancouver.

I have a feeling, yes just a feeling, no science based research like yours, that when the bubble finally pops in Vancouver, our market was fuelled by irrational buyers, accommodated by cheap money.

50% drop from the peak is not far fetched.

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You’re correct, it’s only an opinion. I’ve relied on two major sources:

1. Paulb’s Numbers
I’ve followed Paulb’s Numbers daily for some time. My interpretation might be very wrong, but the numbers tell me there is underlying strength in the market. There has been no hint that RE prices will retreat by at least one-third, something which should have happened well before now given the slew of bad news in the past several months (plus typical end-year sales slowdown). On the contrary, prices are still (very) high, at worst only an average 10% off new highs. Btw, it doesn’t matter whether these prices are nominal or real. These are numbers compared to those only four or five years ago.

2. DJIA
I’ve monitored the DJIA daily for the past 20 years so I’ve some idea of its movements. Despite the tsunami of bad news for the US, right now it’s only about 10-15% off its all time high (14,000 points). By now, it should have already tested the 10,000 or at least 11,000 point level using the principle of minimum one-third retracement in a bad market. But, it never went below 12,000 points. To me then, the underlying strength of the Dow seems intact. I’ll be very foolish now and predict that the Dow will hit a new high by late summer. This means that US property prices will bottom out by winter 08 and see a recovery in early 2009.

Naturally, when the numbers from the two sources take a decisive turn (one-third retracement) for the worse, my perceptions will change accordingly.

65% drop or bust baby! (based on past bubbles, wages/housing prices and P/E ratios)

That would be really nice, but I doubt it.

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YES
Yes there is Inflationary presure in Vancouver like any other stunning cities of the world, because of competition world it is hard to see any down turn,in lots of sectors rates of pay also keeping up with inflation,I can see more than 85% people are in good condition 15% on the bottom line are too common, rents are also affordable and people can easy adjust them self just by moving to suitable places.I can write down a book but let me finish here and yes one complaint for sure, your question was not appropriate as Vancouverites it makes sense otherwise you should have keep Vancouver out of question then I was able to answer more sufficiently -anyway nice to read you after long time…..

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The notion of a constant one-to-one relationship between income and RE price across time is no longer useful compared to say, the pre-80s. Population has boomed (natural and immigration) and Canadian real estate is up for grabs for investment both locally and globally.

Further, there are now mortgages which allow for more than one income to be combined and there is also available 40 year amortization. These ‘creative’ mortgage packages mask the real relation between income and RE price. Until these factors are teased out it’s simplistic to just adjust property prices for the compounded, annualised inflation rates to determine the ‘real’ price.

In future, if not already, one may just talk about ‘affordability’ (see Jadeeast’s post for link) rather than adjusted or real prices because it will be accepted that RE prices have moved beyond the reach of the average income earner, something unthinkable in the pre-80s.

Here’s a previous post from bdk:

In the 1970’s cashiers were making $30k+ a year and could buy a house in Dunbar for $50,000…Now that same cashier making $50k would be looking at a minimum of $1.2 million to buy the same house.
How have wages risen here?

Maybe, you can comment.

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Hey wait a minute. If the problem in Oz is that housing is unaffordable, aren’t falling prices the solution? How can affordability and falling prices both be problems at the same time?

What does “mortgage stress” have to do with falling prices? The price you paid for your house is either affordable or it isn’t, regardless of whether prices go up, go down, or stay the same.

People who buy at historically low interest rates and then get into trouble when rates go up have nobody but themselves to blame. Nobody forced then to buy a house.

Who benefits by keeping “owners” making payments on houses with falling values?

Where have I heard this song before?

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