Friday Free-for-all!

It’s friday and that means it’s time for our weekly news roundup and open topic discussion for the weekend.  As I post this rain is falling against my window and it feels like its been gray and under 10 degrees for a week.  I am assured summer is still scheduled to begin in a couple of weeks.  In any case its the perfect weather to be stuck indoors in front of a computer - here’s a few stories I’ve noticed this week:

-BC: highest proportion of income on housing
-For Sale: $1,600,000 or best offer
-Lower mainland cities like to spend
-Real estate market returning to ‘normal levels
-Boomers own and owe more than ever before
-Sales sign super-stack challenge
-Mohican: shots from the bubblehood
-Cheap Calgarians
-Housing bust a boon for some renters
-US Records: foreclosures and low equity

So what are you seeing out there on this fine spring weekend?  Post your news, links and anecdotes here and have an excellent weekend!

note: any conversation on real estate or economics is allowed, please keep it civilized. when posting articles please only quote pertinent points and link to the original instead of pasting the entire article here. Thanks!

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123 Responses to “Friday Free-for-all!”

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  1. 1

    -A- Says:Reply to this comment

    Happy Friday to all, and may I greet you with a message which illustrates how desperate the pimps are getting.

    http://www.newswire.ca/en/rele.....c7489.html

    I got this link from: http://www.greaterfool.ca/

    It’s such a fine spin I thought worth sharing.

    Current score: -17

  2. 2

    freako Says:Reply to this comment

    Re: The U.S. drop in equity, it is at least one thing that I and other bears got right. From a 2005 RETalks thread:

    http://tinyurl.com/3ttn88

    Lets assume that homes gave back half their price gains (25% drop, ignore effect of compounding). That means that average home equity would roughly half to a little over 30%. The amount household wealth “destroyed” in such a case is mind boggling. It would have a huge impact on our economic well being. The tech collapse didn’t actually hit too hard because actual exposure was quite small. Not in this case. What is wrong with conclusion that we are failing to see the danger? Unless he is factually incorrect that is. What you call alarmist, I call alarming.

    Many of the usual suspects had held their usual opinions in that thread. The chickens are coming home to roost.

    Current score: -73

  3. 3

    freako Says:Reply to this comment

    The last paragraph above should not have been quoted.

    Current score: -20

  4. 4

    blueskies Says:Reply to this comment

    Oil @$150 by July 4?

    http://tinyurl.com/523h63

    hmm backyard BBQ and a walk in the park…
    just got me some new sandals.. timing is everything!

    Current score: 0

  5. 5

    Tony Danza Says:Reply to this comment

    Nice Boomer/GenX intergenerational bashing going on in the comment section in the boomers in debt piece! Too bad comments are closed.

    My favourite comments are when a boomer claims she’ll just work until she’s 80 to pay off her extra mortgage. Right. I’ve seen many a sexagenarian attempt this feat, they are the most miserable people that you can imagine working with/for.

    I’m surprised that none of the GenXers raised a battle cry to privatize health care just when Boomers are going to need it most to avoid having to pay the massive tax increases that will come along with the need.

    Current score: 0

  6. 6

    formerprairiedog Says:Reply to this comment

    Potential sign of the times observation: Is it just me, or does English Bay seem like it has had fewer container ships waiting to offload?

    Current score: 0

  7. 7

    richard Says:Reply to this comment

    on the cnn website there is a story about evander holyfield. apparently his estate is about to be foreclosed.

    Current score: 0

  8. 8

    Anonymous Says:Reply to this comment

    “Now is not the time to wait until the sale is
    over and then decide to buy; after you read a headline, the best time to buy has passed,” cautioned, CREB(R) President, Ed Jensen.

    Well gee Ed, thanks for the advice. That is disappointing news, I guess I missed out on my opportunity to get a good deal in the US since I saw those headlines of increasing inventory and decreasing sales TWO YEARS AGO.

    Current score: 0

  9. 9

    ProblemBear Says:Reply to this comment

    Paul B. has not put up his June 5 stats yet, I wonder what gives?

    Current score: 0

  10. 10

    My Computer Says:Reply to this comment

    Richard -The list of celebrity foreclosures keeps growing. Hollyfield joins Jose Canseco and Ed McMahon for big foreclosures in the last couple of months. But Michael Jackson still has neverland!

    Current score: 0

  11. 11

    My Computer Says:Reply to this comment

    ProblemBear - Paul B. is on vacation in France, he said he’ll try to keep daily stats updated, but there will be a delay (for obvious reasons).

    Current score: 0

  12. 12

    Bubble Lad Says:Reply to this comment

    re: Renters.

    Screw lower rents and one lousy free month. I want to get PAID to live in one of those crappy places - living there and making sure scavengers don’t steal your copper pipes and aluminum siding and high school kids don’t party and trash the place. Tack that on to your monthly budget expenses.

    Current score: 0

  13. 13

    Raincouver Says:Reply to this comment

    Paul has some rough numbers on his blog site.

    Inventory up:)

    Current score: 0

  14. 14

    dosh Says:Reply to this comment

    Everyone wants to make a big deal about inventory, but it only looks big compared to the last few years of low inventory. Don’t count on prices coming down just because we’re returning to a more normal market.

    Current score: 0

  15. 15

    blueskies Says:Reply to this comment

    Don’t count on prices coming down just because we’re returning to a more normal market.

    prices have to come down to be affordable.
    $250 per sq. ft. is affordable downtown

    does this work for you, dosh?

    Current score: 0

  16. 16

    Raincouver Says:Reply to this comment

    That’s true, Dosh. Sales/Listings ratios are fairly inconsequential too.

    Soft Landings for Everyone!

    Current score: 0

  17. 17

    dosh Says:Reply to this comment

    $250 per sq. ft. downtown will never happen. Prices may soften slightly, but you’ll never see a drop like that.

    Current score: 0

  18. 18

    blueskies Says:Reply to this comment

    $250 per sq. ft. downtown will never happen.

    we paid $243 sq. ft in 2001 pre sale

    at $650+ sq. ft. it is not affordable, very few buyers at that level so for sales to continue there has to be a significant drop in prices….

    and 2001 pricing is very possible even desirable
    just for the affordability aspects….

    Current score: 0

  19. 19

    Tony Danza Says:Reply to this comment

    $250 per sq. ft. downtown will never happen. Prices may soften slightly, but you’ll never see a drop like that.

    Prove it. Or are you just lying to make yourself feel better?

    Current score: 0

  20. 20

    /dev/null Says:Reply to this comment

    Seriously, Dosh - “never”. You have to brave (or stupid) you use that word about anything. Perhaps you’re just a closed-minded fellow.

    Current score: 0

  21. 21

    Drachen Says:Reply to this comment

    Dosh

    “$250 per sq. ft. downtown will never happen. Prices may soften slightly, but you’ll never see a drop like that.”

    Same old Dosh. You’ve been around this blog long enough to know our reasons why the prices will fall by that much yet you never once have given any substantiated cogent reason why they would not fall by that much.

    Flapping your gums (or fingers) at the problem will not make it go away.

    /dev/null

    He’s a bias-minded fellow. He’s a real estate agent therefore it is not in any way in his best financial interest for the RE market to collapse. He’s kind of like Wyle E Coyote, hoping to suspend his disbelief and keep the market in the air in spite of the laws of physics. I don’t think he’s stupid so much as wilfully ignorant.

    Current score: 0

  22. 22

    Bubble Lad Says:Reply to this comment

    Condos to be sold “regardless of cost” - I thought “they only do that in the States…”

    http://www.news1130.com/news/l.....12133_3712

    Current score: 0

  23. 23

    sheeplessinvancouver Says:Reply to this comment

    Re: Boomers own more homes – and owe more – than ever before

    I’m a boomer who didn’t buy my first home until my late forties. I will have the mortgage paid off before I retire or maybe earlier. My second mortgage, if and when I get one, will be for an income producing revenue property. I can guarantee that it won’t be in BC.

    I’m not in the majority, but there are still a lot of us out there who, because we spent years travelling or attending university or just couldn’t afford to buy, didn’t participate in the housing market in the ’80s. We’re mostly women and not fans of the suburban lifestyle so condos are the preferred housing option. We’re not exactly struggling to make mortgage payments because this factor was accounted for when we went shopping for a home.

    Here’s my theory. Because of low interest rates and prices in the late ’90s and the early 2000s, you had the children of the early boomers plus boomers who had never been homeowners entering the market at the same time.

    This, along with an increasing number of households (smaller households = more households) due to divorce and other lifestyle changes, contributed to the increase in sales and the run up in prices.

    Many of the boomer children out there looking for someone to blame for high prices should look across the Sunday dinner table. It just might be their mom.

    Current score: 0

  24. 24

    Patiently Waiting Says:Reply to this comment

    My anger towards the boomers isn’t what it once was. Many of them are going to have a miserable old-age so I’m going to let it go.

    My GenX generation hasn’t had it that bad. Sure our careers aren’t what they could be without the boomers and many of us are not happy with our housing situation. However, we are drowning in little luxuries. We have stuff that most of the world can only dream of.

    Most importantly, almost none of us have been asked to make huge sacrifices for our country by going to war. We’ll have a high tax burden in coming years, but we’ll also see improved career opportunities and shockingly cheap real estate. Its up to us how we play it.

    A good part of my generation and GenY has decided our fate already. With the internet at our finger-tips, very few of us chose to research the reasons behind high real estate prices. Instead, I’ve known many young adults who’ve obsessively combed the MLS drooling over granite and stainless steel crap.

    If we want to blame someone we better look in a mirror.

    Current score: 0

  25. 25

    jesse Says:Reply to this comment

    “Because of low interest rates and prices in the late ’90s and the early 2000s, you had the children of the early boomers plus boomers who had never been homeowners entering the market at the same time.”

    Maybe but all this means is the echo boomers have “bought” into the ownership story. They can rent for far less than what it costs to own. If they buy now they are speculating or fooling themselves that owning has intangibles that justifies it being more expensive than renting.

    Current score: 0

  26. 26

    Canuck99 Says:Reply to this comment

  27. 27

    pricedoutfornow Says:Reply to this comment

    Jeez…anyone else feeling a bit glum about the price of gas?How depressing!

    Current score: 0

  28. 28

    RJ Says:Reply to this comment

    The think I don’t understand about the boomers is that they’ve lived through a bad housing bust, they’ve seen economic downturn and yet some of them seem to believe it can’t happen again.

    Current score: 0

  29. 29

    Anonymous Says:Reply to this comment

    I don’t mind seeing the price of gas go up, its still cheaper than bottled water. I think we need to start looking at alternatives and effieciency improvement in how we use energy.

    Current score: 0

  30. 30

    -A- Says:Reply to this comment

    Primed for Trouble: Pace of Mortgage Distress Shifts to Prime Borrowers

    http://www.housingwire.com/200.....borrowers/

    “Taking California, Florida, Arizona and Nevada together, the four states represented 62 percent of all foreclosures started on prime ARM loans, and 84 percent of the increase in prime ARM foreclosure, Brinkmann noted. ”

    Current score: 0

  31. 31

    Vansanity Says:Reply to this comment

    I loved Mohican’s photos! Hilarious! “Nothing to see here, normal levels of inventory are back, normal conditions are back too?… HAHAHA!! Oh man, this is killin me!

    Current score: 0

  32. 32

    franko Says:Reply to this comment

    It sounds like markets are starting to tank big time in the Okanagan and Vancouver Island, but we hear very little about the unfolding disaster in sawmill towns like Prince George, Quesnel, Williams Lake, and Port Alberni.

    Today’s report by the US Labor Dept of the largest monthly unemployment jump in 22 years will further reduce any demand for our lumber along with hopes for a soft landing of our economy.

    The RE inventory spike may even become evident on planet dosh.

    Current score: 0

  33. 33

    Bizznitch Says:Reply to this comment

    The news media is friends with Campbell and Co. They won’t publish anything bad about the current dictatorship…err…govt.

    Current score: 0

  34. 34

    Bubblishious Says:Reply to this comment

    Found this interesting Rent vs: Own comparison on the NYT website.

    http://www.nytimes.com/2008/05.....gewanted=1

    Also this real time utility for testing Renting vs: Owning figures.

    http://www.nytimes.com/2007/04.....HIC.html?#

    The interest deductible mortgage that our US friends enjoy seems to have a favourable impact on the owning side.

    A Canadian calculator like this sure would be interesting.

    Current score: 0

  35. 35

    jun Says:Reply to this comment

    hahaha bunch of people think the price is going to drop. However, the thing is you guys can’t afford to buy. In a democracy, the power isn’t in your hands. Look at the reality.

    Current score: 0

  36. 36

    van-zee Says:Reply to this comment

    Interesting little bit in the Sun about author Richard Florida commenting on Vancouver affordability and the creative class.

    http://tinyurl.com/599jqw

    Current score: 0

  37. 37

    krissh Says:Reply to this comment

    the reality jun is you are janitor and will nver buy i am grat buy three you buy les and prices go up relax your brain muscles price go up for decade to com

    Current score: -1

  38. 38

    patriotz Says:Reply to this comment

    However, the thing is you guys can’t afford to buy.

    Well prices are going to have to drop then, which is what we have been saying all along.

    Current score: 0

  39. 39

    Raincouver Says:Reply to this comment

    17,857.

    Another “meaningless” rise in inventory reported over at Paul’s blog.

    Fortunately, there’s a whopping 27% S/L to soak it up.

    Current score: 0

  40. 40

    crabman Says:Reply to this comment

    San Diego
    Population: 3.15 million
    Listings: 21,232
    Ratio: 148

    Vancouver
    Population: 2.25 million
    Listings: 17,857
    Ratio: 126

    We now have a 15% lower pop/listings ratio than San Diego. (Lower ratios are more of a buyers market.)

    Current score: 0

  41. 41

    Burden of Proof Says:Reply to this comment

    Vancouer is the 15th best place on earth (out of 20 on the list).

    http://www.monocle.com/Magazin...../issue-05/

    Current score: 0

  42. 42

    Brittanny Spears Says:Reply to this comment

    krissh - I will buy your forclosures from the bank in 36 months.

    Current score: -22

  43. 43

    Anonymous Says:Reply to this comment

    “hahaha bunch of people think the price is going to drop. However, the thing is you guys can’t afford to buy. In a democracy, the power isn’t in your hands. Look at the reality.”-excellent post.

    jun that krrish above is not a genuine krrish bears are getting out of whack as prices are countinue going towards space.

    Current score: 0

  44. 44

    M- Says:Reply to this comment

    Crabman: don’t forget to include the FVREB’s listings (10,407 per Paul’s blog). Do you know if San Diego’s listings figure is for the entire area, or is there a listings figure for the suburban areas also?

    Current score: -31

  45. 45

    Anonymous Says:Reply to this comment

    THERE ARE NOT MUCH LISTINGS IN VANCOUVER

    The board does not update solds too often,Sell list ratio is down because of low list=low sales that’s why prices are going UP.

    PAUL’B did not go to france,He got another job learning how to drive pallet jack,He is a rockie warehouse worker starting $9.35 per hour- because of less listings and less sales there was no income as real estate rating agent.

    Current score: 32

  46. 46

    Drachen Says:Reply to this comment

    Jun

    “bunch of people think the price is going to drop. However, the thing is you guys can’t afford to buy.”

    I suppose it never occurred to you that IF you are correct that we can’t afford to buy (a group of mostly very intelligent and educated people who likely earn well above the Vancouver average) then there is no alternative but for the market to correct. If nobody’s left to buy what keeps the prices up?

    Current score: 0

  47. 47

    Drachen Says:Reply to this comment

    Anon

    “THERE ARE NOT MUCH LISTINGS IN VANCOUVER

    The board does not update solds too often,Sell list ratio is down because of low list=low sales that’s why prices are going UP.”

    Umm even if you were correct your reasoning does not explain the inventory spike.

    Prices are going up because they’ve been going up for so long and it becomes a habit with consumers/sellers to assume they’ll go up. Happens in every bubble. Think of it like a toy rocket, even after the motor runs out of fuel the rocket will continue to climb for a little while before crashing down to earth. That is where we are right now. Price declines will begin in the summer/fall

    Current score: -29

  48. 48

    umdesch4 Says:Reply to this comment

    Price declines are already starting in some areas. One SFH we saw two weeks ago (in Port Moody) dropped the listing price from $719K to $688K overnight. Just in the time we were looking, a couple of other places in Coquitlam fell off the MLS listings, only to re-appear cheaper. Otherwise, all of the couple dozen or so listings we started looking at between a month and 6 weeks ago are still up.

    Oh, and did I mention the open houses? Two weekends ago, we had the surreal experience of going to 4, and being the only ones there.

    I’ll admit that this is only anecdotal, based on a small sample (of SFHs only), and in the outlying areas of the GVA…but I can’t help thinking it might be a sign of things to come.

    Current score: 0

  49. 49

    miracle Says:Reply to this comment

    JUN:
    “In a democracy, the power isn’t in your hands. Look at the reality.”

    What are you talking about? You are conflating democracy with capitalism. Unfortunately typical.

    Not that I want to confuse you further, but democracy does not equal possessing commodities. Are you saying that the rule of the moneyed elites is a good thing? When only moneyed interests get a say in how society is run, you’re skirting with fascism brother.
    That might be an aspect of our social reality, but I was hoping for a bit more from my neighbors. Potluck anyone?

    Current score: -21

  50. 50

    browntown Says:Reply to this comment

    yeah dracken i think it will be awhile before the n.d.p come back so you can get your hospital cleaning job back! yeah, you are super intellegent rocket boy! good for laugh dick slap! your wife say rocket coming down! ha ha ha

    Current score: -1

  51. 51

    blueskies Says:Reply to this comment

    if anybody runs across some “pent up demand” this weekend please take a picture of it, i’d love to see this rare bird.

    Current score: 0

  52. 52

    Anonymous Says:Reply to this comment

    “your reasoning does not explain the inventory spike.”

    Chart shows inventory spike to encourage more sellers in fear=more bussiness to stop agent going out of jobs.

    Current score: 0

  53. 53

    patriotz Says:Reply to this comment

    Vancouver
    Population: 2.25 million
    Listings: 17,857
    Ratio: 126

    But that’s the listings for REBGV which does not include N. Delta, Surrey, White Rock or Langley (c/t) (FVREB). Take them out and your population drops to 1.63 million, and the correct ratio is 91. Looks even worse compared to SD’s 148 doesn’t it?

    Current score: -42

  54. 54

    jesse Says:Reply to this comment

    Vancouver pop-listings ratio is way worse than San Diego. Sales in July and August are usually not good and June is not starting off well at all. Look for MOI to be absolutely atrocious in the Summer. I’d be surprised if we don’t see the benchmark starting to fall by September.

    Current score: 0

  55. 55

    franko Says:Reply to this comment

    Here’s how I see it:

    The slight inventory slowdown at the end of May was actually much less than normal for the Victoria Day long weekend, which is usually the biggest selling time of the year.

    Our market has come close to the cliff a couple of times in the last 2 years, only to be revived by greedy idiots and driven to ever greater levels of insanity. But fundamentals have so overwhelmingly deteriorated that the few remaining illiterate bulls at the bottom of the evolution chain will be entirely helpless to stave off the looming disaster.

    All the ducks are finally in a row, and we’re a tiny sliver away from panic that will drive inventory to levels that will knock your socks off.

    Current score: -39

  56. 56

    Brittanny Spears Says:Reply to this comment

    I can’t believe that anyone is buying now. It just amazes me how uninformed so many people are. I especially feel sorry for the uninformed youth who are getting sucked in by the spin sharks and will have to live with the results actions for a long,long time.

    Current score: 0

  57. 57

    Anonymous Says:Reply to this comment

    Franko says… “It sounds like markets are starting to tank big time in the Okanagan.”

    I have a place there and on my street there are 5 houses for sale from $399,000 - 549,000 and 3 lots going from $149,900 - 229,900. 8 signs at the bottom of my street has never been seen before!!

    Current score: 0

  58. 58

    Vansanity Says:Reply to this comment

    Oh man,the bulls are seriously killin me lately!! I’m making an effort to check in on this site at least once a day, solely for a good laugh!! Thank you bulls!! Hahaha!! Please continue to “wow” me with your “expertise” in the subject matter!! Hahaha!!

    Current score: 0

  59. 59

    Raincouver Says:Reply to this comment

    Our market has come close to the cliff a couple of times in the last 2 years, only to be revived by greedy idiots and driven to ever greater levels of insanity.

    Actually, that would have never happened except for what has been referred to as “bankers mischief”. If not for 40 year amorts, zero down, CMHC extension to ‘investment’ properties, this thing would have died the ignomious death it so deserves - at least a year ago. Our financial gurus are enablers.

    But, you’re right, ultimately. Greedy idiots…greater levels of insanity.

    Current score: 0

  60. 60

    Asun Says:Reply to this comment

    Wow, I just checked out buildingdigger.com based on Condohype’s article. Thousands of assignments are listed there. Hmm.. if we add that to Paul B’s number, yeah.. the end is near. Or perhaps we’re already at the beginning of the end :D
    Current score: 0

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