Friday Free for All!
Easter Edition! Here’s our weekend open-topic posting to discuss anything related to economics and the real estate market. A few stories to get us started:
-Condo supply growing like crazy
-The disappearing first time buyer
-Oil, gold and the Canadian dollar drops
-Canada following US downturn
-More pain in store for Canadian banks
-Turner answers questions about ‘greater fools‘
-Condo marketer says Translink plan ‘prudent‘
-Vanoc opposes any Beijing boycott
-Price of gas has Americans cutting back elsewhere
-BBC: LA’s subprime shanty towns
So what are you seeing out there this fine holiday weekend? Post your news, links, anecdotes and comments here and have a great weekend!
March 25th, 2008 at 3:01 pm
Van Man
Don't be so quick to judge those holders of ABCP as stupid greedy investors. I sold my condo last year expecting the market to turn much earlier and asked my broker to put my savings in something guaranteed as I do not want any exposure to real estate. He put me in ABCP in July at 4.35% telling me it is a AAA guaranteed savings instrument (T-bills were offering the same at the time). I thought nothing of it as I wanted to park my $$$ for a couple months while I determined what to invest in – two weeks later I was frozen.
I am not a naive investor and asked the right questions, but when told it was a guaranteed money market investment I felt satisfied, had it offered me a premium over T-bills, I would have had more questions and doubted its "guaranteedness". At this point I am just thankfull that I only have him a chunk of my assets to manage and am not looking forward to the lawsuit.
If Canaccord does not make me whole as the other banks have with their clients, I will be voting against Purdy Crawfords proposal.
I will also be never use Canaccord again for anything other than as an example of how not to do business.
March 25th, 2008 at 12:11 pm
Damn Dan
I find it interesting that someone who is so offended by ad hominem attacks as you seem to be posts exclusively ad hominem attacks without even the slightest hint of an opinion on the subject at hand.
Mocking me and my opinions without providing any complementary (thanks for the correction Freako) arguments or data about the state of the local market seems to be just misplaced anger on your part. Are you angry because you're afraid of losing your shirt in the crash or do you have some personal issues on the go right now?
Perhaps I went over the top on AP but I am just sick of the sub moronic level of brain activity that people like him pass off as a valuable opinion on Real Estate in this city. If gut feelings have value equal or greater than reasoned thought then Creationism is a valid idea, the Iraqis WOULD have welcomed the Americans with open arms and UFOs would be regularly visiting our planet.
March 25th, 2008 at 11:48 am
From blueskies' article: "She does not wish death upon Mom and Dad, but she can't deny, either, that she's looked far down that road to the day when they cash out and she, finally, can take her first easy breath of cashing in."
What a wonderful and uplifting read, indeed! Put in context of real estate, there is TONS of underutilised housing out there and more on the way. Prices will be sticky because sellers are not all that motivated. My parents' next door neighbors are in their 80s and still living in a 5 bedroom SFH.
It is almost ironic that the baby boomer generation was so good about paying down debt and saving for retirement through savings and pension contributions that there is no longer an incentive to sell their homes.
March 25th, 2008 at 11:40 am
Hey, a listing was just posted for the Residences on Georgia, by Downtownsuites.com, they call it coal harbour but it's right on the border of the west end.
$1250.
That unit has a really nice layout.
******This Rental has nothing to do with me***********
Located in the Coal Harbour area at West Georgia and Jervis Street. It is near Robson Street, restaurants, shops, transit, Canada Place, Stanley Park and the seawall
* Residences on Georgia – 1 bdrm & den 685 square foot apartment
* Northwest corner, city view
* Marble, granite countertops and designer appliances
* Pantry off kitchen
* Insuite laundry
* Parking available for 1 vehicle, extra storage
* Building offers a Gym, Conference room and 12 hour Concierge
* One year lease required
March 25th, 2008 at 9:54 am
from the Van Sun:
http://tinyurl.com/yvhmsc
good read!
March 25th, 2008 at 8:42 am
House Price Change 6-Month Annual Rate
Phoenix – AZ -28.21%
Los Angeles -26.70%
San Diego -27.17%
San Francisco -23.01%
Denver____ -12.76%
Washington -17.29%
Miami___ -27.59%
Tampa – FL -21.21%
Atlanta – GA -12.83%
Chicago__ -11.09%
Boston__ -9.89%
Detroit – MI -18.15%
Minneapol – MN -15.35%
Charlotte – NC -4.90%
Las Vegas -29.68%
New York -8.38%
Cleveland – OH -15.94%
Portland – OR -7.34%
Dallas – TX -12.12%
Seattle – WA -10.45%
Coming soon…
March 24th, 2008 at 10:29 pm
Yeah, I guess you're right. Wish such a clear-thinking individual such as hisself wouldn't confuse a befuddled old fart like me. Gotta admit, I have a hard time following his impeccable logic and bomb-proof opinions such as of hisself.
March 24th, 2008 at 10:21 pm
By complimentary, do you mean “free” or kind of like “flattering”?
Obviously he meant "complementary".
March 24th, 2008 at 9:09 pm
My opinion that RE is due for a correction is not based on gut feelings but rather research, many complimentary opinions
By complimentary, do you mean "free" or kind of like "flattering"?
March 24th, 2008 at 7:31 pm
No bubble eh? I guess she doesn't really look at the pretty graphs on her page: http://tinyurl.com/2nqpel
Aside from the price graph (which only goes up, btw) the small graphs are also very interesting, especially when comparing Feb 07 to Feb 08. Why is there more blue, but not more red?
March 24th, 2008 at 7:08 pm
If You Don’t Buy Now, You’ll Hate Yourself Later
http://tinyurl.com/3doqlo
In B.C. we have a strong local economy and good job growth, coupled with strong market fundamentals and sustainability, which result in no real estate bubble.
there! you been told!
March 24th, 2008 at 6:19 pm
hughz "Do you have any links for this?" Sorry hughz can't give you that, however it was a contractor I know who was doing strata work on an emergency basis, thus had access to the unit from the property manager. It's true; I know the unit number and building but they (that contractor)would be in a mess if I told.It was confirmed by other sources.
March 24th, 2008 at 6:15 pm
I have a gut feeling we won’t see a major correction d/t is stupid?
not stupid but misguided….
more along the lines of "wishful thinking"
the over supply problem would be swiftly taken care of at $300 sq/ft(pent up demand
) while at $700 sq/ft the market remains stagnant.
w/o easy cheap credit this pig won't fly!
March 24th, 2008 at 5:58 pm
"They found an 8!!! eight bed massage parlour in Spectrum"
Do you have any links for this? If true, all I can say is I am not surprised, but glad that I didn't live next door.
March 24th, 2008 at 5:25 pm
Scullboy "You can buy your own portable dishwasher and washer dryer for one of those apartments and still be way ahead on living expenses compared to, say renting a shoebox in Spectrum" Nope your wrong!
They found an 8!!! eight bed massage parlour in Spectrum c/w bins of new condoms, bins of USED condoms, fun stuff ..me thinks they are paying their rent!
March 24th, 2008 at 3:54 pm
Scullboy, are you sure about your numbers?
it seems to me the west end rent prices are way too high and it if weren't for international students they'd be vacant.
Exhibit A
http://www.rentersguide.com/hotlist/
1 bedrooms for $1500, with no concierge,no free gas f/p and stove, no restricted floor access, bedbugs etc.
I can site several examples where it's cheaper to rent in the newer buildings in the west end. The George and The Lions are two examples where you can rent a 550-590 sq ft unit for $1200-1350. meanwhile 1460 Barclay they want the same price and have filthy persian carpets in the hallway and really basic suites.
For two bedrooms it'll cost you $2250 to rent a 2 bedroom at 1111 beach but you can rent in one of the nicest buildings in vancouver, Parkwest 2 at 583 beach, for $2300 and that includes gas, parking, concierge, really nice facilities, no bedbugs.
I can ramble on about this for awhile. I know some of the west end buildings are much nicer than others but overall it seems the rents are just too high.
Spectrum is a joke, they were giving away 1 bedrooms for $1100.
Don't get me wrong. But an old stinky shoebox with no amenities or insuite laundry isn't worth the same price as a newer shoebox with amenities.
People have told me for years that the old units are bigger but they aren't. the renters guide has floorplans that indicate the sq ft.
March 24th, 2008 at 3:48 pm
scullboy,
Totally agree with you.
I think the realtors (TM) will be shocked when the bears come out of hibernation and demand NO GRANITE OR STAINLESS STEEL. Not only because it is cold and impersonal but because it represents real estate that is cramped and overpriced.
March 24th, 2008 at 3:29 pm
Interesting, in this article the MSM presents both sides of the argument rleated to Canadian House Prices
http://news.sympatico.msn.ctv.ca/TopStories/Conte…
March 24th, 2008 at 3:22 pm
Just a couple of thoughts on the "drab" West End:
1) THe trees and flowers and plants have all been there for a while, so it's lovel most of the year. Yaletown is all steel and glass. It's nice in it's way but the WE has a very comfy "lived in" feeling.
2) As far as I know, most of the people there are renters and have been for a while. They seem to be some of the last holdovers of the pre bubble frenzy. They're still easy going. You never hear the terms "Strata" "special levy" or "flipped it for 15K in 4 months, dude" there.
I'm not sure I'd put a premium on newness, especially in Van. The older buildings have units that are much larger. You can buy your own portable dishwasher and washer dryer for one of those apartments and still be way ahead on living expenses compared to, say renting a shoebox in Spectrum.
March 24th, 2008 at 2:45 pm
Anon:
"Your “gut” has been wrong for years"
Well, that's wrong on several levels.
1: My opinion that RE is due for a correction is not based on gut feelings but rather research, many complimentary opinions and the complete lack of an intelligent counter argument.
2: If I may use an analogy it is not "wrong" to say, "The sun will come up tomorrow morning." for 12 hours and then suddenly when the sun comes up it's right. That's pure lunacy. I am right now, I was right yesterday and I will be proven right when the market does finally correct.
March 24th, 2008 at 1:46 pm
No, but believing that your gut feeling has value greater than reasoned contrary opinion is stupid.
Your "gut" has been wrong for years – yet back you come and come and come – with ever more batches of "facts" explaining why it will be different this time.
Lighten up, dude. This is a west coast blog, not the Jerry Springer show.
March 24th, 2008 at 1:42 pm
I get what Jesse is saying. Although all nice and shiny now, the towers in Yaletown will become thought as all drab and dingy as much of the West End is perceived today by some.
What else explains the rent differentials between the two? The WE has better access to the beaches and Stanley Park, a generally nicer vibe from the residents, and rents which are somewhere in the range of 25% cheaper (depending on how you price in things like W/D, underground parking, etc.).
Given how quickly and homogenously the towers have gone up in the past few years, we'll probably have a severely outdated skyline in 20 to 30 years time. Fads and fashions exist in architecture, not just popular culture.
March 24th, 2008 at 1:30 pm
"Even then, there are people out there (some of them retired 'immigrants' from the US) who consider downtown Vancouver living attactive."
There was a time when the 30 year old buildings in West End were new and demanded an additional premium. Yaletown has the location and newness cachet; the newness will disappear and with it the newness premium.
March 24th, 2008 at 1:28 pm
"That’s a tautology. Oversupply of anything is due to prices being pushed higher than market clearing level due to speculation, hoarding or price fixing."
March 24th, 2008 at 1:11 pm
"Vancouver has had the most expensive housing in the country for well over 20yrs. I think everyone here agrees that isn’t going to change anytime soon. Why it’s more expensive then Toronto where wages are higher is best left for the academics.
In relative terms bby is cheap compared to vancouver"
I completely agree, but I wouldn't leave the why to academics because the academics that follow real estate trends are not usually the ones interested in human behaviour.
March 24th, 2008 at 12:57 pm
"Take a look at the West End for what happens after 30-40 years; the chiqueness factor of the new buildings fades."
The West End has been dense and living there popular for the last 30-40 years.
Although there have been downturns in some years, I don't see that changing in the long term unless more jobs start moving out of the downtown core. Even then, there are people out there (some of them retired "immigrants" from the US) who consider downtown Vancouver living attactive. And dense urban cores with a lot of activity will always be a draw for young singles. Having Stanley Park nearby doesn't hurt either.
March 24th, 2008 at 11:18 am
I think a better way of putting it is that there is an oversupply at current prices. I am certain if Vancouver’s housing were more affordable that there would be less “oversupply”.
That's a tautology. Oversupply of anything is due to prices being pushed higher than market clearing level due to speculation, hoarding or price fixing.
An exception for housing is if local demand goes dead like in Detroit and the market can't clear, since housing can't be moved to where the demand is.
March 24th, 2008 at 9:44 am
Anti-Pesto: "I am concentrating on the d/t market as that is where a lot of people claim supply is exploding. It is that statement I disagree with."
BTW thanks for commenting here. I agree the pure statement that downtown has an oversupply is incorrect. I think a better way of putting it is that there is an oversupply at current prices. I am certain if Vancouver's housing were more affordable that there would be less "oversupply".
"While people can point to stats that in a downturn all markets come down the same percentage, I am confident that won’t happen this time around"
It's worth pondering your point and fleshing out some more tangible reasons. I can certainly see a situation where a central core would maintain its value more than other areas for reasons such as: quality of life that comes with controlled densification, increased commuting costs, income stratification, etc.
On the flipside, condos cannot densify any more and prices have gone up quite a bit in the past few years. The areas with significant densifaction, like Yaletown, have not yet developed amenities like other areas and this could contribute, in the long term, to a less desirable area. Take a look at the West End for what happens after 30-40 years; the chiqueness factor of the new buildings fades.
As mentioned, affordability ultimately determines prices, especially for high density. Rental yields are extremely low for downtown condos so there is the "greater fool" mindset that is keeping prices high. The likely situation out of this, IMO, is that either incomes increase to cover rents or prices drop. My bet is on the latter.
It's been over 10 years since the last slowdown in real estate in Vancouver and even then it was not a prolonged slump and prices were not increasing significantly beforehand. A significant chunk of homeowners have never experienced a true bear market. My sense is there is an air of impermeability in prices that seem arrogant and naive.
March 23rd, 2008 at 11:26 pm
Seriously, ease up on the invective. I don't think your glass walls are rock-proof.
March 23rd, 2008 at 10:30 pm
Check out Garth Turner's response to a question of whether or not to buy a condo in Toronto: "High Carb Condo" here
http://www.greaterfool.ca/
I found it rather cute
March 23rd, 2008 at 9:40 pm
I drove out to Burnaby today on 1st ave, same that I've been doing for ~3 years now. At the peak of the selling season last year there were 20 for sale signs that I could count – not a single one was 'reduced'. Today, 17 so far, 4 reduced.
Maybe it's nothing… or maybe this party is winding down. At this rate there may be 30+ for sale, with even more reductions.
And my coworkers coal harbor condo, after $15K reduction, is still for sale.
March 23rd, 2008 at 9:13 pm
Anti Pesto
"So stating I have a gut feeling we won’t see a major correction d/t is stupid?"
No, but believing that your gut feeling has value greater than reasoned contrary opinion is stupid.
March 23rd, 2008 at 8:16 pm
You, apparently, do not. Ergo, in a sweep of logic, you are not intelligent AND your ‘opinion’ is a waste of space.
That is a little over the top. As far as I can tell, AP is just sharin an honestly held belief based on factual data. This is not a battle of good versus evil, but a discussion forum for people who want to (hopefully) understand the true state of the market. What will happen will happen and everyone is entitled to hold and share their take on the situation. What I truly do not like are intentional attempts to spin or skew reality through fallacious reasoning or outright falsehoods. I truly despise the subtle ones who pretend that they are neutral. You know who I am talking about.
March 23rd, 2008 at 7:36 pm
opinions of people who spend a lifetime studying the subject at hand tend to re-evaluate their positions.
You?
March 23rd, 2008 at 7:35 pm
I reserved judgement on you
wtf?
March 23rd, 2008 at 7:35 pm
Ergo, in a sweep of logic, you are not intelligent AND your ‘opinion’ is a waste of space.
wtf?
March 23rd, 2008 at 3:47 pm
So stating I have a gut feeling we won't see a major correction d/t is stupid? Would it be better if I were to quote historical stats that show it should correct? We all know that past performance is no guarantee for future performance, both on the upside or on the back downside.The truth is not one of us is sure what will happen.
Just for the record I've been in Vancouver since the mid 70s so I've been around longer then a good portion of the people on here have been alive. The only knowledge that has provided me is our population keeps increasing, and each economic cycle is different then the one before.
March 23rd, 2008 at 3:30 pm
Anti Pesto
"While people can point to stats that in a downturn all markets come down the same percentage, I am confident that won’t happen this time around, I do not have anything to prove it, just intuition. We will see soon enough. I beleive there will be a slowdown, even a pull back in some markets, but not in every market."
Well your intuition vs all of economic history AND the economic intellectual community. Hmm, which one weighs more. I reserved judgement on you the first time around because until now you hadn't really said anything monumentally stupid but do you really THINK that the opinion of someone who knows nothing and just has a "gut feeling" has any value whatsoever?
EVERYONE has gut feelings, INTELLIGENT people when confronted with contrary stats and opinions of people who spend a lifetime studying the subject at hand tend to re-evaluate their positions.
You, apparently, do not. Ergo, in a sweep of logic, you are not intelligent AND your 'opinion' is a waste of space.
March 23rd, 2008 at 3:13 pm
From the Vancouver Sun article:
"Others become small-scale landlords, renting out basements or extra bedrooms to tenants whose rents offset the mortgage."
Perhaps I am naive, but renting out the basement or extra bedrooms to offest high mortgage payments for 40 years is not my idea of home ownership.
March 23rd, 2008 at 3:05 pm
Antipesto,
This discussion hopefully has been informative to you as I suspect that you hadn't actually lived through the 80's and early 90s housing crash before. That's ok.. A lot of young kids out there who have 40 AMS haven't seen a housing recession yet. Soon I think they will, but they will soon adapt like we all did 25 years earlier. Life goes on.
The media and the stats are good at pumping out excuses. The stats are only current to what we are now. We had true stats about the capacity of what Nortel and JDS Uniphase could provide in the past. After the bubble, stats or not, they both collapsed. Stats can sometimes become their own undoing.
In the early 80s, it was the Chinese from Hong Kong who caused the housing bubble or so they said. The monster house syndrome. Oh yeah.. I could remember that time when I was working in the company and my Asian work mates were taunted and teased by some of my "white" colleagues that they were the sole cause of the bubble and the reasons they were having a tough time paying off the mortgage. Blame this on them! We knew now that there wasn't any truth to the BS, but I don't see the news media apologizing for it later on.
It's easy to make scapegoats out of the immigrants for our run up in prices, but I think we need to be fair to understand that immigrants today are a lot less wealthier than immigrants of the past. Still, I see the "immigrants" excuse being used even till today. I guess after 25 years, things get forgotten really quickly.
A free quick refresher course is coming soon, compliments of course from your Bank.
March 23rd, 2008 at 2:56 pm
Vancouver has had the most expensive housing in the country for well over 20yrs. I think everyone here agrees that isn't going to change anytime soon. Why it's more expensive then Toronto where wages are higher is best left for the academics.
In relative terms bby is cheap compared to vancouver.
March 23rd, 2008 at 2:41 pm
"Cheap condos in bby will have more effect on d/t condos then cheap condos in surrey, and cheap condos in abbotsford really won’t have any effect on those same d/t condos, but they might have an effect on Langley condos"
ummm … cheap condos? in the lower mainland? are you kidding? how do you reconcile that with vancouver having the most unaffordable housing in all of canada?