Priced out?
Are you priced out of the Vancouver real estate market? According to the Province, you’re not the only one. The weekend the Province ran a series of articles on the costly local real estate market:
The answer is anyone with one or more of the following: wealthy boomer parents, equity from previous real estate or extremely high double-income earnings.
But even with those prerequisites, many are stretching their limits.
“Everybody maxes,” says Marty Pospischil, a realtor with Dexter Realty specializing in the west side.
The profile of a typical buyer of a $1.3-million, three-bed, two-bath west-side home is a couple between 35 and 45 years old with one or two young children. They are both professionals who have ascended the ranks — think stockbroker, lawyer, doctor.
They will usually have a down payment of $400,000 to $500,000 — derived from a combination of personal equity, inheritance or a substantial gift from a wealthy boomer parent, says Pospischil.
That means they’re still borrowing between $800,000-$900,000.
Expectations clash with reality:
With the income-to-house-price ratio the highest it’s ever been in B.C., the overwhelming perception — particularly in Vancouver — is that the market has changed the definition of “middle class” and displaced the working poor.
It is increasingly common to see children raised in condos, married couples living in their parents’ basements, young professionals taking on second jobs, workers commuting long hours, the growth of the 40-year mortgage (which 65 per cent of first-time buyers are now using, according to a RE/MAX report) and the realization for some that an inheritance is the only way to a single-family home.
Tsur Somerville: its not a bubble:
“If you say bubble, then at some point it’s going to pop. And if you look at our price increases, they’ve been double-digit, but for the most part they’ve been between 11 to 15 per cent for the past few years. That’s high, but in a bubble you start to see 20-per-cent growth, 30-per-cent growth. Just really rapid acceleration, and we haven’t seen that. That’s what happened in 1981 and 1982 . . . That’s what a bubble looks like.”
John: There’s no point complaining about prices. I think people should focus their energy on how they can find new ideas/businesses/solutions to generate more income. If you spend all your time complaining you won’t have enough time thinking about new businesses that can work and make more money!
May 12th, 2008 at 7:34 am 1
Looks like Mr. Somerville just reserved himself a spot in the annals of RE bubble notoriety. Maybe he's looking for a gig as the next NAR economist? 11-15% a year no bubble, that's sustainable, but add 5% and watch out you've got a bubble now! What an amateur.
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May 12th, 2008 at 7:57 am 2
and an amatuer that is geting paid 200k plus a year from YOUR provincial taxes….
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May 12th, 2008 at 8:08 am 3
It would be nice if he actually published something once in a while, too.
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May 12th, 2008 at 8:12 am 4
"That means they’re still borrowing between $800,000-$900,000."
Great stat to show how much the more affluent areas are leveraged. I wonder if there are enough doctors, lawyers, and stockbrokers to keep prices high.
"and an amatuer that is geting paid 200k plus a year from YOUR provincial taxes…."
Apparently we should add overpaid economists to the above list.
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May 12th, 2008 at 8:13 am 5
I love how "everybody maxes." Somehow that doesn't make me feel any better. So what if conditions suddenly change? Everybody is in financial trouble?
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May 12th, 2008 at 8:48 am 6
The page before the article has a lovely full colour spread for a condo project- this is the same RE hype the Sun was chastised for just a few weeks ago.
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May 12th, 2008 at 8:53 am 7
Via, I love that platitude as well. I guess we are all "maximisers" therefore we "maximise" purchasing real estate.
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May 12th, 2008 at 9:17 am 8
What I would like to know is, what are the cities going to do when their tax revenues, based upon real-estate evaluations, collapses, as the bubble bursts? Cities have become so dependent on these high valuations. Police, firefighters, ambulance, garbage, road repairs, are going to feel the pinch. And then what? Is anyone in government thinking about the long term consequences? We are heading for a train wreck. Frankly, if house prices do collapse, and I think they will, I don't want to be here to witness the after affects. Honestly, I think we brought this onto ourselves, everyone has had a hand in this, through selective ignorance, irresponsibility, selfishness and greed. Now the Piped Piper is coming, its coming time to pay, and then the finger pointing, whining, and acrimonious holier than thou attitudes are going to start. And it could very well be down-hill from there. Take a look down south, some cities around LA have gone bankrupt! And Vancouver is a bigger bubble, in fact its the biggest bubble in North America, by some reports.
Its time to leave, this place is heading for some real pain. Better to get cozy now somewhere else, than to leave when all the other rats start leaving en masse.
Vancouver and BC in general are beautiful places to live, it is a crying shame, they are run by a bunch of greedy, pathetic morons.
Good-bye and good-luck to the more in touch with reality of you. As for the rest of you, you deserve what's coming, I hope you hurt and suffer a lot, you deserve it.
Signed,
A Bitter Immigrant.
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May 12th, 2008 at 9:27 am 9
bitter imi – for the 100th time on this blog, RE price has no real impact on tax assessments. Comparative price (in relation to other properties) does, but taxes don't increase or decrease with the changing value of a single property. The city simply sets a budget and charges whatever taxes it needs.
However, provincial sales taxes will be impacted hugely by a large downturn, as will other forms of municipal and provicial revenues, so your basic point is on target.
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May 12th, 2008 at 9:36 am 10
.
.
Tsur's hunger for attention probably serves some twisted need to show mommy that he's running with the big boys.
Unfortunately, when it comes to credibility among economists, he could'nt carry Robert Shillers jock strap.
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May 12th, 2008 at 9:37 am 11
What I would like to know is, what are the cities going to do when their tax revenues, based upon real-estate evaluations, collapses, as the bubble bursts? Cities have become so dependent on these high valuations.
Wrong. You have been reading reports from places like California where tax revenues do depend on assessments.
In BC, local governments decide how much money they want to spend, then set the mill rate based on the current assessment base. Thus your assessment determines only what fraction of the total taxes you pay.
During the 80's bust in Vancouver:
1. Property taxes kept increasing around the rate of inflation.
2. There were no cutbacks of city services.
3. Vancouver kept its AAA credit rating. Other municipalities borrow through MFA and don't have credit ratings.
It's the provincial government that is vulnerable to a RE bust. Never before has RE accounted for such a large % of provincial GDP. A bust will result in losses in property transfer tax, income tax (personal and corporate), and capital gains tax. Not to mention the losses in the forest industry due to the US bust and general losses due to the upcoming US recession.
If the provincial government gets strapped it may try to offload more school taxation onto local property owners, but that has nothing to do with the municipalities. But people will blame the municipalities because they're the ones who send out the tax bill.
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May 12th, 2008 at 9:54 am 12
Don't worry, in Vancouver your house value can drop while your property tax is going up, thats the most likely outcome of this bubble.
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May 12th, 2008 at 10:14 am 13
I did love the page right before the story which of course was an add for condos. I like how it gives the feeling that's it ok to go into massive debt because a lot of other people are doing it.
It hints at two options. Option 1. Work two full-time jobs, 80 hour weeks. Option 2. Get a 40 year mortgage.
How about Option 3? Sit back, relax a bit and watch as prices fall month after month.
Renting and waiting….
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May 12th, 2008 at 10:57 am 14
A lot of you people have been priced out because you waited and waited. So just keep renting and stop complaining. You've made your bed now sleep in it.
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May 12th, 2008 at 11:00 am 15
yes rob a, waited and waited whiule we were students.. silly us, we should have been taking on huge mortgages when we were studying….
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May 12th, 2008 at 11:14 am 16
Gee, lets figure this out. US M3 money supply increasing at 17%, 10 year US treasury note around 3.75%.
Basic logic suggests that interest rates are heading much higher and likely sooner rather than later. Amazing thing, is that Canadian mortgage rates are based off of US bond market.
I wonder how our stockbroker, lawyer buyer with the 900K mortgage will enjoy mortgage rates at least 50% higher??
Interest rates remain far too low, the bond market will correct, and so with Vancouver RE and it will be very ugly. In all likely, we will return to 25 year ammortizations and min 10% down, tighter lending guidelines.
And there will be parliamentary enquiries investigating this massive real estate finance fraud. CMHC will lose tens of billions, educated guess.
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May 12th, 2008 at 11:22 am 17
"read on" maybe you should read more carefully. I said "a lot" not all. Stop being bitter and accept your situation or do something to change it. Lashing out at people isn't healthy. All that anger you have inside can't be healthy.
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May 12th, 2008 at 11:32 am 18
The Zen of Waiting:
every month the values slip by $10K,
month after month until everything is in
balance and harmony….. at which time it will be a no-brainer to buy some distressed RE….
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May 12th, 2008 at 11:39 am 19
Rob A: "A lot of you people have been priced out because you waited and waited. So just keep renting and stop complaining. You’ve made your bed now sleep in it."
See, its EXACTLY that kind of smug self-congratulating attitude (without any substance or merit I might add) that fuels my schadenfreude and hopes that you have to eat dirt sandwiches for a decade when things crash.
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May 12th, 2008 at 11:40 am 20
Like I said, sit back, relax and enjoy watch inventory climb every week. As supply increase prices will fall. I accept my situation by renting and investing the difference. The stock market is low so it's a good time to buy stocks.
All it takes it some research to show that all cities that have hosted the Olympics had a boom then a bust.
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May 12th, 2008 at 11:42 am 21
Read on:
Patience is a virtue. I think if there's one thing we can agree upson, it's that prices are out of whack.
At this point, people like Rob A. illustrate an important point: Vancouver real estate comes with some pretty high emotions invested in it. Personally I think when people's emotions infect investment decisions, bad decisions result.
So… find a nice little spot and rent it. I have a fantastic place, a comfy 1 bdrm in the middle of downtown I'm renting for about 1300 bucks a month. It's big, bright spacious, well run, completely renovated. I painted the place myself and the colours are fantastic. I feel very much "at home" there. It satisfies my emtional need for a safe, comfortable beautiful home. The building's a rental run by a guy who wants long term tenants so little worry of being evicted.
Being a practical sort, I also love it because it isn't draining the life right out of me financially.
This "Priced out" meme is also very useful. The implication (just uder the surface) is that "there are no more buyers at current price offerings.
When you couple these with Paul B's charts you get:
1) Rapidly growing inventory
2) No more buyers getting into the market.
What is the natural conclusion?
We have passed the peak of the bubble and are now in the beginning stages of collapse.
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May 12th, 2008 at 11:51 am 22
I believe it was around 2005 when people started getting priced out of many American cities. I guess those that got in just before 2005 were astute investors. Meanwhile those that didn't have the cash to buy then and saved for the last two or three years are looking at the dire option of buying houses that are worth far far less than they were then.
Check out http://pricedoutforever.com for a nice summary of the 'priced out' fallacy.
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May 12th, 2008 at 12:23 pm 23
Rob A. was it your decision to buy a condo downtown or did your parents buy it for you?
would you qualify for a mortgage?
In other words, did you make your bed or did your Mum?
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May 12th, 2008 at 1:05 pm 24
I love the people that are saving all this money by investing the difference between renting and owning. Why buy ever though? It's always cheaper to rent then to own (especially if you include oppurnity cost on the downpayment), just keep investing the difference, and laugh at the owners. Why care about a correction at all?
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May 12th, 2008 at 1:08 pm 25
I would defiantly agree with scullboy in that we are entering the stages of the crash. A lot of people are still naive to think price will remain the same. Just look at how many open house signs that are popping up everywhere.
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May 12th, 2008 at 1:12 pm 26
Bitter Immigrant said: Good-bye and good-luck to the more in touch with reality of you. As for the rest of you, you deserve what’s coming, I hope you hurt and suffer a lot, you deserve it.
That just about sums up the overall sentiment on this Blog. Assclowns like you don't realize that the meltdown you are hoping for over will hurt everyone in Vancouver (including you), not just condo owners.
It's despicable and small-minded.
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May 12th, 2008 at 1:26 pm 27
But nyc, don't you think that the high RE prices have hurt Vancouver and many who live in it? What about all these people stretching themselves to fit into a 40 year mortgage?
All the people who bought 3+ years ago will be fine. The people who bought recently could be in trouble in the future, but that was their choice and it's too late to change that choice. Maybe we should think about all the people in the future who want to live here, and how they and Vancouver will be changed if they can't. Isn't keeping prices artificially high doing more damage than fixing the problem?
You're advocating that we nurture the tumor because chemotherapy makes one feel like crap. I personally don't understand that.
I'm hoping that prices come back in line with rent/income/reality. Does that make me despicable too?
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May 12th, 2008 at 1:38 pm 28
Now that I have a good affordable rental with a decent landlord, I'm more at peace with this place. I wish I could save more, but living in a low rent basement apartment didn't work out well…this explained my dark mood at the time.
This bubble will burst and I can watch it from the sidelines, munching on popcorn. I have enough transferable skills and experience that I should do well enough in a recession. If the local economy goes to hell, I can leave without having to sell (hey, that rhymes).
The one I don't look forward to is finally learning who among my family and friends is dangerously over-leveraged in real estate. I'll make sure to have tissues on hand.
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May 12th, 2008 at 1:52 pm 29
If I were to go and leverage $500k on Oil Stocks when it's obviously at an all time high because I heard that it was going up from a starbucks barista or a warehouse worker and I went and did it and then after the fact checked out an investment blog and asked them what they thought and was told by the majority there that I'd made a risky move.
Would it be appropriate for me to call them assclowns?
If it was me that made the ignorant decision, why lash out?
Does calling a top mean that we're causing the market to crash? Who's to blame here? The morons that pumped the market up or the wise men who patiently stood on the sidelines and said enough is enough?
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May 12th, 2008 at 2:01 pm 30
"A**clowns like you don’t realize that the meltdown you are hoping for over will hurt everyone in Vancouver (including you), not just condo owners."
So we should take one for the team and buy at high prices? The horse is out of the barn when it comes to the future direction of Vancouver prices — back to the long term average we go. I agree with you though: a housing crash will hurt everyone in Vancouver in some way. The question is how badly will you and everyone else get hurt.
"Why buy ever though? It’s always cheaper to rent then to own"
This turns out to not always be true, even in Vancouver, as inconceivable as that sounds.
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May 12th, 2008 at 2:10 pm 31
nyc:
What's with constantly calling people "assclowns"? I find this a rather puerile putdown, not least because it makes no sense. An assclown is simply a redundancy. You're an ass, you're a clown, you're an assclown. It's like calling someone a moroncretin.
I think the term you are looking for is "asshat". Having an ass for a hat means you have your head part way up someone's ass. This is an evocative and effective insult.
Anyway, what you are doing is a) bolstering your own position by claiming moral high ground, and b) casting aspersions against your opponents thereby discrediting their position. Both tactics are rhetorical devices, not actual argument.
See:
http://www.don-lindsay-archive.org/skeptic/argume…
Particularly, "Argument from Adverse Consequences", "Needling", and "Straw Man".
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May 12th, 2008 at 2:38 pm 32
Hoping and wishing that people who bought condos (which could be your own friends or family) are devastated by an environment created by RE Developers and Banks is despicable and short-sighted no matter which way you slice it.
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May 12th, 2008 at 2:42 pm 33
Assclowns like you don’t realize that the meltdown you are hoping for over will hurt everyone in Vancouver (including you), not just condo owners.
You said you'll be fine with your condo no matter what happens with prices, so what are you still doing trolling this blog?
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May 12th, 2008 at 2:43 pm 34
dingus, just for you: http://www.ass-clown.net/
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May 12th, 2008 at 2:44 pm 35
Well. Devastating rebuttal. Did you read anything anyone else said?
Now you're just shouting. Don't expect to be taken seriously if you don't actually respond to things that are said to you.
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May 12th, 2008 at 2:45 pm 36
an environment created by RE Developers and Banks
The environment was created by condo buyers, the bank and developers never held a gun to anyone's head did they?
Disclosure, I'm long Kleenex.
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May 12th, 2008 at 2:49 pm 37
…and I'm rubber and you're glue, nyah nyah.
There we've elevated the dialogue once again.
Boy, attempting to be reasonable with the shrill is such a waste of time.
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May 12th, 2008 at 2:51 pm 38
Hoping and wishing that people who bought condos (which could be your own friends or family) are devastated by an environment created by RE Developers and Banks is despicable and short-sighted no matter which way you slice it.
What about attempting to sell real estate as a can't-lose investment strategy that encourages people to 'max out' financially? Is that despicable? What about warning people (including friends and family) about the risk in the vancouver market? Should people that have lived through vancouvers booms and busts and seen families ruined just keep their mouths shut and pray that it's different this time?
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May 12th, 2008 at 2:51 pm 39
hahahahaha, this is a great discussion. Especially love the highbrow aspect too…um….assclowns?!
So, let me get this straight, because many of us felt that by 2004 or so, the market was getting overvalued (relative to incomes and rents) and many of us have since opted to watch from the sidelines…while we were pilloried by the RE tycoon geniuses who snapped up, overextended, 40 yr chained themselves, or flipped, and repeat….. and have been sneered at as an underclass because we rent and we did not figuratively nor literally buy into the hype….now that the market appears to be correcting (whatever that may end up meaning) we are a bunch of assclowns because we do not feel appropriately sorry for others who invested in an asset class that they did not understand (beyond the fact of course that RE in Vancouver always goes up)…?
"Despicable and small-minded"…I assume from the fear in that language that NYC is one of those who is overextended in RE and no doubt also leases a vehicle that he can't afford to buy either….and maybe does not pay off his credit card every month? HELLO THIS IS CALLED FINANCIAL REALITY…..
Really, you will one day look back on all of this as a valuable learning experience, I have no doubt….
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May 12th, 2008 at 3:13 pm 40
http://tinyurl.com/4e8rxj
Don't miss this one! The Calgary Herald on housing crash. Sure sounds like us a few months from now.
"Those are the people that went out and bought four, five, six, seven condos in a building that wasn't going to be built for two years. All of those buildings are now being completed. Those people did not want to be landlords. They were going to buy the condo, hold it until the building came due and put it on the market,"
Do anonymous commenters on blogs get credit for source? I don't think thats needed. Put a name up and I'll credit you.
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May 12th, 2008 at 3:27 pm 41
hmm according to G&M TSX closed up +144.88 at 14,666.07 … assure me that this is not a sign…
Rob A: what is your take on this?
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May 12th, 2008 at 3:32 pm 42
nyc moved here from nyc and altruistically wants prices to continue to rise so that speculators can get rich?
okay, so then what happens when prices become so high that no one can afford to own or rent them?
an empty city save for an angry internet consultant?
Is this a good thing?
Do speculators/gamblers who bought ten condos hoping to strike it rich deserve it?
If it only ever goes up then what's the problem? Any other unsophisticated buyer can go buy right now with 10%. it might not have worked in Calgary or anywhere else in the world but Vancouver is different, it's different here. No one made the speculators buy so who's fault is it that the speculators drove the market too high?
*Caveat Emptor* especially when making a large purchase.
How much research did you do before buying your last computer or tv?
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May 12th, 2008 at 3:38 pm 43
Not Vanc. RE but of GREAT interest to any investor. A new column has started at RGEMonitor, featuring guest writers on various topics. I think it will be must-read stuff.
http://www.rgemonitor.com/financemarkets-monitor
I think you need to (free) register to get more than a teaser.
Nothing of interest there if every penny you don't have is tied up in a Vancouver condo, and you just KNOW that external factors will NEVER impact "The Best Place on Earth"! Others may wish to check it out.
I'm posting at a few other spots as well. I think this is very, very good bookmark site.
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May 12th, 2008 at 3:45 pm 44
Thanks alexcanuck, commodities are no doubt likely to pop soon…and we will need new ideas for generating return form somewhere!
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May 12th, 2008 at 4:13 pm 45
"hmm according to G&M TSX closed up +144.88 at 14,666.07 … assure me that this is not a sign…
Rob A: what is your take on this?"
A sign of what?
My take on it is that
1.) In tweleve months stocks have gone up maybe 5%. That sucks.
2.) It's a sucker's rally.
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May 12th, 2008 at 4:45 pm 46
It’s a sucker’s rally.
do i detect some bearish sentiment here?
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May 12th, 2008 at 4:51 pm 47
Why buy stocks when they aren't going up and you can live in a condo downtown and be near resturants and caffes?
People in the know realize that downtown is the place to be!
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May 12th, 2008 at 4:54 pm 48
okay, so then what happens when prices become so high that no one can afford to own or rent them?
Prices: they go down.
Rents: don't become unaffordable because they are paid from current income. Real rents in Vancouver have been declining, and in fact are more affordable than decades ago.
Rents do not, repeat do not, follow prices. It is rents which determine prices. Not necessarily in the short run, but always in the long run.
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May 12th, 2008 at 6:03 pm 49
"Why buy stocks when they aren’t going up and you can live in a condo downtown and be near resturants and caffes?" and near people with really really low IQ's!
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May 12th, 2008 at 6:53 pm 50
NYC:
What people here hope for is irrelevant. Most people here saw the data, came to conclusions, and had the courage to stick to their guns.
Many of us have tried to warn family an friends, only to be looked at with a mixture of pity and scorn. I have two friends who are considering buying another place. One of them works for VANOC ans has been self-waterboarding with the RE koolaid. He'll quote occupancy rates for 2010 like… well like they're relevant actually. After a couple of conversations I told myself i'd done my job and I don't bring the subject up any more.
Most of us have seen this coming quite some time and we're prepared. We're not living beyond our means. We didn't take risky gambles on RE. We're fairly comfortable in our homes and have the luxury of knowing in a RE downturn our money is safely stored elsewhere.
See, winter's coming. We're quickly about to see who was a grasshopper, and who was an ant.
Someone pass me that pitcher of mai-tais. I may not be able to affect the future but I can damn sure enjoy the show.
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May 12th, 2008 at 6:57 pm 51
I'm thinking an interesting side effect of the impending bust will be increasing strata fees, quite a few units in a development may not be generating strata fees. Distressed specufestors will be arrears, being very reluctant to pay a fee when they have no tenant. Suites may become ownerless due to foreclosure, or just an inability to sell newly built unowned units. Thus the tenanted suites will be specially assessed in order to make up the balance. Or something.
Any thots on what will happen to condo fees in the impending bust?
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May 12th, 2008 at 6:59 pm 52
Rob: You buy stock with an eye to where they'll be in the future.
And yes, downtown is the place to be. Of course at current rates, you can rent and spend your extra money eating out at cafes every night.
I still don't get why people think you need to *own* in Vancouver to enjoy downtown….
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May 12th, 2008 at 7:47 pm 53
Every young couple is chasing the American dream (home ownership) This dream will become a nightmare for many and
that is the fact. Bankruptcy, Divorce lots of good stuff before the divorce (horrible fights, excessive drinking…)
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May 12th, 2008 at 7:47 pm 54
but that does not make your case for crash! either you buy- or you rent, that's normal. for example:Since how long have you been renting?Did the market crash since than?or if that would lead to further crash? no, yeah!so it's doesn't matter if you buy or rent!!!!!
these blogs are to look into the matter if vancouver r.e. carry bubble in it or not.
issue for this post"PRICED OUT" is to decide how to reserve a piece for your self in Vancouver?
Type of attempts that could be helpful for people to stay in the city,some facts as following……..
1.How to increase your income?.
2.Where you can find a place according to your income?
3.Weather you can buy a house here or condo?
Rob A. makes a good point that is the issue from this post.
NYC is getting angry on you guys because you are not in your sense.
NYC is still being nice to you he has limit himself by calling you assclowns but i think most of bears need to be called "DOMESTIC IDIOTS" all those sold out owners who begging for recesion while economy here is better than the national growth 2.5% compare to 1.5% and countinue to grow at higher rate later.
Here is stratamans i.q's "sold 2005" are you serious to tell people their i.q's?????
Sonika are you sure those snow shoveling cities are better than Vancouver?sure you did not read the link where Vancouver,B.C.is talk! talk!! talk!!!.
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May 12th, 2008 at 8:16 pm 55
Why buy ever though? It’s always cheaper to rent then to own (especially if you include oppurnity cost on the downpayment), just keep investing the difference, and laugh at the owners. Why care about a correction at all?
1. In the long run, it really has been cheaper to own. I expect that to continue once this bubble has burst.
2. The intangibles of ownership (pride, stability, blah blah)
Assclowns like you don’t realize that the meltdown you are hoping for over will hurt everyone in Vancouver (including you), not just condo owners
What stupid kind of comment is that? People wish for this misallocation to end sooner rather than later so that there will be fewer people negatively affected. This has nothing much to do with "hoping" for a crash, but rather a return to normalcy, which includes prices that are fundamentally justifiable.
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May 12th, 2008 at 8:18 pm 56
has been self-waterboarding with the RE koolaid.
LOL!
good description… Rennie Marketing Redux!
also congrats on your new digs…..i can see SATV scouring the core seeking your humble abode
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May 12th, 2008 at 8:23 pm 57
nyc:
your nerves are getting to you, sell your place so you can start sleeping again. this is a bear site, the only bulls that post here are the ones that like stirring the pot or ones that want the validation that they made a mistake buying near the top. your condo is probably not going to drop that much but the ride is going to be too much for you. take your 20-30 thousand haircut now, you know you want to.
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May 12th, 2008 at 8:25 pm 58
take your 20-30 thousand haircut now, you know you want to.
classic case! pain now or more pain later..?
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May 12th, 2008 at 8:31 pm 59
Blueskies,
you are not included in the domestic IT's I know you and drachen and miss anthtropic crumdgeon are very honest bears.
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May 12th, 2008 at 8:33 pm 60
I am surprised how freako miss the oppertunity?question that bother me, how to claim self best when you were not forming the lineups at right time?????
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May 12th, 2008 at 9:20 pm 61
16426 – Paul B's number for today. I almost soiled my pants.
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May 12th, 2008 at 9:28 pm 62
Ridiculous numbers from Paul B's site. If anything remotely similar continues, idiots like Krrrish2 will soon disappear with their tails between their legs.
I just can't see there being reprieve with the 'in construction' pipline so full.
The listings are huge, but the sales are next to nothing, I can only guess they focused on getting the listings out as RE board mentioned it's promised to do so within 48 hours. If not, well, sales are slipping bigtime.
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May 12th, 2008 at 9:35 pm 63
30,000 fuel trucks are being pumped in the gas stations.
Gazzilions gigabites energy is being store by bc hydro.
2.5 millions gallons of milk are being available in store to buy from vriety of selection,
So 16426 homes are available to buy the difference is energy,fuel,and milk gallons are fresh or refurbished but 16426 listings are resale homes,good to chose the best.
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May 12th, 2008 at 9:50 pm 64
Listing have jumped over 1100 in the last week, according to Paul B's numbers. This isn't just a one day blip.
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May 12th, 2008 at 9:54 pm 65
It’s always cheaper to rent then to own
That would mean (if it were true, which it's not) that landlords would always lose money.
Now just why would they want to do that?
The reason why people go into business renting anything – be it houses, cars, skis, etc, is that owning is cheaper than renting. That's how they make a profit.
"Investors" (really speculators) are buying houses and condos today in the illusion that perpetually rising prices will offset operating losses. When rising prices go away, so will the illusion.
Yet another example of RE ideology – statements which are contrary to evidence, never mind unsupportable by theory, being served up as fact.
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May 12th, 2008 at 10:07 pm 66
"Listing have jumped over 1100 in the last week, according to Paul B’s numbers. This isn’t just a one day blip."
Give it another week to ensure it's not a data entry or backlog problem. If it holds up make sure you get a good seat. It will be terrific.
I'm with nyc though. I know a few people that are going to get hurt and I will take no pleasure watching it.
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May 12th, 2008 at 10:42 pm 67
man oh man. being 35-45, with a wife and one or two kids, living in the westside and owing 800-900k is just depressing .
kind of ruins the point of making all that money when all you do with it is pay interest to a bank.
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May 12th, 2008 at 10:50 pm 68
just had writen fucking comment on self made story a jealousy from ontario spread to vancouver you idiot anecdotal dum head fuck off you bitch.
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May 12th, 2008 at 10:59 pm 69
I was just talking to a US convention visitor today who remarked "your downtown is kinda dead".
Dude, you ain't seen nothing yet.
(But don't blink or you will miss all the excitement during the Olympics).
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May 13th, 2008 at 12:47 am 70
I know a few people that are going to get hurt and I will take no pleasure watching it.
Owner-occupiers who have bought at absurd prices have already hurt themselves by committing themselves to interest on debt greatly exceeding the benefit (rent equivalance) of their properties. That's going to continue whether prices go down or not.
The value of a house (as opposed to its price) is the present discounted value of its future net rental income, and if you buy a house for more than that, either you or a greater fool are going to take a loss on it. No way out of it, no matter which way prices go. And if you are counting on a greater fool to make you whole, you are a speculator by definition.
And in any case nominal prices will eventually recover. After 1981 it took 8 years, probably more this time, but they will recover.
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May 13th, 2008 at 4:56 am 71
vancouver…great place in july and august and the first half of september..1 question? how come it couldn t get the summer games? …you know the answer… enjoy your crash…
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May 13th, 2008 at 6:36 am 72
…many of us felt that by 2004 or so, the market was getting overvalued…
Dude – that's FOUR YEARS AGO. How long do you have to be wrong before realizing maybe some of your assumptions are not in line with reality?
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May 12th, 2008 at 10:43 pm 73
[...] May 2008 · No Comments This bizarre but arguably apropos image from scullboy at Vancouver Condo Info, 2008-05-12 18:53:56 [...]
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May 13th, 2008 at 6:55 am 74
tokyob,
Are you newcomer in vancouver?
"Dude, you ain’t seen nothing yet".
Exactly:The olympics are in 2010.
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May 13th, 2008 at 7:17 am 75
that’s FOUR YEARS AGO. How long do you have to be wrong
We weren't wrong four years ago, any more than the bears in the US were wrong four years ago. Events have since proved that they were right all along. Here there is no proof one way or another – yet.
The jury is still out on Vancouver. I have a pretty good idea what the sentence will be, but we're going to have to wait a bit.
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May 13th, 2008 at 7:56 am 76
Paul's numbers are not a data entry error as evidenced by all the realtors posting troll posts here, they have nothing else to do. SATV has obviously not had any sales in a year or more.
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May 13th, 2008 at 8:14 am 77
"We weren’t wrong four years ago, any more than the bears in the US were wrong four years ago".
Yes you does otherwise you should be home owner,you should have paid 35% off of your mortgage and you should have earned 123% appreciation.
If you do not include in the above then it's preety much clear that you guys are the one to fit in DI category,people who always look for crash.
You should either have complained four year ago or you do it now but both case 4 and zero are not acceptable.
Bears who were lurking since that long need to get into the market as defeated bears and new comers need to learn a lesson from the veterans bears.
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May 13th, 2008 at 8:21 am 78
Bears who were lurking since that long need to get into the market as defeated bears and new comers need to learn a lesson from the veterans bears.
…or BUY SOMETHING! please……
bears are winners
bulls are dinners
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May 13th, 2008 at 8:28 am 79
My sister, a realtor, had her best year ever last year. This year, sales started strongly, but now things are dead for her and everyone in her office, which is not what she expected mid-May. Doesn't look promising.
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May 13th, 2008 at 9:27 am 80
Doesn’t look promising.
Depends on who you ask.
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May 13th, 2008 at 9:38 am 81
After much anticipation the lights are dimming and the show is finally beginning. For the enjoyment of all, will the likes of Krrish2 and others please turn off your cell phones , sit down and keep quiet.
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May 13th, 2008 at 9:42 am 82
Comment by betamax
2008-05-13 08:28:09
things are dead for her and everyone in her office, which is not what she expected mid-May.
*********************
She wasn't expecting it? Really? Is she illiterate or simply stupid?
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May 13th, 2008 at 10:06 am 83
BETAMAX,
Sales trends are low and further low 2% in 2009 compare to 2008 but prices will countinue to climb.
Listing means just listing to sell to make good money people who own those resale homes are already paying their monthly payments and lots of them are paid off so it doesn't matter if the listing grow further, if your sister is not getting bussiness- has nothing to do with market trends.OTHO she can find another part time job as well,if she is really a realtor otherwise who knows your motive.
Do you have a link to her website?
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May 13th, 2008 at 10:38 am 84
OT, but condohype found a great muckraking article on "Realtor to the Stars" Robert Zoost. Worth pointing out because I know the Sun gets slagged ad nauseum about shotty reporting in the local blogosphere but every once and a while someone there writes some decent journalism. I think the journalist, David Baines, deserves credit.
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May 13th, 2008 at 10:47 am 85
From the Gloat & Wail —
'Dramatically lower' commodity prices ahead: TD
TARA PERKINS
Tuesday, May 13, 2008
Toronto-Dominion Bank's chief executive officer says bankers making loans in Western Canada should do so under the assumption that commodity prices are too high.
TD's lending standards out West assume “dramatically lower” commodity prices than those that exist at the moment, Ed Clark told a financial services conference in New York on Tuesday.
“A banker should assume that the world financial system is over-inflating commodity prices,” he said.
TD is carefully watching oil service and gas service businesses today, he added.
“What's interesting is, despite the fact that the West is booming, it's the only place in Canada starting to show housing price softness, because in fact it is the one place in Canada where housing prices went up too fast,” he said.
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May 13th, 2008 at 10:49 am 86
OK, in the last week, I've randomly heard of two amateur condo flips. One from a co-worker whose husband is busy renovating and flipping condos. Then yesterday in the produce store checkout line, a woman talks about how she is helping her father fix and flip a condo.
If anything I'm randomly hearing about this activity more than I was a couple of years ago. Is there any time to even guesstimate how much of this "fix and flip" activity is still going on and how much of our economy (and employment) is still based on these small-time projects.
Even us bears might be shocked at how many people out there who are going to lose their livelihood and be forced back into the conventional job market once this boom busts.
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May 13th, 2008 at 11:38 am 87
forced back into the conventional job market once this boom busts.
What conventional job market are you referring to? Canada's (and BC's) export economy is in deep trouble (including oil) due to the high dollar, so that leaves domestic consumption to keep the engine going. If there's drastically reduced job numbers in the construction and related industries what's everyone going to do?
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May 13th, 2008 at 11:44 am 88
…grow weed, obviously.
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May 13th, 2008 at 12:12 pm 89
…grow weed, obviously.
Yes this is good. Increased supply will finally help bring the prices down to reality. Most people don't acknowledge it because they're used to the high prices, but this is another bubble market looking for a correction.
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May 13th, 2008 at 12:13 pm 90
"If there’s drastically reduced job numbers in the construction and related industries what’s everyone going to do?" Thats easy they are paying to much for warehouse workers (Krrissh) they could fire him and hire five more at minimum wage.
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May 13th, 2008 at 12:28 pm 91
Don't forget Wal Mart, they'll be hiring soon too.
If krissh is as good as he thinks he is he might qualify for shift supervisor and make $10.40/hr!
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May 13th, 2008 at 12:36 pm 92
" Is there any time to even guesstimate how much of this “fix and flip” activity is still going on and how much of our economy (and employment) is still based on these small-time projects."
I don't know if gains from personal residence flips are included in GDP. Suffice it to say even if prices are flat you will not make much money on renos unless you do FSBO. I'm sure there's a lot of buy and hold for a few years as many have other jobs outside the renovation sidebar so the work takes that much longer to complete. Good question though.
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May 13th, 2008 at 12:47 pm 93
Or get a job fixing/cleaning/checking up on properties that have been repossessed by the banks. Wasn't there an article about that linked here recently talking about that? Apparently once things start crashing, that sort of thing becomes very lucrative.
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May 13th, 2008 at 3:03 pm 94
BBY said: "I’m thinking an interesting side effect of the impending bust will be increasing strata fees, quite a few units in a development may not be generating strata fees. Distressed specufestors will be arrears, being very reluctant to pay a fee when they have no tenant. Suites may become ownerless due to foreclosure, or just an inability to sell newly built unowned units. Thus the tenanted suites will be specially assessed in order to make up the balance. Or something."
It is my undrestanding that all units assess strata fees. If the developer can't sell it they maintain ownership and are liable for the fees. If the bank forecloses they own it & are liable. If a specuvestor owns they are liable. So technically a suite can't be ownerless and the Strata will have grounds to pursue non-payers of strata fees in court. I don't disagree that dealing with non-payers of strata fees could be an issue but in dealing with an asset like an apartment the Strata always has someone to go after for the fees. Worse case scenario they put a lien against the property and get the outstanding fees plus costs & interest once the suite sells.
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May 13th, 2008 at 3:42 pm 95
Just wondering, why does nobody ever mention increasing housing supply across the region when the topic of Vancouver's absurdly expensive real estate comes up?
It's amazing how many people believe zoning most of Vancouver for single-family houses and limiting building height everywhere couldn't have any effect on housing prices.
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May 13th, 2008 at 3:56 pm 96
On a positive side of the crash…After bankruptcy maybe Krrrsh will be forced to go back home wherever godforsaken land he came from once and for all… Don't worry we won't miss ya
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May 13th, 2008 at 4:24 pm 97
Anonymous replied to my question about delinquent strata fees "If the developer can’t sell it they maintain ownership and are liable for the fees. If the bank forecloses they own it & are liable. If a specuvestor owns they are liable."
Yes, I see that there would always be someone to go after. I guess delinquent accounts would appear as account receivables on the strata's account books. But the strata would still have to go after them. The delay between the debtor (be it an owner, developer or bank) declaring insolvency, and retrieving the monies owned from a lien could be a pain. Ugh. Probably gonna be a lotta work for the collections industrial-complex… Could get yucky. Oh well there is the lien. As long as there aren't too many creditors ahead of the strata in the line up to get their money back.
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May 13th, 2008 at 4:26 pm 98
Comment by "read on" at 2008-05-13 16:24:07 was actually from BBY.
stupid blogging software. grrr….
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May 13th, 2008 at 4:32 pm 99
Just wondering, why does nobody ever mention increasing housing supply across the region when the topic of Vancouver’s absurdly expensive real estate comes up?
Who are you calling nobody? That topic has been discussed many times on this blog and many others related to Vancouver RE.
Regardless, what's your point? What effect do you think it will have, is it going to "save" us from falling prices or make them crash harder?
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May 13th, 2008 at 5:11 pm 100
"As long as there aren’t too many creditors ahead of the strata in the line up to get their money back." Doesn't matter the strata has to get paid by whomever ends up with the title. They are not normal creditors. Even if the place is worth a dollar their lien will still tie it up. Worse case would be that the strata ends up with the property and would sell it for what is owed. They supersede in the end; everyone.
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May 13th, 2008 at 5:14 pm 101
I have mentioned that earlier in this decade when financial markets were “awash in liquidity,” bubble-like conditions emerged in many areas of the economy, including housing. During this period, housing construction was very strong and housing prices soared. In fact, the ratio of house prices to rents—a kind of price-dividend ratio for housing—reached historical highs by early 2006, suggesting that house prices might be well above those that could be justified by fundamentals. Since then, housing markets have “hit the skids."
Janet Yellen, President, Federal Reserve Bank of S.F.
May 13th in Vancouver BC.
http://www.frbsf.org/news/speeches/2008/0513.pdf
And just what were those "historic" price-to-rent highs in the USA? About 27.
What are they today in Vancouer? Well, CUCBC estimated it was just north of 35 in 2005 (they have other measures in their report that may counter the "bubble" theory).
http://www.cucbc.com/publications/economics/pdf/b…
I have seen a lower estimate of price-to-rent at the Langley Financial Planning blog of about 27:
http://langley-financial-planning.blogspot.com/20….
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May 13th, 2008 at 5:21 pm 102
strataman – does the strata even supercede the CRA? I'm wondering in case of units "owned" by speculators who have not been declaring capital gains on previous pre-sale flips… I'm sure CRA is going to have a field day with audits as this thing plays out.
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May 13th, 2008 at 5:21 pm 103
“What’s interesting is, despite the fact that the West is booming, it’s the only place in Canada starting to show housing price softness, because in fact it is the one place in Canada where housing prices went up too fast,” he said.
What? A bank president gets it? Better buy some TD stock.
…grow weed, obviously.
"Dope will get you through times of no money better than money will get you through times of no dope"
- Fabulous Furry Freak Brothers
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May 13th, 2008 at 6:07 pm 104
http://tinyurl.com/3u85bf
Gas, oil prices hit record highs
kiss the 'burbs good bye!
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May 13th, 2008 at 6:34 pm 105
“Dope will get you through times of no money better than money will get you through times of no dope”
See, now I've taken away some useful insight. Thank you for that.
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May 13th, 2008 at 6:35 pm 106
"After bankruptcy maybe Krrrsh will be forced to go back home wherever godforsaken land he came from once and for all"
My guess is he makes no frickin' sense in Punjabi, Cantonese or krrshish either.
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May 13th, 2008 at 7:18 pm 107
read on "strataman – does the strata even supercede the CRA" well say the CRA ended up with the property, to sell it either they or the buyer would have to pay the strata, so yes in effect. The strata cannot legally write-off a debt as it is a form of municipal government so to speak. Just like a property seized by the CRA in the city the strata fee's are the equivalent of a property tax. The buyer from the CRA would have a lien against them immediately on property transfer.
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May 13th, 2008 at 7:19 pm 108
Anyone ever wonder if SATV/Krrish is local realtor Larry Yatkowsky with a little babelfish thrown in? Check out his posts on Garth's blog – http://www.greaterfool.ca/2008/05/08/the-lobby/#c… and his own blog – http://www.yattermatters.com/
Just looks a little familiar, that's all. He does post under his own name on other blogs, but I've never seen him here on VHB…
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May 13th, 2008 at 7:20 pm 109
"How about Option 3? Sit back, relax a bit and watch as prices fall month after month."
How about a fresh perspective from a very unique businessman in Steveston who bakes bread in a home made brick oven he made that burns wood and he sells for 10.00 a loaf and sells out all the time? People really need to go and talk with Nick…even if they don't buy his bread because this Romanian (who I suspect is a gypsy although he denies it up and down) has the right attitude, rich, wants nothing, has no TV, reads no newspapers, you get the picture. This is what we need to do..get away from consuming what we don't need and go back to a simple life.
People stop in to chat with him all the time…a REALLY unique person. You can see his tiny Romanian bakery on Google Earth
49 degrees 7'30.60" N
123 degrees 11'00.39" W elev 7 ft eye altitude 400 ft.
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May 13th, 2008 at 7:20 pm 110
Of course if most of the strata units were seized by the CRA then the CRA would be the strata and would owe themselves the money!
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May 13th, 2008 at 7:27 pm 111
Looks like the CRA is already doing some retroactive re-pricing of condo purchases based on current assesments, and then charging penalties based on the re-assesment: Horror story in today's sun: http://www.canada.com/vancouversun/news/business/…
If they start going after flippers and undeclared rental income while the market is tanking it will be salt-in-the-wounds time.
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May 13th, 2008 at 7:29 pm 112
Sorry Gah, thats a hell of a theory, but I'm pretty sure it's not Larry, I don't see the similarity in posting style.
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May 13th, 2008 at 8:01 pm 113
"She wasn’t expecting it? Really? Is she illiterate or simply stupid?"
She can read & write, and is reasonably intelligent. The considerable success she's had in the past few years have blinded her to other possibilities.
Krisssh or whoever — it's not just her. Everyone in her office, including several other previously successful realtors, are doing lousy business right now.
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May 13th, 2008 at 8:09 pm 114
As for that Sun article on property tax reassessments, I'm inclined to lean with the tax man on both counts:
1) Leonard Schein isn't just your average-Joe. He's a major local investor, and has been involved in developments, as I remember from when I was a kid. It wouldn't surprise me in the slightest if he was one of those inner-circle types who get their choice of the best units in a new development at the best price. Think of the H&H and Sophia developments where industry insiders had gotten some sweet deals on condos… One of those sweet-deals wouldn't be an arms-length transaction, and could be subject to reassessment. Leonard was hoping that his sweetheart condo deal would be an even better deal by claiming back some of the GST…
2) Family probate. Probate was done in mid-2007, presumably using the property assessment they received in Jan 2007, which represents the Aug 2006 market value. They may well have had a realtor make a market assessment on the home in the summer of 2007, but didn't like the number and stuck with the BCAssessment. Everything went tickety-boo, and they thought they made out like bandits. Then this past January they received their new BCAssessment (theoretical value for August 2007), which better-represented the mid-2007 value than the previous year's assessment. Guess what? The tax man is looking out for this. That family has benefited from the rise in property values; they are much better-off than they would have been if property values hadn't risen at all, or than they would have been if last year's assessment was correct. The poor kids…
I'm happy to see that the CRA is watching out for honest taxpayers, by ensuring that frauds and borderline-frauds don't get away with it. All too often we hear of people getting away with tax fraud, be they underreporting rental income or otherwise. People cheating on their taxes increases the tax burden on honest people.
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May 13th, 2008 at 8:34 pm 115
Betamax,
I can understand since the boom has begun numbers of realtors are increased as the sales to slide downward lets say 3300 units are selling now you can divide them between number of realtors.
Her office staff need to find another job as sales countinue to go lower from approximately 35,000 units in 2008 to 33,000 units in 2009.
Prices countinue to keep upward trends that's why i have ask you to clarify your motive if there was no intention behind- second job is a answer.
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May 13th, 2008 at 8:56 pm 116
m:
the tax reassessment gig is hard to believe, who are they to say someone got too good a deal. makes me wonder if they would consider refunds for people who pay too much or for those whose condo's decrease in value from the pre-sale. contrary to what peter wall might say, developers do not leave money on the table.
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May 13th, 2008 at 9:32 pm 117
And this weekends best place on Earth is………
Google Earth Tasmania
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May 14th, 2008 at 2:43 am 118
I don’t know if gains from personal residence flips are included in GDP.
Capital gains, whether they be from personal residences, investment RE, stocks or whatever aren't included in GDP because they're not income. They are capital transactions.
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May 14th, 2008 at 2:44 am 119
Addendum: I mean they're not income in an economic sense. What the taxman considers them is another thing.
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May 14th, 2008 at 6:41 am 120
In response to John's comment on the front page: BC's politicians should have provided incentives to companies that were able to produce a finished good from all these raw materials we're blessed with here. Rather than export raw logs, lets make better than ikea crap, how hard could that be? Of course our products will be more expensive, but hey, there's no shortage of cash in BC apparently.
Second more controversial idea: legalize marijuana. Here is a $7.5 Billion dollar industry,right now, in BC. This is just through smoking it. Think of tourism for a second and the local economy if this homegrown BC product were opened up and taxed. Also, the other products that would undoubtedly become more popular through hemp. I once watched a program on TV where they were showing hemp fibers used to create a type of plywood and regular lumber that was superior to wood. The beauty of it, most sawmills wouldn't need to change too much in order to start using it. Same said for pulp form hemp fibers vs. wood chips. They could do it now, but there's no where near enough being grown. Talk about sustainability.
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May 14th, 2008 at 7:20 am 121
Link on american economy home prices etc:
http://www.nytimes.com/2008/05/14/business/14leon…
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May 15th, 2008 at 1:10 pm 122
http://tinyurl.com/5rtbkc
Collateral Foreclosure Damage for Condo Owners – NYT
Everybody should read this article regarding the damage that depreciating condo values does to the strata's financial health. Really eye opening…
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