Lereah: It’s going to get worse.
Looks like a couple of years can really change a guy. According to this article in Newsweek David Lereah, the former chief forecaster for the National Association of Realtors now says the US housing market is nowhere near the bottom. This is the same guy that published a book in 2005 (awkwardly close to the peak of the US market) titled “Why the Real Estate Boom Will Not Bust – And How You Can Profit From It“. Around the same time he gave a housing presentation where he called anyone who thought homes were overvalued and in danger of correcting ‘Chicken Littles‘. Lereah gathered quite a bit of notoriety online for his steady flow of rosy forecasts as the housing market crumbled around him.
RSS 2.0 comments feed. Both comments and pings are currently closed.It’s been more than a year since Lereah left NAR, so I called this week to check in. It turns out he has recently set up a new firm called Reecon Advisors, which is advising Wall street firms and institutional investors about the real estate market. “Wall Street has an intense interest in [this], because they’re looking for when is the recovery going to come, and at what point does the cycle turn,” Lereah told me.
His answer: not yet. “We’re not at the bottom,” he says. “[People] want it to be near the bottom, but we’re not there yet. The leading indicators are still very bad. Pending home sales are still in bad shape. Mortgage applications are low … There’s still supply out there in abundance … This thing is going to get worse before it gets better.”
Lereah says that the industry may begin to see a slight uptick in sales later this summer, which could signal the start of the recovery. Home prices, however, will continue to fall. According to the latest numbers from the Case-Shiller index, the average U.S. home has lost around 15 percent of its value since the market’s peak. “We’re probably going to end up with a 20 percent [decline], but if I’m wrong it will be even more than that,” he says.
May 6th, 2008 at 10:22 am
Folks, I gotta tell ya…new house sales have hit the wall. They have stopped selling completely, and spec builders are in deep dung.
High end SFHs in Van west and on the north shore have also come to an abrupt stop.
If awareness of this general resistance spreads, there is a chance that GVRB inventory could reach 18.000 by the end of May, and that would be enough to set off the biggest crash we have ever seen.
May 6th, 2008 at 10:36 am
Hombre, where do you get that information?
May 6th, 2008 at 10:56 am
THE SKY IS FALLING!!!
THE SKY IS FALLING!!!
May 6th, 2008 at 10:58 am
So if his endless-bull call marked the top, wouldn’t that suggest his endless-bear call is marking the bottom?
May 6th, 2008 at 11:03 am
Anonymous, the sky is not falling, that’s impossible, Vancouver RE prices are falling, and soon they’ll be plummeting.
May 6th, 2008 at 11:06 am
Can’t wait to see all these overpriced condo owners on the street when their precious properties aren’t worth 1/2 of what they are now. The rest of us will be LAUGHING our asses off while we do you all a favor by buying your condos at 1/2 price. LOL!!!
Let the foreclosures begin! The Vancouver condo market is fucked and is about to collapse, exactly what we’ve all been hoping will happen for years!
May 6th, 2008 at 11:11 am
When the bullish NAR was writing his cheques, there was no top. Now that a worried wall street is writing his cheques, he’ll probably never call the bottom (if the market turns wall street won’t be quite so worried).
May 6th, 2008 at 11:15 am
So if his endless-bull call marked the top, wouldn’t that suggest his endless-bear call is marking the bottom?
It didn’t mark the top – it marked his entire tenure at NAR. Lereah was being paid to bamboozle the public and that’s what he did.
Now that he is working as a consultant for the financial industry he is giving them the straight goods because, again, that is what he is being paid to do.
Sort of reminds me of the USSR when they had two kinds of publications – the mass media like Pravda which were just propaganda, and objective news reporting which was limited in its distribution to the party brass.
May 6th, 2008 at 11:32 am
Once a treacherous cretin, always a treacherous cretin. What he’s saying now may be more in line with what the local bears believe (myself included), but I suspect what he’s saying has more to do with who’s signing the cheques than anything else. Any apparent objectivity is purely coincidental; he’s simply changed troughs.
May 6th, 2008 at 11:37 am
Hey ‘sky is falling’, don’t worry – when housing markets crash people find new things to bet on. I’m listing to news radio out of Rhode Island and just heard a report on the slump there. Sales of houses and condos is way down and prices are dropping as well. The local government is suffering from reduced sales tax revenue as people spend less, but not to worry, ‘gaming’ (gambling and lotto) income is way up this year!
May 6th, 2008 at 11:42 am
Let me get this straight.. Wall street is looking to the guy who predicted that the housing market will not fall for his predictions on when the housing market will stop falling?!?
May 6th, 2008 at 11:49 am
Sorry for being a little off topic with this post however I am interested in the groups opinion:
Most days while I eat my lunch, I update a spreadsheet from the public MLS sites for what’s listed in my “area of concern” Coal Harbour and False Creek North. I’ve uploaded the spreadsheet to the link below and am interested in anybodies thoughts on what they see:
http://www3.telus.net/YLTNBoom.....0North.xls
The sheets reasonably self explanatory, I highlight price increases in red and decreases in green (I’m a bit of a bear hence the colour reversal). When a listing disapears I gray it out as too many times it pops up again and doesn’t really represent a sale. I’ve also included notes for when the MLS number changes as well as some basic calcs.
Thoughts?
May 6th, 2008 at 12:08 pm
and Lereah has what to do with Vancouver exactly?
It is a fact that Canada is different from the US, and it is a fact that Vancouver is different than the ROC. As such that makes Vancouver doubly different, and RE here, as it is a unique place to anywhere else in the world, is special.
May 6th, 2008 at 12:13 pm
Now that he is working as a consultant for the financial industry…
Let me get this straight – the NAR “bamboozles” the public but the financial industry does not…?!?!
Come on now….
May 6th, 2008 at 12:30 pm
Lereah has what to do with Vancouver exactly? It is a fact that Canada is different from the US, and it is a fact that Vancouver is different than the ROC.
Is that a double negative?
I’m guessing you’d file this story under ‘reasons not to listen to the predictions of salesmen’. Funny how every crashed US housing market had ‘its different here’ as a reason that the bust wouldn’t come.
May 6th, 2008 at 12:30 pm
VanLoverBoy,
While I agree we have characteristics that are different than ROC, the entire country has had three factors in common: super-low interest rates (likely in process of reversing), 40 mortgages (impact probably still “positive”), and CMHC (impact positive).
To what degree each is responsible for current local RE prices I don’t know, but would imagine interest rates take the cake.
Since it is not too wild of an assumption to say that Vancouver RE has had the benefit of hot money (unlike like places such as Ottawa), we may well end up paying a price just like Miami and LA once interest rates rise or sentiment falls. Time will tell.
May 6th, 2008 at 12:44 pm
The problem that Miami and LA have that Vancouver doesn’t is that they’re American cities.
Economist picked Vancouver no.1 place to live in the world again!!!
May 6th, 2008 at 12:47 pm
hmmm – guess Krrish decided to change personas to vanloverboy
May 6th, 2008 at 12:58 pm
The problem that Miami and LA have that Vancouver doesn’t is that they’re American cities.
Problem is that all three are coastal cities that have had lots of real estate speculation.
Also, I see in the Economist we just edged out Melbourne. There are some interesting charts on Aussie housing these days.
May 6th, 2008 at 1:10 pm
Why do you all insist in continuing to argue by comparing Vancouver to other cities which are not Vancouver. That just reaffirms that Vancouver is different, and unique, and unlike those other coastal cities, and all other cities, everyone wants to liver here.
May 6th, 2008 at 1:23 pm
What’s so unique about Vancouver? P*sses rain half the year there, traffic sucks, and has all kinds of issues. And I can *guarantee* you that not everyone wants to live there.
May 6th, 2008 at 1:25 pm
Just a question for Bizznitch, where do you live?
May 6th, 2008 at 1:28 pm
If you don’t like the rain buy an umbrella, it’s a lot cheaper then running a sprinker in Phoenix.
May 6th, 2008 at 1:29 pm
Why do you all insist in continuing to argue by comparing Vancouver to other cities which are not Vancouver. That just reaffirms that Vancouver is different, and unique, and unlike those other coastal cities, and all other cities, everyone wants to liver here. – - – - – - – - – - – - – – - – - – – - – – -
Interesting how krrish digresses to far better sentence structure, grammar and spelling when he/she/it is in a rush to post. Perhaps he/she/it forgot to run it through the idiot filter. We’re not fooled, troll.
May 6th, 2008 at 1:29 pm
Vanloverboy is obviously being facetious
May 6th, 2008 at 1:41 pm
VanLoveBoy
Why do you insist on living in a geographical vacuum? What exactly is it that you believe to be so different about Vancouver that is pertinent to real estate. Please don’t tell us about running out of land, the Olympics or everyone wants to live here – if that were true, our population growth would reflect it, but at an anemic 1 to 1/2% per annum, it doesn’t.
May 6th, 2008 at 1:52 pm
Lets see 1% growth = roughly 6K a year for Vancouver proper that seems right on the nose. Hmmm pretty sure that’s right around the level of housing being built. Assuming 2 people per household which is also right on the nose.
If Vancouver grew faster then that where would we put them? Guess we’d have to build more condos.
May 6th, 2008 at 2:02 pm
Make sure you pick up his other classics such as “The Rules for Growing Rich: Making Money in the New Information Economy”, published June 2000.
May 6th, 2008 at 2:06 pm
1>0
You’re interested in local RE math. Here are some more figures for you. 50% of DT/FC condos are already owned by investors. Many are empty, ergo, BC Hydro’s estimate that there are over 18,000 unoccupied housing units in the Lower Mainland. That’s more than enough to house one year’s worth of population growth. But wait, there’s more. While all this is going in the Lower Mainland an all time record number of units are under construction – something over 27,000 at last count. Guess somebody found some land after all. So yes, by all means, let’s build more condos still. Our population is bound to double after the Olympics so we’ll need every last one of them.
May 6th, 2008 at 2:13 pm
Maybe you can post a link to where those 18K empty condos are, I’m sure you already know that was a misquote by none other then Dave Cadman a COV councillor with a anti density agenda.
Maybe you could also post a link showing where those 27K units under construction are, as I’m sure they are region wide. Lets see thats 27K unit’s enough to house 55K people, most units take 2-3 to complete, so we’re looking at enough new supply to house 55K over the next 3 years region wide. Pretty sure that’s less the pop growth again. Try harder.
May 6th, 2008 at 2:30 pm
1>0
You’re so right, I’m going to race out and buy another condo downtown, it’s obvious all the rich people in the world are lining up to move here so if I don’t hurry up I’ll never be able to get in at these prices!
I’m going to buy ten!
Luckily I earn millions of dollars a year or I’d be unable to subsidize each unit to the tune of $2,000 per month and since rich people would rather spend $800,000 for a one bedroom that they plan to leave vacant 50 weeks of the year instead of staying in a hotel it’s clear prices will never go down! It’s different here! We have cafe’s!
Any city with cafe’s is guaranteed to go up forever
and the Olympics! Just like Salt lake City, Turin, China and Sochi! Plus there are warehouse jobs here that have regular pay increases! No other Olympic city has cafes AND warehouse jobs!
Global Recession won’t affect us, we’ve de coupled. You know just like technology stocks de coupled from the economy in the late 90′s! And Miami de coupled from the rest of the real estate market.
I bought a condo last year in Miami and sold it to a rich immigrant for double what I paid! it’s easy and you should be buying too! Tom Vu would be proud!
I’m glad you made it so clear! I need to run out and buy now!
In school they taught us that we needed 3% population growth just to sustain our economy but now I realize Vancouver is different. It’s different here!
Where should I go buy?
Reply quickly, I’ve got to get out there right now and start investing!
L.A. had the4 Olympics in 1984 and now house prices average $32 million and will go up for decades, wages have tripled in L.A. this year!
p.s. Does anyone remember where the 1998 Olympics were?
May 6th, 2008 at 2:31 pm
Not in Vancouver…..by choice.
May 6th, 2008 at 2:35 pm
1>0: What makes it our job to try and convince you of anything?
Please, if you think the market’s going up…go out and buy more units/SFHs. I don’t want any fools like you to have free cash when I decide to buy.
May 6th, 2008 at 2:37 pm
If most of you hate Vancouver, as you seem to allude to by all the negative comments posted here, then why don’t you move somewhere else instead of constantly bitching and wishing ill on the entire city?
Some of you also keep comparing Vancouver to other US cities, and then contradict yourselves by saying Vancouver has nothing to offer that those other cities do.
This blog is just as biased as the many publications you all claim are biased. Which means none of you have any credibility and no one will take anything this blog says seriously.
May 6th, 2008 at 2:44 pm
.
.
.
jj asked:
“where do you get that information?”
All you have to do is look around to know that new houses are’nt sellig. If you can find a new quality house outside of some east Van slum or deepest darkest Surrey that sold in the last 2 months without the builder taking a loss, I’l eat my hat.
As for high-end SFHs in Van west or on the north shore not selling, if you have’nt noticed all the “price reduced” adds screaming for attention, you may want to look at the GVRB stats.
You blind or WTF?
May 6th, 2008 at 2:45 pm
I don’t get it. Why is a reduction in the price of housing a bad thing? It’s not negative. Most of the comments from the bears are positive. If fact, the bulls are the negative ones. Isn’t having affordable housing positive? Isn’t owing less to the bank positive. Isn’t higher interest rate positive? Wouldn’t you want to be a saver rather than a borrower?
May 6th, 2008 at 2:48 pm
“This thing is going to get worse before it gets better.””
I’m starting to wonder if prices haven’t bottomed and will go up from now on with comments like that. Maybe he’s resorted to reverse psychology; it worked like a charm when he was with NAR.
May 6th, 2008 at 2:51 pm
If most of you hate Vancouver
You seem to be mistaking the opinion that speculation has driven prices beyond what they are worth for ‘hating’ this city. It’s really not that complicated, its possible to ‘love’ this city without ‘loving’ the effects of speculative and credit market excess on local families and our long-term financial health.
May 6th, 2008 at 2:53 pm
I don’t hate Vancouver. I’m just saying don’t buy at the peak. the basic law of supply and demand and basic psychology indicate that they’ll be thousands of $$$ units on the market and no buyers and this will lead to negative sentiment about the market which will compound the problem further. Consumers are like lemmings. This happened in Vancouver ten years ago but no one remembers. The Asian Flu and the Leaky Condo Crisis hit and the same people who lined up to buy lined up to walk away from their units.
If the buyers really are “immigrant investors” then they don’t consider this a great place to live they just want to make a quick profit. Once these people run for the exit it will create a collapse. It’s sad that otherwise intelligent people are taking on subprime, er, 40 year mortgages now to have the privilege of paying 2-3 times as much as it would cost to rent the same property.
What’s the rush?
Does anyone really thing that more independently wealthy people will arrive? Where are these independantly wealthy people coming from? Why are they only coming to Vancouver now? Why aren’t they going to Miami?
Hawaii is really nice and prices fell there, they have limited land, a nice climate and if employment isn’t an issue then what’s keeping these rich people from going there? Or the Phillipines?
Why does anyone thing buying at the peak of a market makes any sense?
May 6th, 2008 at 3:01 pm
It’s now an emotion-driven market where people are buying on the expectation of future appreciation.” Increasingly Vancouverites view houses not primarily as places to live but as foolproof, can’t-lose investments. The passionate faith that money poured into real estate will magically multiply is creating a self-fulfilling speculative frenzy that’s bound to end badly.
It’s momentum investing, not that suddenly far more people are entering the workforce or moving across the country to higher-paying jobs
When will the day of reckoning arrive? That’s impossible to know. As we’ve seen in the past, bubbles can keep expanding far beyond what sensible observers see as the breaking point. But recent history has taught us something else as well: A market driven by irrational exuberance will eventually come back to earth. The most likely trigger would be a sustained rise in interest rates, coupled with continued increases in a burden on housing that the experts mostly ignore: soaring property taxes. That would help to deflate the rampant euphoria that’s driving the market. After years of being ignored, the fundamentals will reassert their control.
The end of the boom won’t look like a stock market crash, but it could still get pretty ugly. At best you’d have several years of flat or slightly falling prices in the hot markets. But if the economy slowed as well, the damage could be much worse , you may be better off going where the true bargains are, into a rental. And if you’re looking to invest in houses for a quick killing, forget it: This is no time to gamble on the real estate market.
May 6th, 2008 at 3:04 pm
Wow! Nice to see some contrary opinions here even if they are a bit raving and odd. Are you guys freaked out speculators? Real estate agents with time on your hands? Or perhaps you’ve just lost your job and are freaked out about the mortgage.
We’ve just laid off 6 people and cut another four back to half-time to try to get through the drop off of US customers in our office, so if thats whats going on you have my sympathy.
It looks like the market really is changing if we’re starting to see more virulent bullish comments on the local blogs.
May 6th, 2008 at 3:04 pm
“Lets see thats 27K unit’s enough to house 55K people, most units take 2-3 to complete, so we’re looking at enough new supply to house 55K over the next 3 years region wide. Pretty sure that’s less the pop growth again.”
I wonder where all the immigrants who arrived 8 years ago lived when annual housing completions were half of what they are now. Wages and rents aren’t growing. You can build as little or as much as you want but you can’t force someone into a house they can’t afford. And given the growth in construction jobs, if the units under construction drops back to the long term average, or worse close to the lows of early this decade, that’s a fair number of jobs and (mortgage payments) that go up in smoke.
May 6th, 2008 at 3:07 pm
BC construction permits down but we’re still building them condos.
So the non residential projects are going down somewhat? I did hear on the news a while ago after the olympic mega projects are done there are still some projects in the pipeline. One mentioned was site-c (whatever that is). If approved, it’s a $6b project, to employ 2,000 over 7 years. Still sounds tiny to me though. I mean, 2,000 employed compared to the tens of thousands now, right? And that’s supposed to be the big project. Other smaller projects mentioned were bc hydro projects, costing $2B.
May 6th, 2008 at 3:10 pm
If most of you hate Vancouver, as you seem to allude to by all the negative comments posted here, then why don’t you move somewhere else instead of constantly bitching and wishing ill on the entire city?
General format:
If you/they/he/she/it hate(s) _____ so much, why don’t you/they/he/she/it just leave.
This is the general format of a comment often heard in bars (from people who drink too much) or heard in movies coming from a scene portraying people (often bigots) of limited intelligence.
Whenever people utter it, they think they are so original, like nobody has ever heard their incredible wit before.
Sigh.
May 6th, 2008 at 3:13 pm
Google: House Bubble “Running Out of Land”
Vancouver’s obviously not unique when it comes to running out of land. I’m actually shocked, it’s not even on the first page of results! Seattle, Australia, Florida, California… a few of the results that at some point ran out of land.
Google: House Bubble “Everyone wants to live here”
Not unique here either. Also shocked that Vancouver isn’t on the front page. Everyone wants to live in Sonoma County, Marin County, California, blah blah blah…
These terms must be trademarked by Realtors.
May 6th, 2008 at 3:15 pm
This blog is just as biased as the many publications you all claim are biased. Which means none of you have any credibility and no one will take anything this blog says seriously.
Regarding “bias”, OK maybe/probably.
Regarding “none of you have any credibility”, be wary of phrases like “none” and “all”.
Regarding “no one will take anything….”, be wary of phrases like “no one” and “everyone”.
You have pretty much defined yourself by your comments and I for one am not impressed. And I’m not that smart! So just think of what the smart people think of you.
May 6th, 2008 at 3:19 pm
richard, “Site C” is in the Peace. Not so much an effect on Lower Mainland employment… I’d start buying Ft. St. John properties now before it’s too late
May 6th, 2008 at 3:25 pm
I was planning to buy 10 condos myself. Buy high sell low! That’s the way we do things around here like in the 80s and 90s. One purpose of this blog is to help people make good financial decisions.
Like bdk said, what’s the rush? Why not just wait three months to see where the market is going. It can be a touching subject for some because nobody wants to see their investment tank.
May 6th, 2008 at 3:30 pm
“This blog is just as biased as the many publications you all claim are biased. Which means none of you have any credibility and no one will take anything this blog says seriously.”
The publications rarely have open debate on a subject. They quote “experts” who don’t have to worry too much about being called out on factual and logical reasoning errors unlike posters and commenters on blogs. Don’t get me wrong, there’s a lot of crap on blogs but rummaging around enough you find some pretty insightful sh*t that will blow your freaking miiiind, man.
May 6th, 2008 at 4:01 pm
After 2010 there will not only be site C but Gateway, Evergreen, M-Line Extension, new St. Pauls, Childrens Hosipital, East Fraser lands, new bc place roof etc etc. the Projects never stop, they only change.
May 6th, 2008 at 4:04 pm
Omg, if you people keep waiting you won’t be able to afford anything in Vancouver, the same way you can’t afford a condo right now in red hot Downtown. Prices keep going up. This is Canada and the USA.
May 6th, 2008 at 4:15 pm
“If you don’t like the rain buy an umbrella, it’s a lot cheaper then running a sprinker in Phoenix.”
So, you’re willing to pay twice as much to live in Vancouver (compared to Phoenix), just so you don’t have to water your lawn?
May 6th, 2008 at 4:16 pm
Lots of people can ‘afford’ a condo downtown, but who wants to pay speculator prices for a depreciating concrete box when they can only get half the carrying cost in market rent?
May 6th, 2008 at 4:17 pm
How many vancouver condos have lawns anyways?
May 6th, 2008 at 4:23 pm
Site C will become a $16 billion project after all the cost overruns.
May 6th, 2008 at 4:49 pm
Omg, if you people keep waiting you won’t be able to afford anything in Vancouver, the same way you can’t afford a condo right now in red hot Downtown.
well and truly priced out, why bother trying to get in now?
May 6th, 2008 at 4:54 pm
They quote “experts” who don’t have to worry too much about being called out on factual and logical reasoning errors…
And that’s different in exactly which way from THIS blog quoting a sympathetic statement from (of all people) Learah?
The one thing this blog shows in spades is that bears are just as likely as bulls to drink their own koolaid.
May 6th, 2008 at 5:18 pm
I love Vancouver. I was born here. I grew up here. I have a sentimental attachment to this place. Of course, I can’t afford a house but I’m saving cash every month. I rent a nice little condo close to work. It’s at least half the cost of owning. I have a pension building at my work. A rare thing these days and the reason I don’t move. I have rrsp’s, bonds, and mutual funds. I live cheaply but happily and relatively stress free. At current prices I absolutely will not buy real estate. It’s seems to me a very risky investment. (I read somewhere that the best thing you can do to get ahead in life is to pay as little interest as possible. Get them to pay YOU interest.) I’ve been reading these blogs for years (This one, Vhb, Victoria, (Un)realestate, Rob etc.) and I have got to tell you, the indicators the bears have been predicting for so long are coming true. Indicators like inflation, absense of FTBs and sharply increasing inventory. I just wanted to say thanks for the advise from all of you. Thanks for running these blogs and thanks for the intelligent posts. Except krrish.
May 6th, 2008 at 5:23 pm
Sorry. My handle is not boogabooga. I put my email in the wrong spot. Boogabooga sounds stupid and I am a little embarassed. It is fake anyway.
P.S. Does anyone know how to stop a keyboard from making these things – ÉÈèèèàÉ
May 6th, 2008 at 5:40 pm
Rob A:
“After 2010 there will not only be site C but Gateway, Evergreen, M-Line Extension, new St. Pauls, Childrens Hosipital, East Fraser lands, new bc place roof etc etc. the Projects never stop, they only change.”
big government spending now = BIG BIG TROUBLE LATER
ECON 099 (langara college remedial class)
May 6th, 2008 at 5:43 pm
The one thing this blog shows in spades is that bears are just as likely as bulls to drink their own koolaid.
Like the US-wide RE crash, Spanish RE crash, Irish RE crash, just starting UK RE crash, year old Alberta RE crash, are some sort of delusion?
Now just what do all these places have in common? That it costs way more to buy a house than rent the same place, just maybe?
If the bears are still bearish when it’s cheaper to buy than rent in Vancouver, then they will be drinking their own koolaid. Speaking for myself I won’t be.
Like all ideologues, the RE permabulls accuse their opponents of being advocates of the opposing ideology, instead of recognizing that they are simply being rational.
May 6th, 2008 at 6:34 pm
“Like all ideologues, the RE permabulls accuse their opponents of being advocates of the opposing ideology, instead of recognizing that they are simply being rational.”
That’s a typical response from a permabear. Rational, indeed.
May 6th, 2008 at 6:59 pm
ECON 099 (langara college remedial class) = Student loan
Student loan = no condo
no condo = bear
bear = hungry
hungry = complaining
May 6th, 2008 at 7:20 pm
this is a decent thread, a mix of arguments in support of bullish and bearish prediction. demand is not going to drop off a cliff. canada will see increasing immigration, and for the majority of immigrants vancouver is their first choice. there is a limit in their mobility for seeking out cheaper backwaters like saskatoon and winnipeg. demand is less elastic than places like miami and san diego. although our mortgage market is less prudent than it used to be we don’t have jumbo mtg. and subprime issues to the same degree as other jurisdictions. nonetheless the fundamentals are bearish. in the short term i can see some demand/supply issues. like oil though, when demand exceeds supply for a product as far as can be projected, you have a problem! i’m not a realtor or real estate investor (currently), so i don’t want any half wits accusing me of such!
May 6th, 2008 at 7:38 pm
That’s a typical response from a permabear. Rational, indeed.
I bought in the 80′s, bozo.
See what I mean?
The “angry bulls on bear blogs” index seems to be rising daily. It proved to be an excellent leading indicator of the US bust.
May 6th, 2008 at 7:39 pm
booga booga summed me up as well but without the pension. I think you have to work in government these days to get a pension, and I couldn’t do 35years of government work.
But otherwise, he summed up alot of us well I thought.
May 6th, 2008 at 7:40 pm
Happy in Van,
Sure say thanks to vhb and all the side kicks to keep you out of market, say thanks to them and tell them that the money you have stored in the bonds or stocks can not buy you a place to live in your own city.
Say thanks to them-many many thanks that you can not even buy chicken shack while other people who bought at the same time when you did not buy are millionaire now, those people have paid off more than 30% of their mortgage and they have earned 121% appreciation.
say thank you all, tell them the story of affordability erroded and your nights and days have become same even in the dark, go tell them.
Tell them if they ever have to predict a crash again just install 10 feet long piller on the edge of Spanish Bank and English Way and write the prediction story like this
” if the water waves ever over ride the top of the pillers then Vancouver Real estate market will crash big time”
that way if crash does not show up for next 100 centuaries they will be right because the sign is water level must cross above the piller.
Say thanks to them I say thanks to you all thanks every one vancouver rocks.
May 6th, 2008 at 7:44 pm
Thank you
May 6th, 2008 at 7:53 pm
Nothing more interesting than blogging, which gives the deranged equal say with those of us who are sane. I wonder what outlet persons like the 19:40:10 anonymous had before blogs. Maybe Graffiti?
May 6th, 2008 at 7:53 pm
“ECON 099 (langara college remedial class)”
What’s “langara”? I couldn’t find it in the dictionary.
May 6th, 2008 at 7:57 pm
Stagnate,
You don’t think demand will fall off of a cliff when prices turn? Are you one of those people who believes that demand isn’t related to price? Maybe everyone wanted to live here at $160K house price, but at $800K; I suspect not. The government determines how much immigration we get, not these magic people who want to move here. Vancouver is not the first choice of immigrants; toronto is! Why is demand less elastic than Miami? You think that families making 60K buying 600K houses isn’t subprime?
Are you a real estate investor or a realtor???
May 6th, 2008 at 7:59 pm
langara community college
where satv picked up his
“RE investing for %$*#$ idiots”
course
May 6th, 2008 at 8:04 pm
Happy in Van, Hey I found an alley that is up for grabs cheap! Guy is leaving for better places, and is willing to negotiate. Will take $100.00 for exclusive turf give it a try SATV! Nope sorry he won’t take title to your property, this guy wants equity!
May 6th, 2008 at 8:10 pm
Sounds like you did not see over 3200 buyers yestreday that’s why you have rebound your self here for more rant,do you like to see some more?“RE investing for %$*#$ idiots”
“course”
What happend some one brought you back in to your sense again?
May 6th, 2008 at 8:22 pm
do do:
i anticipate demand will stay quite constant, i live in the kits area where there are oodles of young couples renting, waiting for the conditions to improve a bit so they can buy something. tremendous pressure on the rental market, there is no shortage of potential buyers out there. i believe it is affordability not demand that is a more pertinent issue. toronto was surpassed as the first choice of immigrants about twenty years ago. vancouver is the most desireable place for immigrants in canada, miami had too much competition for potential new demand. as soon as the fundamentals turned in miami the demand dried up (essentially people moved elsewhere). vancouver is less elastic. for a wholesale collapse of the market here i think we need to see significant changes in the macroeconomic picture (a collapse in the bond market maybe?).
May 6th, 2008 at 8:32 pm
There is no way Satv/Krissh/time/anonymous would pass the LPI to get into Langara College.
This is a guy who writes incoherent rants and then thanks himself and thinks homeless people make good babysitters.
There is no way anyone could be as dumb as he pretends to be but he is clearly the dumbest person on this blog.
May 6th, 2008 at 8:47 pm
BDK,
Do you live in world class city?Would you like to name the city you live in?Are you American citizen by the way?what is the difference between CDN,$ and USA $?.What is the difference between postal code and zip code?Do you live in coalharbour, vancouver, new york, USA?.
Where else do you lurk to post your comments?is it a news paper called “the vancouver sun”?what were you trying to post there?
May 6th, 2008 at 8:54 pm
BC population 2010 – BC population 2008 = X
housing needs for 2010 = (x/2)
BC houses 2010 < BC houses 2008 + (x/2)
Supply >rents2008.
May 6th, 2008 at 8:55 pm
Stagnate,
There has been record numbers of FTB entering the market the last few years and the homeownership percentage is at record levels. I am not sure you can argue for all this pent up demand. I think maybe you are forgetting about the speculators? Also, these couples waiting on the sidelines; they are waiting for a 2% price drop? The market will need to get slaughtered to bring these people into the market.
Affordability is indeed an issue, but if we have a record number of homeowners, and there are all these people waiting; who has bought all the houses? Maybe you notice these young couples renting because they are your age group?
You are categorically wrong on the Immigration issue.
http://www.cic.gc.ca/english/r.....ent/17.asp
You still have not given a good reason Vancouver is less elastic than Miami? You really think that when the $%!^ hits the fan here, people won’t be running for the exits?
May 6th, 2008 at 8:58 pm
hmm… post does not equal what I posted.
Regardless,
supply < demand
So if these new people can’t afford to buy they will need to rent, thus rents2010 much greater rents2008
May 6th, 2008 at 9:05 pm
Canada has very little land and a huge population, therefore the scarcity of land is very real, it’s not as if with a stroke of a pen we can rezone and make more land available for new construction, this is why, although demand is high, there is not one crane in sight.
Vancouver is the most desirable place on earth; its near tropical weather, and thousands of miles of palm tree lined beaches makes it the number 1 destination choice for PhD’s from all over the world who want to establish a career with any of the thousands of head offices in Vancouver.
Vancouver’s stock exchange is currently in negotiations with the NYSE, FTSE, and NIKKIE to merge, and it is rumored the new Vancouver World Stock Exchange will be located on Alma & 4th.
Currently the composition of the labour force is :Technology and Science 85%, Finance 5% ,Services and Others 10% Median Household income: East Vancouver $198,000, West Vancouver $356,000.
May 6th, 2008 at 9:11 pm
Stagnate:
“I anticipate demand will stay quite constant.”
Okay, supply stays steady then. So with rising supply… what does that mean, you think? I think I hear Langara calling…
And how is it you know what those “oodles of young couples” in Kits are up to, anyway? I’m in Kits and I have no idea what they’re up to.
May 6th, 2008 at 9:15 pm
do do:
no, i’m a bit older than the typical kits renter demographic. i wouldn’t describe it as pent up demand, but there are a lot of potential buyers out there. it reminds me of 2000 ish when it was a frenzy trying to find a decent rental apartment and the rental pool swelled. some will decide to rent long term, some are close to entering the market, some need their incomes or prices to adjust to varying degrees to enter the market. hard to say to what degree speculators will influence the market from here. you are obviously more bearish than me, no point arguing (ever) on real estate predictions. i do my homework on any investment grouping, you can trust me the vancouver real estate market is less elastic than miami’s.
May 6th, 2008 at 9:16 pm
So if these new people can’t afford to buy they will need to rent, thus rents2010 much greater rents2008
If they can’t afford to buy the new construction will be purchased by landlords and rented out. It has to be one or the other.
Increased rental supply, no increase in rents.
As long as new construction equals or exceeds rate of household growth real rents cannot go up. No matter who is buying or not buying.
May 6th, 2008 at 9:18 pm
sidelines:
you need to stay on the sidelines until you pass math 11. you’re not ready to be a 4th liner on the home team.
May 6th, 2008 at 9:23 pm
Stagnate,
I will give you Miami being more elastic than Vancouver, but I don’t believe Vancouver has this inexhaustible demand, especially at these prices (or even 70% of these prices).
I do not believe we have lots of demand waiting based on the already historically high ownership rate. How can this be??? The only way we could increase that was by borrowing from the future. Is the future ever going to arrive?
You haven’t addressed the immigration point yet!!
May 6th, 2008 at 9:28 pm
It’s all about rates, as usual, people. Rates are way too low so we are now seeing a saver’s revolt in commodities. I would not be surprised to see oil hit 130 soon. Rice, wheat, everything is going up so why would I leave my money in an account paying 3%?
Vancouver real estate is absurdly priced if you look at long term trends, but you can get a 500K mortgage and only have to pay 20K in interest a year! Rent for that type of property is not that far off, so I think we have to wait till the labour market detiorates.
It could start tomorrow, but be objective, talk that van real estate is going to drop 30% overnight is a little optimistic from the renter’s side, especially since the BOC has hinted two more rate cuts are on the way (inflation is only 1.4%)haha.
Can we say a 3.5% variable rate!!
I also heard that Ben Bernanke is willing take BC bud as collaterol for mortgages in Van to stabilize the markets.
May 6th, 2008 at 9:33 pm
you can get a 500K mortgage and only have to pay 20K in interest a year! Rent for that type of property is not that far off,
“Not that far off”? You’re the one who’s far off – like on another planet.
May 6th, 2008 at 9:43 pm
do do:
immigration is one thing i am quite certain on, a lot are going to come. this old man is off to bed now so i won’t expand on my immigration theories. have a good night.
May 6th, 2008 at 9:48 pm
here’s some math for you.
Even if all new housing is rental only and no buys to live in it.
Rentalsupply2008 – Rentersdemand2008 = vancancy2008
[Rental suppy2010 = Rentalsupply2008 + (x/2)]
[Rentersdemand2010 = Rentersdemand2008 2002+ x/2]
Renterdemand2010 – Rentersdemand2010 – Vancancy2010
Vancancy2008 > Vancancy2010
With Vancancy already at a low and going to get worse, how will rents not go up??
May 6th, 2008 at 9:53 pm
Stagnate,
I don’t really care about Theories. You had said that Vancouver was the first choice for immigrants, but Ontario gets almost 3X as many every year. You then re-iterated that “toronto was surpassed as the first choice of immigrants about twenty years ago”, which by all the data I can find is just plain not true.
Are you wrong, or am I????????
May 6th, 2008 at 9:56 pm
Ok patriotz, it’s all going to zero. Sorry, you had to pay 20% in the 80′s, but the spineless BOC does quarter percantage hikes nowadays, so it will take Carney another .25 times 64 meetings to get back there. See you in 5.3 years……..
May 6th, 2008 at 11:37 pm
do do:
there will be enough immigrants coming here to sustain a significant demand for real estate (rental or owned). your implied theory of massive deflationary implosion is unlikely; you do care about theories, otherwise you wouldn’t have responded to my post in the first place. i didn’t say more immigrants come here than ontario, only that this would be the preferred destination for most of them.
May 6th, 2008 at 11:38 pm
Coco’s new blog started up
Things you may want to know
http://thingsyoumaywanttoknow.wordpress.com
First topic posted is on real estate.
May 6th, 2008 at 11:59 pm
-A-, you make some very good points. I would like to add that employers in Vancouver are very generous and like to give big raises every year. Everyone gets at least a ten percent raise every year, so house prices can keep going up up up because our incomes are growing as fast as house prices.
May 7th, 2008 at 12:44 am
Ok patriotz, it’s all going to zero.
“All” going to zero? All what?
Anyway the BoC rate, whatever it is, is not relevant to RE markets. Retail mortgage rates – which are determined by the bond markets and retail overhead and risk premium – are, and they’re not coming down, unless we get into a severe recession, in which case the RE market will be way past the point of saving no matter how low rates go.
There was a huge drop in mortgage rates from 82 to 84 and we all know how much good that did for the market.
May 7th, 2008 at 12:58 am
i didn’t say more immigrants come here than ontario, only that this would be the preferred destination for most of them.
Immigrants can live anywhere they want, so the preferred destination is where the most immigrants go. Just like the preferred tourist destination for Canadians is where the most of them go, the preferred beer is the one that sells the most, etc.
Or do you mean perhaps that they would have preferred to come to Vancouver but they went to Toronto because they can afford to buy a house there but not here. Well that’s really bullish for Vancouver RE isn’t it.
May 7th, 2008 at 4:30 am
;
;
;
The Alberta Crash at it’s early stages:
http://www.canada.com/edmonton.....c9&p=2
“How the real estate went from boom to buyer’s market in a blink of an eye
The experts explain city house prices”
Did CMHC forecast this for Alberta?
Naturally this can’t happen in BC, we have natural resource.
May 7th, 2008 at 5:59 am
-A-
Your figures are WRONG. Add up to only 100% employment. Everyone in Vancouver works at least 2 jobs. Only way to pay their mortgage, even at bankers or realtor salary. LOL
May 7th, 2008 at 6:46 am
How the real estate went from boom to buyer’s market in a blink of an eye
Ha. It’s not a buyer’s market until the buyer is making a smarter decision than the seller, and that’s not until prices stop falling.
May 7th, 2008 at 7:11 am
Re the Edmonton article:
Adams: “I think that the number of people who can afford a single-family (house) at the price that we have to charge in Edmonton is greatly reduced because they’re just getting expensive.
Sorry to break the news to you Mr. Adams, but Mr. Market doesn’t care how much “you have to charge” for a house, whether you are developer or a reseller. You get what he feels like giving you.
If you would like some evidence for this theory, why not accompany some of your fellow Albertans on one of their property-shopping trips to Phoenix.
The other “experts” are just as clueless (or dishonest).
May 7th, 2008 at 6:46 pm
Stagnate,
I don’t understand your argument. Does it really matter how many immigrants “prefer” to move to Vancouver? Shouldn’t the number matter? Or like with all housing bulls, numbers don’t matter?
May 7th, 2008 at 6:47 pm
Sorry, above should read doesn’t the number that move here matter.