Welcome!
VancouverPeak.com- jesse and wreckonomics are now friends
- wreckonomics posted an update: New Year, New HPI. ”Selection Broadens and Demand Eases to […]
- Best place on meth and admin are now friends
- jesse and Best place on meth are now friends
- jesse replied to the forum topic February 2012 Daily Numbers in the group Housing Data
- jesse replied to the forum topic February 2012 Daily Numbers in the group Housing Data
- jesse replied to the forum topic February 2012 Daily Numbers in the group Housing Data
- jesse started the forum topic February 2012 Daily Numbers in the group Housing Data
- jesse and admin are now friends
- jesse and Absinthe are now friends
Wordpress theme by Abhishek Tripathi of Mediawick Digital Solutions
May 12th, 2008 at 6:53 pm
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.
May 12th, 2008 at 6:03 pm
“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!
May 12th, 2008 at 4:54 pm
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.
May 12th, 2008 at 4:51 pm
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!
May 12th, 2008 at 4:45 pm
It’s a sucker’s rally.
do i detect some bearish sentiment here?
May 12th, 2008 at 4:13 pm
“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.
May 12th, 2008 at 3:45 pm
Thanks alexcanuck, commodities are no doubt likely to pop soon…and we will need new ideas for generating return form somewhere!
May 12th, 2008 at 3:38 pm
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.
May 12th, 2008 at 3:32 pm
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?
May 12th, 2008 at 3:27 pm
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?
May 12th, 2008 at 3:13 pm
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.
May 12th, 2008 at 2:51 pm
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….
May 12th, 2008 at 2:51 pm
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?
May 12th, 2008 at 2:49 pm
…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.
May 12th, 2008 at 2:45 pm
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.
May 12th, 2008 at 2:44 pm
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.
May 12th, 2008 at 2:43 pm
dingus, just for you: http://www.ass-clown.net/
May 12th, 2008 at 2:42 pm
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?
May 12th, 2008 at 2:38 pm
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.
May 12th, 2008 at 2:10 pm
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.....ments.html
Particularly, “Argument from Adverse Consequences”, “Needling”, and “Straw Man”.
May 12th, 2008 at 2:01 pm
“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.
May 12th, 2008 at 1:52 pm
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?
May 12th, 2008 at 1:38 pm
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.
May 12th, 2008 at 1:26 pm
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?
May 12th, 2008 at 1:12 pm
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.
May 12th, 2008 at 1:08 pm
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.
May 12th, 2008 at 1:05 pm
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?
May 12th, 2008 at 12:23 pm
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?
May 12th, 2008 at 11:51 am
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.
May 12th, 2008 at 11:42 am
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.
May 12th, 2008 at 11:40 am
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.
May 12th, 2008 at 11:39 am
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.
May 12th, 2008 at 11:32 am
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….
May 12th, 2008 at 11:22 am
“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.
May 12th, 2008 at 11:14 am
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.
May 12th, 2008 at 11:00 am
yes rob a, waited and waited whiule we were students.. silly us, we should have been taking on huge mortgages when we were studying….
May 12th, 2008 at 10:57 am
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.
May 12th, 2008 at 10:14 am
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….
May 12th, 2008 at 9:54 am
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.
May 12th, 2008 at 9:37 am
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.
May 12th, 2008 at 9:36 am
.
.
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.
May 12th, 2008 at 9:27 am
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.
May 12th, 2008 at 9:17 am
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.
May 12th, 2008 at 8:53 am
Via, I love that platitude as well. I guess we are all “maximisers” therefore we “maximise” purchasing real estate.
May 12th, 2008 at 8:48 am
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.
May 12th, 2008 at 8:13 am
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?
May 12th, 2008 at 8:12 am
“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.
May 12th, 2008 at 8:08 am
It would be nice if he actually published something once in a while, too.
May 12th, 2008 at 7:57 am
and an amatuer that is geting paid 200k plus a year from YOUR provincial taxes….
May 12th, 2008 at 7:34 am
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.