Friday Free for all!
Spring thaw edition! It’s Friday so lets do our standard open-topic post for the weekend, here’s some stories I’ve noticed recently:
-Canadian housing boom ‘over’
-Vacant land sales soar in Fraser Valley
-Victoria prices 23% above ‘fair value’
-Calgary sales plunge by 35.9%
-The cash-back mortgage hustle
-EcoDensity and 18,000 empty condos
-Merrill Lynch cuts 4,000 jobs on mortgage loss
So what are you seeing out there? Are we set to copy the housing boom hang-over the US is going through or does everyone want to live here? Post your thoughts, news, links, and anecdotes here and have a great weekend!
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April 18th, 2008 at 1:44 am
“Proprietary housing valuation model” = smoke and mirrors.
How about some numbers? Victoria is about twice as expensive as Ottawa, a city 4 times as big, with similar rents, and higher incomes.
Price/rent in Victoria is as out of whack as in any California market.
50 least affordable housing markets
This table covers US, Canada, Oz, and NZ. Kelowna, Vancouver, and Victoria are the only Canadian cities at 13, 15 and 22 respectively.
Oh BTW Miami is number 25.
April 18th, 2008 at 5:51 am
Housing Sales Tumble Across Canada
http://tinyurl.com/62elh4
The last paragraph I thought was interesting two ways, (1) essentially admitting that prices could indeed come down if conditions are not met - take heed BOC!, and (2) the concept of the next rate tightening cycle, where, I suppose all bets are off
“There’s a window of opportunity for the market to cool down and affordability to improve before the next rate tightening cycle, and if that happens … we shouldn’t see a pullback in home prices,” Mr. Alexander said.
April 18th, 2008 at 6:09 am
http://vanmag.com/articles/08apr/Sittingout.shtml
Even references this blog on page 3 and summarizes the Bull and Bear cases on page 4
April 18th, 2008 at 8:15 am
I’m speechless.
April 18th, 2008 at 8:58 am
April 18th, 2008 at 9:09 am
April 18th, 2008 at 9:15 am
http://vancouvercondo.info/for.....c.php?t=46
It would also be nice to graph search terms like ‘moving’ - I just did a craigslist search for that term and see a lot of ‘moving out of province’ or ‘moving to the US’ for sale ads.
Imagine being able to graph the explosion in listings of ‘granite countertops’ or ‘motivated seller’
April 18th, 2008 at 10:29 am
I convinced my parents to list their place, take the profit and rent until the market crashes/corrects. I only hope that the house sells before the bottom falls out. Their first open house is this weekend.
I’m curious to see how this all plays out.
April 18th, 2008 at 10:55 am
I think myself and your parents could possibly time this thing absolutley perfectly.
April 18th, 2008 at 11:13 am
April 18th, 2008 at 11:20 am
______________________________________________
Full article:
http://www.azcentral.com/arizo.....s0409.html
April 18th, 2008 at 12:33 pm
April 18th, 2008 at 12:42 pm
I won’t jump into the housing market after a decline of 10%. I will wait until it starts to make sense, even if it takes 10 years.
April 18th, 2008 at 12:44 pm
April 18th, 2008 at 1:25 pm
April 18th, 2008 at 1:25 pm
April 18th, 2008 at 1:30 pm
If westside prices dropped 40%, I’d be in like Flynn, bottom or no bottom.
April 18th, 2008 at 1:46 pm
My real-estate agent says that I can use the equity in my condo to get another one and it sounds like great idea to me. People will always want to live downtown. If you like cafes and restaurants it’s the place to be.
April 18th, 2008 at 2:09 pm
I promise to avoid being baited by either nitwits after this.
Good luck subsidizing your tenant Rob A. It’s always a good idea to listen to someone who’s trying to sell you something on a commission basis , forget due diligence and Vancouver is different than the entire world, you’re right, good job, keep up the good work. There are a lot of great investments in Spectrum 1-4, go for it! Everyone wants to live downtown! You pay $3000 a month mortgage and if you’re lucky someone will pay $1400 with parking so you’re only losing $1600 a month for 25 years! Everyone is doing it!
Please post where you bought so I can check up on your progress sporadically and laugh my ass off at a hotel lounge on Davie with all my friends who are richer and better looking than you.
April 18th, 2008 at 2:13 pm
April 18th, 2008 at 2:20 pm
April 18th, 2008 at 2:21 pm
I promise to avoid being baited by either nitwits after this.”
LMAO
April 18th, 2008 at 2:26 pm
B.C. housing market slows down
Bruce Constantineau, Vancouver Sun
Published: Friday, April 18, 2008
The B.C. housing market lost steam during the first quarter this year as Multiple Listing Service sales across the province fell by 13.5 per cent to 18,635 units, the B.C. Real Estate Association reported today.
http://www.canada.com/vancouve.....mp;k=59191
April 18th, 2008 at 2:32 pm
Where do you own now? Is it close to cafe’s?
Where should we buy our next places?
It’s obvious Vancouver can never go down! Just look how much it’s gone up. Plus if prices get any higher I’ll just rent out my suites for more money to a rich immigrant who wants to be where the action is!
April 18th, 2008 at 2:48 pm
Krrsh, on the other hand, may be an actual gen-u-ine died in the wool bark at the moon idiot. Jury’s out.
April 18th, 2008 at 2:55 pm
is it possible to have a renter pay my entire mortgage? I really want to make money and live in the action! Your help is appreciated!
April 18th, 2008 at 3:07 pm
April 18th, 2008 at 3:42 pm
“everyone who has been doing it has made a lot more money than you because of price appreciation.”
Yes, they have. At least in theory. However, drug dealers and bank robbers also make a lot more money than me. Why don’t I take up drug dealing or bank robbing you ask? Well a variety of reasons, I answer, but mostly because of one thing. Risk. What might this have to do with Real Estate you ask? Well let me answer that. How much money have you ‘made’ and how much money do you currently have tied up in Real Estate? What is your equity to mortgage ratio? If the market drops 50% will you lose everything you “gained”.
It’s pretty simple really. Any market that is guaranteed negative future returns is a fool’s market.
April 18th, 2008 at 4:37 pm
Heck, they even made a replica of False Creek in Dubai! Right down to the benches and lamp posts! That’s how world class it is! I don’t care what markets are crashing. If they haven’t made a replica of it in Dubai, it is not world-class exciting and deserves to go down.
My point is this: Downtown Vancouver is different, it is so great that if another city can afford to make a replica of it, they will! You can’t say that about any other place on earth. But you can say that about Vancouver. This is place will never crash.
April 18th, 2008 at 4:40 pm
http://www.bcbusinessmagazine......reek-dubai
April 18th, 2008 at 4:41 pm
April 18th, 2008 at 5:31 pm
Just some interesting posts:
From http://tinyurl.com/3mckta (look at post #28 onwards)
“If you attended the SeaTrade Convention in Miami this year, like I did, you would have heard 2 very strong messages:
1. The rapidly escalating price of fuel is wiping out our profits.
2. The rapidly escalating number of middle American passengers who cannot pay their onboard charges at the end of the cruise is causing a crisis for us.”
From http://tinyurl.com/4zesze
“One solution to the cost of food/gas/ etc? Drill oil wells in Anwar [ANWR] and build refineries in the US. We are not going to organic cars tomorrow, so write your Congressman, if they are not owned by the anti-oil lobbies, it might work.”
“As of right now, there is no recession (not opinion … fact). The definition of recession is: 3 quarters of negative growth in a row. This is another example of the media redefining things. The economy is in a slowdown … that’s for sure. The mortgage ‘crisis’ was brought on by irresponsible people who elected to finance their mortgage with an ARM (Adjustable Rate Mortgage) and financial institutions making high risk loans. Stupid! As much as I hate government regulation, it might be wise for them to step into this mess. Unemployment is still around 5% … not too bad”
****sorry for the long post***
April 18th, 2008 at 5:46 pm
peace up vancouver
Yeah! (yeah!!)
Yeah!
Okay! (okay!!)
Okay
Wait
Yeah (yeah) yeah (yeah) yeah (yeah) - yeah!
http://www.youtube.com/watch?v=NiXbRBS5Z58
wow!just wow!!
vancouver b.c. the yeah!yeah!!place on earth!!
wow!wow!!
April 18th, 2008 at 6:22 pm
However understandable does not mean excusable, they should still show some civility, and courtesy, but I guess it’s easy form me to say because my sense of self worth is not attached to some fleeting mirage, I am good looking, smart, and I have a large penis.
The bulls on the other hand…..
April 18th, 2008 at 6:28 pm
“Richard Lee spent 5.3 million pounds ($10 million) buying 20 rental homes across the U.K. with just 150,000 pounds of his own money. Today, the properties are worth about 60 percent less and owned by the banks that financed the purchases.”
http://www.bloomberg.com/apps/.....refer=home
There’s lots of Richard Lees in Vancouver. The local market is a dead man walking.
April 18th, 2008 at 6:54 pm
April 18th, 2008 at 7:16 pm
I won’t bait those dumbasses again, sorry for doing that. I earnestly thought if he was real he’d tell me what piece of shit he’d overpaid for and I’d get some insight into why someone would be stupid enough to subsidize someone ,who is not their family or friend, to the tune of $2000 per month.
My building is full of this, you can rent a $1 million unit for $2300, or if you’re a rookie landlord they ask $2,800 and get meth labs, hookers, and gangsters. Talk about a world class investment! Who wouldn’t want to be subsidizing a bunch of unethical or illegal businesses’
The hooker makes $1k a day and I get to pay half her living expenses? Awesome where do I sign up?
Yah Yeah Yeah Krish/Dosh?downtowner/Rob you’ve been punked and can pay the for the next 25 years
HAHHAHAHAHAHAHHAHAHHA
Chumps
April 18th, 2008 at 7:21 pm
It’s a oil city that’s set to run out of oil in 15 years.
Who has, or will, ever go there? 7 star hotel or not, no thank you.
I love traveling and have traveled through out most of the world but will never go to any of the unstable, exploitative, third world oil countries.
Until today I had a sliver of doubt that the troll was serious. Now I realize no one could really be that stupid.
This time I promise I won’t respond to that idiot again.
April 18th, 2008 at 7:45 pm
No surer sign that the market is in trouble. The angry bulls started popping up on HBB, CR, and Mish about a year or two ago. But they’ve gone away now. Guess their internet connections got cut off.
There are still some on Alberta Bubble and Seattle Bubble, as those markets are still early on into the bust.
April 18th, 2008 at 8:07 pm
Say thanks to your parents, atleast they own a house in kitsilano,how can some one bank on you? you did not even learn anything from your parents you life time tenent.keep on playing fossball and keep on paying rents hu.
$2300 to rent Million dollar home than 2300 to rent $2 million home,I think 25 year mortgage is worth more than paying a rent because a home can bring your all nickles back to you or to your family.
How much rent did you pay so far?I have heard that rents are not cyclical, see you after 25 year. good luck!
April 18th, 2008 at 8:10 pm
They have replicas of Paris and New York. They have world class museums,world class high rollers, world class hoookers and they have replica’s of Venice and it is a world class destination city. They even have Hawaii theme’d bars and a fake tropical beach?
Hmm, prices have dropped there too? But not only is it a world class place to visit, it has world class replicas!
Say it ain’t so!
April 18th, 2008 at 8:19 pm
April 18th, 2008 at 9:31 pm
Canada’s new export growth industry: greater fools.
April 18th, 2008 at 9:58 pm
April 19th, 2008 at 2:03 am
http://ca.yahoo.com/s/629728
April 19th, 2008 at 7:06 am
But,this is relationship advice:
(1)Buy now and get f’d by the high mortgage payments for 40 years
(2)Significant other wants to take a promotion in another town, but can’t sell because (a) selling price is lower than mortgage balance or (b) no one is buying because they’re patiently watching the inventory increase everyday (per PaulB’s stats)
And this is celebrity new:
All you need is one celebrity to say:
“vancouver, best place on earth? I wouldn’t buy in such an overpriced place….$1 million for that cozy, handyman special, former grow op or meth lab home.”
or some comedian like Jay Leno say:
“You think we have falling prices in Hollywood, check out that best place on earth called Hollywood North - Vancouver price is down x% and inventory is climbing everyday”
April 19th, 2008 at 7:55 am
April 19th, 2008 at 8:17 am
Yesterday, his realtor pulled up his stats and showed him 4 sellers for 1 buyer. Further, his stats showed 29 new listings with 16 resets (price reductions), and 7 sales
April 19th, 2008 at 8:19 am
April 19th, 2008 at 8:26 am
Sometimes rents go through the roof, sometimes through the floor … isn’t that cyclical?
Have you ever followed the rental market … here? elsewhere? Aren’t rents influenced by humungous oversupply? Or do we have a new krissh2-based paradigm at work here?
April 19th, 2008 at 8:31 am
I too am all cash/close to cash since beginning of July last year (including the $ from the sale of my house) … I’ve been in the investment business for close to twenty years living in Toronto/London/NY and now at the ripe old age of 42 in Vancouver. I have lived through and survived several crashes and manias. Two things that are absolute truths:
It’s NEVER different this time
and
It always lasts a lot longer and goes a lot further than you would ever expect
If this is the end (for now) of the RE boom (and it IS) then look out below.
As for alternative places to put your cash … keep it liquid and understand what you are purchasing (re ABCP’s). You may give up some short term returns but for now cash is king.
Relax, enjoy your summer … these are interesting times … The markets should present some good opportunities by the fall … in a couple of years RE will be getting interesting.
April 19th, 2008 at 8:35 am
No actually, nominal rents have not gone down at any time since the great depression in Vancouver. They have certainly increased faster at some times than others, but they don’t go up and down like RE prices, because they’re based on current demand, and people do have to live somewhere.
Annual growth of rents
Note how little rents have increased since 2001.
April 19th, 2008 at 9:22 am
;
;
Let’s not loose our heads; the market is just taking a breather before the next leg up.
The headlines referring to the end of the boom are premature.If the boom was truly over Bill Good, and Mark Forsyth, would have a panel of experts to warn the general public well ahead of time.
The panel would include independent, unbiased, analytical, and intellectual giants such as:
Chipman, Muir, Pastrick, Rennie, Don Campbell, heck let’s throw in Robyn of cmhc.
, and Aaron of chipman blog fame.
Which leads me to this suggestion for the Pope:
How about a section/tread on your blog to keep track on what the above “experts” have been forecasting and how it matches up with what happens in the market going forward.
Also is it appropriate for me to refer to the “Pope” or should It be prefaced with some kind of title such as … your kindness, you beautifulness or????
April 19th, 2008 at 10:18 am
Yes, downtown will always have a premium on Whalley and New West to name but two. However, I believe you don’t understand what premium means. If prices go down everywhere else, guess what happens to prices downtown?
As for Dubai, don’t think for a second Mohammed bin Rashid Al Maktoum isn’t aware of peak oil. They are positioning themselves for the post-oil era. We’ll see soon enough if they guessed right.
Finally, if you have some ‘play-money’ you’re willing to part with, huge returns await with put options (if you are true to your bearish convictions). My suggestion is to look south at the builders and the likes of Home Depot et al.
April 19th, 2008 at 10:49 am
.
.
“intellectual giants such as:
Muir, Pasterick, Don Campbell, heck let’s throw in Robyn of cmhc”
There’s some knob by the handle of (silverman) who tries to monopolize that (realestatetalks) site. He’s more obnoxious and irritating than Chipman….oh ya, he’s a realtor too.
April 19th, 2008 at 11:49 am
April 19th, 2008 at 1:05 pm
April 19th, 2008 at 1:16 pm
If the price run up was a response to true demand, and if true demand is now met, what will happen?
Will the industry continue to create a glut or will the overcapacity in the construction trades shift over to tourism janitorial services, used car sales?
And, of course, the question must be asked about the off shore buyers, where did they suddenly go?
April 19th, 2008 at 1:24 pm
“…once people begin to expect lower prices, it is very difficult to reverse a self-fulfilling downward spiral in the housing market.”
…me thinks a growing number of people are expecting lower prices.
April 19th, 2008 at 2:56 pm
Not me, you can have it. you do know they have cafes and restaurants even in bumhump iowa right? somehow I don’t think that’s going to be enough to convince everyone they need to pay through the nose for a tiny shoebox apartment conveniently close to a meth and heroin suppy.