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April 24th, 2008 at 7:51 pm
“A lot of medium to low income Chinese bought real estates in the last couple of years.When this housing bubble bursts,most of them will be in real hardship.”
You’ll see me in front of the Open Houses in Richmond soon with maps showing the way to the airport in yellow highlighting pen.
April 24th, 2008 at 7:48 pm
“We need to maximize the casualties of the bust. There’s nothing better than having hundreds of broke people with houses they can’t afford to keep.”
Burden of Proof
Bravo…..I agree. If any young yuppies are reading this I hope you buy RIGHT NOW! Know why? Because I hate Vancouver because per capita there are more assholes in this city than anywhere I know of, that’s why I moved here.
April 24th, 2008 at 6:03 pm
16) The Vancouver Sun has always aided the Re Pumpers right up to each previous crashes, because The Vancouver Sun makes millions on RE Ads; almost to the same extent, as CMHC and Bill Good.
True or False
April 24th, 2008 at 4:04 pm
Where is the ‘buyer fatigue’?
It looks like they’re either getting fatigued or moving away – sales have been consistently low so far this spring and wow are listings ever up! We’re close to 15k on the market, when was the last time that happened?
April 24th, 2008 at 3:53 pm
A, its LAGER not Larger, so I clearly have nothing against drunks, I just tend not to hand them buckets of gasoline around the campfire.
April 24th, 2008 at 3:26 pm
Richard
I know, I know!
1) False
False
2) False
3) True
4) True (obviously there’s always wiggle room but we will not see even 5% gains on the current level)
5) True (just not THIS spring)
6) Depends on the home
7) True
9) False (neither will appreciate in value in the foreseeable future)
10) True
11) True (but you can also lose money)
12) False (buying a home is NOT a good way to save money in the current market wherever in the Lower Mainland you buy)
13) False (in the current market)
14) Semantics, it depends on how you want to parse the words.
15) True (probably, depends on a few factors, but mostly true)
That was fun. I suspect some of their answers will be different from mine. I also STRONGLY suspect that in a year from now if we look back my answers will prove more accurate.
April 24th, 2008 at 2:58 pm
.
.
.
No ifs, ands, or buts, CMHC must be abolished or sold off to the Real Estate Board as a marketing machine.
Muir, or perhaps Good should be the CEO.
Also, Larger not Logger, please do not offend drunks, most of the ones I know, would never behave as irresponsibly as the CMHC fcuks.
April 24th, 2008 at 2:49 pm
the vancouver sun will have an article about real estate myths on saturday.
April 24th, 2008 at 1:57 pm
Hopefully, CMHC will be abolished because of it
Dare to dream! My fear is that CMHC will be given a mandate to ‘fix the problem’, basically giving the drunks with buckets of gasoline the job of putting out the fire.
Don’t you just love it when your tax dollars are put to work against your financial well-being and used to pump up speculative bubbles?
April 24th, 2008 at 1:16 pm
Sure, the government should regulate markets so they don’t get out of hand. However, right now it is clear thay they have failed to do that.
Given the current circumstance, a bloody slaughter fest in housing with young couples moving in with their parents, with headlines of “young peoples’ future stolen by the banks” is the best remedy.
A huge slaughterfest with billions in household “wealth” (it only existited on paper)destroyed and thousands of bankruptcies (basically just what is happinging in the USA) is the best scenario.
Hopefully, CMHC will be abolished because of it and houses will be cheap again – if you’ve saved enough you can buy two.
I can smell blood now and I like it! I like it so much that I want more!
April 24th, 2008 at 12:44 pm
“Burden of Proof”, I’m really starting to lean in your direction.
I’m just so tired of telling friends and co-workers that the current situation is ridiculous and that buying a place at the peak of a boom is financial suicide, only to have them come into work the next day beaming about the new place they bought. It drives me crazy that people who are so intelligent in most aspects of their lives will go and make such horrible life-altering financial choices. I find the worst part is that people will do more research about the breeder they got their dog from than they’ll do about the real estate market. They just happily follow the trends, get a 40 year mortage “knowing” the market only goes up, and build their own prison of debt. While these new homeowners (paying more than double what they borrowed back to the bank) are “adjusting their expectations”, the bears will be enjoying their disposable incomes; making real investments, experiencing life, etc….. In fact, I’ll be coming to terms with their new expectaions for a week on the beach in Mexico while me and my disposible income get to know each other.
April 24th, 2008 at 12:14 pm
I agree with Rock and the others. Part of the government’s job is to protect people from their own stupidity. Suicide is against the law, smoking and drinking are discouraged through taxes etc. With the CMHC in recent years it seems the Government has gone out if it’s way to encourage reckless behaviour I think our current government was hoping to keep the bubble afloat until they had a chance for another election because if the economy starts to suck on their watch nothing will stop people from going back to the guys who proved capable of shepherding the economy for 20 years.
April 24th, 2008 at 12:12 pm
“Read-on”
Yes, I agree. And it’s not always the greedy ones who are buying their 3rd property on a CMHC backed 100% loan, but also the young couples and others who are just afraid that if they don’t get in now, they never will, and have resigned themselves to believe that a 40-year mortgage is the new standard. All thanks to the CMHC. Just brutal. When this market drops 20% (and it will), they’ll just be in for so much more pain, it will ruin many of them.
April 24th, 2008 at 12:03 pm
“Sochi has mountains and water too!”
Are they running out of land?
April 24th, 2008 at 11:50 am
Rock – yes, people (as a group) are remarkably stupid, and opportunities for stupidity must be restricted as much as possible. After all, we no longer let the idiots smoke near us in a bar, but we still let (and encourage) them to send their futures up in smoke… someone’s been smoking, it seems…
April 24th, 2008 at 11:45 am
Comment by Burden of Proof
2008-04-24 10:17:22
BOP, nope, I blame the CMHC. People will only go so far as these institutions let them. IMHO that’s human nature.
April 24th, 2008 at 11:40 am
‘In short, I was rude and so were you.’
I was ranting and used too much assumption & generalization.
You were right.My shortcomings.Sorry.
April 24th, 2008 at 11:27 am
Forget Vancouver.
Sochi, Russia AKA the Russian Riviera is hosting the 2014 Olympics! Get out there and buy everything you can because once rich people here about Sochi the prices will quadruple in three years! Best Place on Earth!
Sochi has mountains and water too!
http://sochi2014.com/37398
April 24th, 2008 at 11:15 am
.
Lets hope we get the Maximum number of these poor saps in the market just as it teeters over the clif.
Whoa, Burden of Proof, you have a mean streak in you. Understandable, though. Vancouver bears have probably had enough of waiting around for the inevitable to happen.
Where is the ‘buyer fatigue’?
April 24th, 2008 at 10:53 am
I agree that the buyers are to blame, but it’s still completely irresponsible for the CMHC to introduce 40 year terms and zero down mortgages in the midst of a housing boom. I do agree with Rock that they hold some blame for this situation and should be held accountable.
The problem is now that they’ve done it how can they fix it? They can’t. If they were to remove these options the market would instantly crash hard and they would shoulder the blame. Instead they pumped the bubble up and now its just a matter of when it collapses. I wonder how many will lay blame at the CMHC’s feet when this thing turns bad? Not many is my bet, but if I hear anyone say ‘no one could have predicted this’ when the market crashes I’m going to scream.
April 24th, 2008 at 10:17 am
“These criminals at the CMHC should all be sent straight to prison for the lives that they’ve ruined.”
The blame lies with the buyers who have bought at the peak and voluntarily ruined their lives. They have only themselves to blame. They deserve what they get. They will cry for government assistance. I hope it never comes.
April 24th, 2008 at 9:16 am
“sacrificing size, location, and even long-term financial freedom”
Wow. Well at least that’s honest.
I’ll take long-term financial freedom, thanks.
April 24th, 2008 at 8:54 am
These criminals at the CMHC should all be sent straight to prison for the lives that they’ve ruined.
If they hadn’t sanctioned all of these “creative” loans and 40 year amortizations we wouldn’t be in this bloody mess.
This is going to be ugly, and I hope these bastards get their due.
April 24th, 2008 at 8:27 am
back to the “suspicious” house fire last night – it seemed to me that the fireman couldn’t even keep the suspicion out of his voice
I think the fire department is going to be kept very busy in the next couple of years
April 24th, 2008 at 7:20 am
copy & paste wrote “English is my second language.
Forget it.Don’t even try.”
You are ESL? OK but so what? You strike me as someone whose English as a second language is better than some whose English is their mother tongue.
So, being ESL you missed the “insightful” vs. “inciteful” pun as well. It was a compliment to you and an insult to myself. I share your views about people.
You were offended by “ignorance”? “Ignorance” means a person lacks a knowledge of the important facts. Most people think it means rude, uncouth and all sorts of bad things. It doesn’t mean stupid, sub-intelligent or anything like that. It has a simple meaning and was appropriate.
As for “mediocrity”, that was a jibe (sharp insult) both on you and myself. As for “assume”, that was also a jibe.
In short, I was rude and so were you.
April 24th, 2008 at 6:33 am
Copy, were you here in the 70′s as well?
April 24th, 2008 at 1:25 am
‘As for you, the corny joke about “what are the first three letters of ‘assume’?” certainly apply.’
English is my second language.
Forget it.Don’t even try.
April 24th, 2008 at 1:04 am
‘Sigh. Your ignorance is showing. Garth has been warning people for quite some time. Google him and the Victoria housing market. You’ll find this blog entry (his blog) from 2006,’
My apology,I didnt follow up.But ignorance?
‘Canada bleeds mediocrities. You’re Canadian?’
You mean you disagree?How can you?
Yes,I am Canadian.
‘Turns out you’re insightful after all, unlike myself who is generally merely inciteful.’
Your point?
April 24th, 2008 at 12:31 am
If you buy as a rental investment and have positive Cash-Flow as well as a rate of return that is greater then you interest rates, you will look for the highest possible amortization time possible in order to maximize the effects of leverage.
On the other hand if you buy to live in you will consider the lowest amortization time you can afford.
April 24th, 2008 at 12:09 am
Global TV news tonight had a story about a suspicious house fire in West Van. It was on the market for $1.6 million IIRC.
It begins…
April 23rd, 2008 at 11:48 pm
copy and paste, I agree with you about “This city make me puke! People just let the greedy, moronic & corruptive politicians run the whole show the way they want.
People are so indifferent,pretentious,shallow & stupid.”
Turns out you’re insightful after all, unlike myself who is generally merely inciteful.
April 23rd, 2008 at 11:45 pm
Canada bleeds mediocrities. You’re Canadian?
April 23rd, 2008 at 11:44 pm
copy and paste wrote that “Isn’t it too late for his book?Had he really has any vision he should be warning people 2,3 years ago”
Sigh. Your ignorance is showing. Garth has been warning people for quite some time. Google him and the Victoria housing market. You’ll find this blog entry (his blog) from 2006,
http://www.garth.ca/weblog/200.....-end-game/
But that was only 22 months ago and thus doesn’t fit your cutoff of 2 or 3 years ago. If only he had started two months earlier … he would have gained your respect. Still, I seem to recall that the market was only going up in those days and that he was a Prophet crying in the wilderness. Nobody listened. Now they’ll pay.
As for you, the corny joke about “what are the first three letters of ‘assume’?” certainly apply.
April 23rd, 2008 at 11:20 pm
Look what they do to No.3 Rd. in Richmond!
Like it used to look like West 10th or something? They can go ahead and densify the already urban areas of Richmond all they want – the more housing stock is built, the more downward pressure on prices. And that goes for Lougheed, Kingsway, King George, etc. too. Auto-oriented strips are a tremendous waste of land.
Look how our MP Garth Turner looks like a genius now.Isn’t it too late for his book?Had he really has any vision he should be warning people 2,3 years ago
Turner has been making bearish remarks on RE for some time, but obviously he waited until the jig was clearly up before he went full frontal. Turner is a very clever guy, by bringing out the book now he gets to look like a prophet with little downside risk.
And no, it’s not too late for any owner to get out of Vancouver, Toronto,or even Alberta RE (except for recent purchasers). For now.
April 23rd, 2008 at 11:03 pm
Anonymous,
Never mind look like a genius.I just want to better prepare for my retirement.
Look how our MP Garth Turner looks like a genius now.Isn’t it too late for his book?Had he really has any vision he should be warning people 2,3 years ago.A lot of the bloggers here know better.
Canada bleeds mediocrities.
Well,he is better than a lot of other politicians though.
April 23rd, 2008 at 10:15 pm
Copy – don’t worry, in a couple of years you will look like a genius to your friends and family when they owe more on their overpriced real estate than it’s worth.
April 23rd, 2008 at 9:40 pm
This city make me puke!
People just let the greedy,moronic & corruptive politicians run the whole show the way they want.
People are so indifferent,pretentious,shallow & stupid.
Look what they do to No.3 Rd. in Richmond!What a sinfull way of wasting our money.Now they get this skating rink thing going.
Oh,what a drunken party for those involved!
Almost half of the people in Richmond are Chininse immigrants,low skill & poor English,half of them dived into restuarant and grocery business.
Certainly,it is the greatest place for Chinese food in North America.Just look at the competitions.
But they make no money!
Yet Richmond city has the most Mercedes & BMW in the world per capita.What give?
Foolishness & vanity.
Home ownership is supposed to be a proud thing even its ridiculous overprice.
A lot of medium to low income Chinese bought real estates in the last couple of years.When this housing bubble bursts,most of them will be in real hardship.
Only possible saving grace for them is they may be able to tough it out better than most.Like work two low paying full time jobs,rent out the better part of their properties.My oldest sister had done that in the 70s.Poor soul never had a vacation outside of Vancouver in 40 years!What fortitude! For the sake of a home for the family.Now she is old and sick
Just ranting.
We sold our place a year and half ago.Sure look like an idiot among friends & relatives.
’cause real estates only go up!
April 23rd, 2008 at 7:12 pm
“Because it really does change the affordability equation,” Mr. Alexander said.
Well maybe not the way you think Mr. Alexander. Because they borrow demand from the future with interest – or to put it another way decrease the savings rate – longer mortgage terms actually decrease affordability long term. The 40 year mortgage slaves will have no equity to trade up from their condos 10 years from now.
So who’s going to be able to buy all those houses boomers will be selling? People with cash. But there won’t be many of them, which means we’re in for a long term slump in housing prices.
April 23rd, 2008 at 5:50 pm
When looking at a place last fall (was a good deal, but went for well over list), I had no trouble getting approved for a 40-year mortgage for well over 5x my annual salary with ~5% down.
The other funny thing is the guy at the bank just assumed I wanted a 40-year mortgage. When I explained I was more interested in 25-year (with 25% down no less!) he thought I was being retro!
April 23rd, 2008 at 4:42 pm
Check this out http://tinyurl.com/4toppl
Apparently the $1 house for auction trick doesn’t work in Toronto. Of course we’re different here. Hmmm.. I wonder how the $1 house auction here a few weeks ago ended.
April 23rd, 2008 at 4:31 pm
When any boom reaches the precipice like the local RE boom has done, all the money is to be made on the down side (holding cash to buy at the bottom).
What usually collapses the boom is the weight of the last people in. Consider this: as the article says buyers are now taking 40 mortagates with little or no money down, and they are sacrificing other consumption, location and long-term financial freedom as they pay interst to the bank for 30 years before getting to principal. After these guys are in the market who’s left? What else can one sacrifice? Nothing. This is the end.
Lets hope we get the Maximum number of these poor saps in the market just as it teeters over the clif.
April 23rd, 2008 at 4:20 pm
Burden of Proof, I’m tempted to follow your line of reasoning, but I would end up losing the few friends I have
April 23rd, 2008 at 4:18 pm
Burden of Proof, you’re evil
I do agree though, if people want to buy in at these levels I hope as many as possible do, but they certainly aren’t showing up in the numbers that they used to.
Quick is relative for a bust though since hosing isn’t as liquid as stocks. I think this market will be rolling downhill for a few years before it hits bottom. Lots of people will get buried by this thing before its over.
April 23rd, 2008 at 4:12 pm
What really makes me ill is that the government, and not private industry, is both encouraging and back-stopping (with taxpayer money) these 40-year amortization and interest-only mortgages.
Although I don’t agree with these options, I wouldn’t mind if private companies were willing to risk their own money to offer them.
April 23rd, 2008 at 3:59 pm
“Comment by Clarke
2008-04-23 15:38:18
Maybe I am old fashioned, but if you need to take out a loan with a forty year amortization, you really should not be buying.”
Nothing wrong with being old fashioned. I totally agree with your comment regarding those 40 year amortization.
But that’s okay. These guys will soon (if they have not already) find out that paying high monthly mortgage payments until their late 60s or 70s is not exactly a great way to life their lives.
Also, wonder if these guys ever calculated the extra interest costs they are paying over the life of the 40 year mortgage compared to the 25 year mortgage.
April 23rd, 2008 at 3:59 pm
I’m personally telling everyone who will listen that Bill Good and the Vancouver Sun and Bob Rennie say that Vancouver RE will not fall. A couple of people have bought.
I’m not telling them what I personally know about the the market history of Van RE. I just tell them what the pumpers say. This way, I entice them to buy and avoid lieing.
The people stretching themselves now to buy at the peak will be the most precarious part of the market when YOY price declines are reported. The more of them that there are, the more dramatic and tumultuous the bust will be from the start.
I want the bust to start with a bang. So lets all do our part and get as many people to buy now as we can. Sure, its selfish, but this is capitalism.
We need to maximize the casualties of the bust. There’s nothing better than having hundreds of broke people with houses they can’t afford to keep.
April 23rd, 2008 at 3:53 pm
It is great that new buyers are stretching themselves to get into the market. I expect that they will be stretched so far they will break. The more the better.
For every person that bought at the peak, there will be one more house on the market plus one less buyer with the wherewithall to finance a purchase when the bust hits full steam.
This is why busts are so much faster and violent than the boom. As people loose their homes, you add one unit of supply and simultaneously take away one unit of demand.
April 23rd, 2008 at 3:38 pm
Maybe I am old fashioned, but if you need to take out a loan with a forty year amortization, you really should not be buying.
April 23rd, 2008 at 3:37 pm
Great when markets going up but ask the banks and hedge funds how it works out when asset prices fall … They all lobbied for mark to market b/c it allowed them to leverage up and that is what has brought our financial system to its knees today … Hard to get accurate pricing when the paper they hold goes no bid … why do think the central banks are becoming the lenders of last resort and swapping $ for “no bid” paper …
We have had business cycles in RE before but these forty year mortgages and no/very little money down are just adding gasoline and dynamite to it …
April 23rd, 2008 at 3:26 pm
I was walking my dog in David Lamb park in Yaletown, and over heard some fellow downtowners chit-chatting about your blog. Congrats! You are semi-famous